Statement of Work (SOW) Document in Software Development: All You Need to Know

Krunal Shah

Apr 27, 2022

8 min readLast Updated Apr 27, 2022

For any project or service contract, an SOW document plays a vital role. An SOW document mainly lets you know the terms, conditions, and objectives of a project/service contract to avoid any future complications or disputes. While the global documents management systems market is set to reach $6.78 billion by 2023, the rising usage of SOW definitely accounts for it significantly.

Be it location-based mobile app development or any location-based service, an SOW document is more like a mandatory to avoid any conflict in the project. But many app developers, IT professionals, or even people from technical domains don’t have a clear idea about an SOW document or how it is relevant to location software. So, in this blog, we will guide you through the role of SOW documents in software development and all the relevant information you need to know.

What Is an SOW Document?

A statement of work or SOW document is defined as a legal and systematic document that defines and records all the important pointers, clauses, work scope, rules, and other relevant information of a project or service contract. An SOW document not only helps in defining and collating the project information and project planning but also aids in streamlining the project workflow.

No matter what type of project or service is on contract, an SOW document is pivotal to avoiding future conflicts and optimizing the overall project work. No wonder software developers, contractors, and business players from this sector have adopted the practice of writing SOW documents for a while now. Before we guide you through the steps to write an SOW, let’s give you an overview of the importance of SOW documents in software development projects.

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The Importance of SOW Document in Software Development

There are innumerable reasons why the SOW document has become an integral part of the location-based mobile app development, location-based service on software, and other software development projects. Here we have listed the top benefits of writing an SOW document for software development.

Structured Software Development Process

An SOW document helps in defining the software development project scope, timeline, and other relevant details. As everything is outlined and specified on the SOW document related to the software development, it results in a well-structured software development process.

Streamlined Workflow

As discussed above, an SOW document records all the project objectives, standards to be maintained, development work schedule, related technologies, hardware, and software details or constraints if any, related operational activities, and others. This helps in streamlining the overall operational activities.

Higher Productivity

An SOW document is not only meant for business purposes but also helps the software developers as well as the other party in taking the work ahead without many conflicts. As the crucial details related to the software development project are documented both from the business and development perspectives, it optimizes the overall productivity of the software development.

See More: How to Contract Software Development: Key Things to Include

How to Write an SOW Document for Software Projects

Now comes the main part - how to write an SOW on location software development, location-based mobile app development, or location-based service project. Here’s our stepwise guide on how to write an SOW document for software development properly.

Introduction

The introduction part is the first section of an SOW document that briefs about what the project is about. For software development, it specifies the type of software development project and includes information about both parties. One should also mention the time and place the contract takes place in this section of the SOW document.

Goals & Purpose

It is very important to mention the purpose and goal of the software development project as it will help the development team follow the right track. For instance, if your project is a location-based mobile app development, then you must mention the main purpose or the problem statement the app is going to solve, what is the overall project or business goal associated with the app development, and other related factors. This will help the developers understand the client's requirements clearly and proceed in the right direction.

Project Scope and Description

This is the most descriptive part of an SOW document. Be it a location-based service project, or on-location software development, it is vital to describe the project scope in detail. This part should include the features, solutions, and functional activities the client expects from the software or product.

It is a good practice to divide the project into multiple steps that are meant to accomplish various tasks such as project discovery, project outline, project development, and testing. Segmenting the project in this way will help the developers accomplish all the tasks more efficiently. Some of the must-have pointers to include in this section of an SOW document are -

  • Required set of tasks to accomplish
  • Set of features/solutions expected from the software
  • Segments or phases of each of the tasks
  • The roles and responsibilities of both the parties related to the project scope, work, deliverables, supply of the required resources, security, and other factors
  • The appointed developers, testers, project managers, and others for various roles
  • Set of requirements or criteria for the developers, testers, and others
  • Overall project specifications, limitations/constraints, special cases, and any other relevant information on project scope & description

Location of Operational Activities

Mentioning the location of operational activities for your software development project is imperative while making an SOW document. Nowadays, most clients take the liberty to hire software developers from a global pool of human resources.

Be it individual freelancers or software development companies, you should make a choice wisely based on your budget, requirement as well as location-based analysis on development cost. However, you must mention the location of operational activities, the location of timely meetings, and any other information like the origin of on-location software developers in the SOW document. Also, don’t forget to mention the respective time zones for the various project-related activities.

Rules & Standards to Comply With

Rules & standards are highly significant for any software development project as they ensure systemic development and testing process. Also, the set of rules, regulations, and guidelines may vary widely based on the client requirements, software type, tech stack or development method, the purpose of the product, and other factors. Here’s a list of the pointers you must include in this part of an SOW document -

  • Tech stack/coding/tools/software to be used and limitations regarding the same
  • Detailed information during both the development and testing phases
  • Specific CI/CD process and pipeline diagram
  • Industry standards to maintain during each phase of the software development
  • The specific list of accepted devices, channels, means for communication, and related processes
  • Guidelines for any change in plan/workflow/order - both major and minor
  • Rules related to crossing the deadline, delivering before the deadline, or bonus for extra working hours and efforts

Deadline

We can’t emphasize enough the role of maintaining deadlines for any software development project. The minimum time frame to complete the development process, the deadline to create the first MVP (Minimum Viable Product), and the maximum extension limit from the deadline - are some of the vital information to include in this section of an SOW document.

The contract start date and end date, as well as the exact starting and ending date for the development, testing, and launching process are crucial to specify in the document. Also, including information regarding the schedule to maintain will help the developers optimize the time and deliver by the deadliner better.

Mode of Monitoring & Controlling

It is obvious that during the whole development process the client will need to monitor the progress. And so, you must mention the relevant information like the mode of monitoring, and the extent of control the client, as well as the developer party, can have during the process.

It is advisable to utilize the management software to get timely reports & insights on the milestones achieved, ongoing processes, obstacles if any, and others. One can use software like Asana, Jira, and Basecamp for supervising operational reviews, and management of the related workflows more efficiently.

Acceptance Criteria

This is an unskippable part while making an SOW document for your software development project. Unless you strictly mention the set of criteria, features, or solutions expected from the end product, it will not be possible to understand whether the project work is over or not.

Note that, just because the development and testing phase is over doesn’t imply that your project work is finished. There can be issues like the lack of features, inefficient operability, security loopholes, and others in your final product. And so it is important to specify the exact set of acceptance criteria the developers should adhere to. This will not only help in meeting the development goals but will save the time and effort of both parties.

Contract & Payment Model

No doubt that contract model and payment mode & model are interrelated and you need to be specific about both from day one. In this part of an SOW document, one should mention what type of contract is taking place between the parties and what is the payment model. There are mainly two types of contract models for software development team outsourcing.




Dedicated Development Team Model

As the name suggests, in this contract model, the client hires a fully dedicated team of developers and testers to work on the project. This type of contract ensures the required deliverables from the developer team by working on the complex projects and incorporating any changes as required. Such contract type is more suitable for long-term and complex projects. Here the payment model can be monthly or quarterly or hourly based on the project length.

Fixed Priced Contract

The fixed-priced contract type is quite popular and it fits the requirements of clients better for small to moderate software projects. Here, the client specifies everything including the time, budget, and payment as agreed upon by the developer party. While this works well for the clients with a fixed or limited budget or time, it often lacks flexibility as everything is fixed here beforehand.

Based on your project size, developer requirements, features/solutions needed, and others you can choose the contract model and specify it in this section of the SOW. Also, mention the related payment model, mode, frequency, add-ons, and bonus if any.

Other Details

This section can be a combination of various miscellaneous information that doesn’t fall under a single category. Security measures while communicating, traveling allowance, protocols for paying for any additional resources, cap of liability, code and relevant resources rights & ownership, post-project completion support and other expected services, and others - this section can include anything and everything you find important. Once you are done with completing this part of the SOW document, all you need to do is revise and add anything missed in the other respective sections if any.



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Wrapping Up

An SOW document is more than a mandate for software development projects. As such projects involve a lot of technicalities, operability, communications, transfer of resources, security & budget concerns, starting without a proper contract and agreement is never a good idea. No matter whether your project is small or big, the above steps will help you prepare a proper SOW document for your software development contract.

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