Overview

The contract Scope of Work, or SOW, is vital in the New Economy because it clearly outlines the work to be performed under a contract or subcontract, detailing project goals, guidelines, deliverables, schedule, costs, and more. Failure to have a well-drafted scope of work can lead to contract value loss nearing 10% of the overall contract value.  

A well-defined scope of work helps avoid misunderstandings.  It sets clear expectations and responsibilities for both parties. Moreover, it can prevent disputes or legal issues by ensuring that all parties are on the same page regarding the project details.  

The SOW allocates responsibilities, sets expectations, defines timelines, and includes additional project details like management processes. By providing a detailed scope of work, all parties involved have a foundational document that eliminates ambiguity and minimizes potential project delays or miscommunications.

On the other hand, not having a clear scope of work can lead to various consequences, including confusion, frustration, legal action, project delays, disputes, and what sometimes amounts to the biggest problem - scope creep.

Scope creep is the uncontrolled expansion of project scope without adjustments to cost and resources and can occur when there is a lack of a clear vision of the project scope. Poor communication, changing requirements, and poorly defined project scope are common causes of scope creep.  The consequences of scope creep include missed delivery dates, exceeding the budget, poor quality outcomes, team inefficiency, and project failure.  

To prevent scope creep it is essential to develop a detailed plan, share the project scope effectively, define clear project objectives, and manage changes properly. Effective communication, understanding requirements, defining project scope early on, and managing changes are key strategies to prevent the negative impacts of not having a clear scope of work.

Why you should Attend

Procurement professionals must create Scopes of Work which create Value for Money while simultaneously mitigating risk.  In this pursuit, it is essential for stakeholders to explicitly and specifically state “What” is going to be performed or delivered - and for the Procurement practitioner to draft the SOW accordingly. But the Procurement professional must look beyond current requirements and anticipate the future.  During this session, we will address:

• Structuring Scope of Work statements to indicate what’s in scope - and what’s out of scope - both now and into the future
• Considering strategic factors, and whether the opportunity is Results, Resource, or Relational
• Engaging stakeholders to ensure the SOW aligns with the overall strategy
• Integrating ongoing roles, responsibilities, and governance to maintain alignment with the inevitable change in scope
• Harnessing automation and technology for superior contract management and supplier relationship management results
  

Why is this insight important in the New Economy?

To draft scopes of work effectively in the New Economy, it is essential to follow key steps and considerations.

• We need to understand the Significance: We must recognize the importance of having a clear scope of work in facilitating agreement among stakeholders, preventing scope creep, managing expectations, allocating resources effectively, reducing risks, and acting as a communication tool
• We need to include Key Elements: We must include project deliverables, milestones, timelines, reports, resources, roles and responsibilities, change management, and a communication plan in the scope of work
• We need to follow an effective writing Process: We must define project goals, list deliverables, determine tasks and timelines, outline quality standards, identify project goals, specify roles, establish acceptance criteria, and plan reporting when drafting a scope of work
• We need to address challenges: We must be prepared to tackle challenges like scope creep, unclear change control processes, inadequate stakeholder communication, lack of scope documentation, gold plating (adding features without client knowledge), rapidly changing requirements, and technical uncertainties
• We need to use guidelines for forming a Scope of Work: We must follow general guidelines such as providing a preliminary statement summarizing objectives, historical procurement summary, detailed tasks to be performed with deliverables schedule and location information, equipment and supplies breakdown, qualification requirements of contractors, performance standards, payment requirements, other considerations, or requirements definition
• We need to follow the Scope Process: We must write clearly without clichés or acronyms; explain terms and conditions clearly; provide consistent methodology for determining requirements; avoid assumptions unless clearly stated; define product and process requirements; involve stakeholders at various stages; document what is considered out-of-scope; establish strict management processes to prevent scope changes without appropriate functions taking place.

For many, Scopes of Work include Service Level Agreements, or SLA - which will be addressed as well.  

A Service Level Agreement (SLA) is a contract between a service provider and a customer that outlines the level of service to be provided, including metrics like uptime, delivery time, response time, and resolution time. SLAs are crucial in establishing expectations, defining responsibilities, and setting standards for service performance. They can be customer-based, covering all services used by a customer, or service-level agreements that detail identical services offered to multiple customers.

Key elements of an SLA include an agreement overview, description of services, exclusions, service level objectives (SLO), security standards, disaster recovery processes, service tracking and reporting agreements, penalties for non-compliance, termination processes, review and change processes, and signatures. Common metrics covered by SLAs include service availability, error rates, security measures, quality of output, and cost of meeting SLA goals.

It is essential to define clear performance metrics and establish processes for monitoring and reviewing the SLA regularly to ensure its effectiveness. Different types of SLAs include customer-based SLAs, internal SLAs between teams within an organization, and multi-level SLAs that integrate several conditions into the same system.

Overall, SLAs play a vital role in managing customer expectations, defining service levels, and ensuring accountability between service providers and customers in various industries.

Areas Covered in the Session

• Defining what’s in and out of scope
• Considering whether the opportunity is Results, Resource, or Relational
• Engaging stakeholders to ensure alignment with the overall strategy
• Integrating ongoing roles, responsibilities, and governance
• Harnessing automation and technology
  

Who Will Benefit

• Financial Management/Investment Management
• Legal/regulatory Management
• Commercial Management (both buy- and sell-side)
• Project Management
• Operations/Engineering Management
• Logistics/Transportation Management
• Contract Management
• Risk Management
• Third-party Risk Management
• People Management
• Procurement/category Management
• Supply Chain Management
• Change Management
• Communication Management
• Technology Management