What is Statement of Work (SOW)?

Imagine you want to hire a software development company to build the software you want. How do you make sure that you choose a reliable company that understands all of your requirements and a company that is capable of meeting your requirements? And how do you ensure that all expectations and requirements are fully documented even after choosing the company? Statement of Work (SoW) comes for help with such struggles. This article is aimed at explaining why a Statement of Work (SoW) plays a crucial role in the software development industry.

Purpose of the SoW Document

The purpose of SoW is to cover and document all the requirements and information about the project and to regulate the agreement between the two companies. It documents all responsibilities of both a software development company (project requirements, technical requirements, timeline, etc.) and a client (payment schedules, terms to collaborate, etc.).

It is very important that the software development company you have chosen provides you with highly-detailed SoW. Otherwise, there is a high chance that there will be a misunderstanding between the two companies throughout the entire project life cycle. SoW boosts cooperation and minimizes the conflict and confusion between two parties.

SoW is a business document rather than a legal one. But still, the importance of the SoW shouldn’t be underestimated because it defines and documents every bit and piece of the project. That is the reason why we regard SoW as an important part of the requirements engineering phase of the project.

Who will provide SoW Document?

In other industries (i.e. construction, healthcare, etc.) SoW is prepared by the party who is requesting service (client). But in the software development industry SoW is usually prepared by the software development company itself. Because not the client, an outsourcing vendor is the one who can prepare and deliver high-quality SoW with detailed project information.

At NovaLab Tech, we prepared our custom SoW template and we deliver highly-detailed SoWS for each project regardless of its size. Below there is an example of the custom SoW template we have prepared. You can also access our open-source SoW here.


What is included in SoW in the software development industry?

What is Scope of Work and is it the same with Statement of Work?

The process of defining the scope of the project is called preparing Scope of Work and it is considered to be an important component of the project. Although the terms “Scope of Work” and “Statement of Work” are used interchangeably by some people, this doesn’t necessarily mean they are the same terms. Scope of Work is only a crucial component of Statement of Work and correspondingly, Statement of Work means much more than Scope of Work.

The purpose of the Scope of Work is to define what is included in the project. If we look at the core meaning of the word “scope”, we can find out Cambridge Dictionary’s definition of the word “scope”:
the range of a subject covered by a book, programme, discussion, class, etc.

So, the purpose of the Scope of Work is to clarify the range of the features covered by the Statement of Work that is prepared for the project.


To summarize everything, the Statement of Work is an important part of requirements engineering process and it serves as an collaboration tool between a client and a software development company. It provides both parties with a shared and common understanding of the project. It can also serve as a legal document to make an agreement between two parties.

We, at NovaLab Tech, have created more than 150 SoWs for startups and organizations all over the world. So, as the company who have dealt with so many SoWs, we can say that SoW serves as a differentiation point that separates a successful collaboration from a failed one.