The core definition of a statement-of-work engagement is the execution of a project or service that delivers a targeted, defined result. As such, success of an SOW engagement will be defined by its cost-effectiveness, quality or the value it provides to the organization. Along the way, there are a number of failure modes that can occur to disrupt the SOW engagement’s successful execution.
The No. 1 failure mode repeats itself on a regular basis: poor design.
Poor SOW Engagement Design and Scope Definition
A poorly designed or vaguely written SOW engagement can have multiple, cascading consequences, triggering numerous other failure modes: the engagement is late on completion/misses critical path milestones and fails; it undergoes excessive change orders during the engagement execution; is over budget, mainly because it was poorly conceived originally and subsequently underfunded; and finally, scope creep can occur with a poorly designed SOW engagement that has vaguely defined boundaries/limits. And of course, if the SOW is written poorly, then it could be assumed that the SOW contract governance is potentially weak as well and not equipped with the required tools to effectively management the resulting failure modes.
Poor SOW engagement design is indeed the number one failure mode in executing and managing an SOW engagement. And what’s fascinating about this challenge is it occurs right in the very beginning of the engagement management process and then potentially drives the rest of the SOW engagement process into other familiar failure modes mentioned earlier.
There are two major SOW engagement design challenges that surface on a regular basis. One is content/scope-based and the other is managing engagement execution expectations around speed, costs and quality.
Content. The SOW content-based failure mode has to do with designing the actual scope of the project or service in terms of content focus and deliverable(s) required by the SOW engagement manager. What actually needs to be done and how? Sometimes, a well-designed SOW engagement will still head off into directions that are unanticipated by the SOW engagement manager and the scope needs to be changed, adjusted and funded. But such scope creep can usually be limited. Better SOW design (skill sets/tools/best practices) will empower SOW engagement managers to create more reliable SOW projects and services designs and content scope definitions. The use of scope definition templates, checklists and engagement of other design methodologies can make considerable progress in mitigating this fundamental failure mode challenge.
Speed, cost and quality. Creating an organizational discipline in the design and planning of an SOW project or service can sometimes be as simple of setting the correct engagement management expectations. Sometimes a poorly written SOW engagement stems from lack of understanding of a project/services management “constraints.” Setting expectations around SOW engagement speed, cost and quality as a key definition specification of an SOW project will pre-set the performance levels of these three key project management dimensions.
Think about an SOW engagement as if it is being governed by a management triangle, with each side of the project triangle representing speed, cost and quality — an SOW engagement “constraints triangle.” In a pre-specified SOW project, you can’t have all three sides set at the lengths; rather, you might want them to be arbitrally set. You can set two sides of the triangle at desired lengths (stated costs, firm deadline, for example), but the third side must be adjusted to form a dependent management triangle with the other two sides (e.g., a lower cost and/or a shorter deadline would affect the quality leg). In order to change the length of that third side, a compromise has to be made to complete the project management triangle — with one or both of the other two sides.
This kind of trade-off happens constantly in everyday business decisions. Time, resources and quality levels are not endless and each of these management dimensions’ affects the others. The SOW engagement design question here is proactively defining the priorities on each of these management dimensions and setting limits on how each will be priorities to limit change orders and unplanned scope creep/unbudgeted financial impact.
Another design tip that can create important execution benefits and avoid multiple failure modes is defining the work classification correctly up front. A staff augmentation engagement packaged as an SOW project/service theoretically could have no end point, as the engagement deliverable/result would be, for all practical purposes, not defined with much specificity. Consulting closely with engagement managers on how to execute required work with the best work classification options should be a growing contingent workforce program management best practice. Executed well, this design practice will mitigate a great deal of failure modes and challenges.