5th Edition PMBOK® Guide—Project Statement of Work vs. Project Charter


1. Introduction

The Project Statement of Work is an input to the 4.1 Develop Project Charter process in the Initiating Process Group. The output of that process is the Project Charter.

The purpose of this post is to make the distinction between the Project Statement of Work and the Project Charter clearer. I will do this by answering the questions: What is it? How does it fit in the flow of PM processes? Who creates it? What’s in it? How does it compare to the Project Charter? How is it related to procurements?

2. Project Statement of Work (SOW)—What is it?

The best way I can describe the Project Statement of Work is as the “seed” of the project. It is watered during the Initiating Process into the Project Charter which causes it to germinate and become a seedling. The seedling is planted in the ground during the Planning process of creating the Project Scope Statement. It then turns into a plant during the Executing Process (where it is given sunlight and water, analogous to project resources) and Monitoring & Controlling Process (where it is checked periodically to see if there are any adverse conditions such as pests or diseases), and is finally harvested at the time of the Closing Process.

3. Project Statement of Work (SOW)—How does it fit into the flow of PM Processes?

The SOW is the seed or kernel of the idea for the project which is then developed at a high level for the purpose of approval of the project during the Initiating Process Group as process 4.1, Develop Project Charter. As seen in the previous post, this Project Charter, if approved, is developed at a higher level of detail in the Planning Process Group as process 5.3, Define Scope. So here’s the flow of how the documents are connected:

3. Project Statement of Work (SOW)—Who creates it?

This is going to depend on the end result of the project is going to be a product, service, or result that is used internally within the company, or is to be delivered to an external customer.

If the sponsoring organization is the one that is going to use the end result, then the sponsor is the one that originates the SOW. If a customer is the one that is going to use the end result, then the customer is the one that originates the SOW. The SOW may be part of a bid document (request for proposal, request for information, request for bid) or as part of a contract.

4. Project Statement of Work (SOW)—What’s in it?

The PMBOK® Guide references 5 inputs to the 4.1 Develop Project Charter process, two of which are the generic Enterprise Environmental Factors (EEF) and the Organizational Process Assets (OPA), the “company culture” and “company processes” that are inputs to many PM processes. The other three are the Project Statement of Work, the Business Case, and Agreements.

However, listing these three like this is somewhat misleading and obscures their interrelationships. Here are more detailed descriptions of these three inputs

a. SOW
The components of the Project SOW are as follows:

Element Description
1. Business need Why do the project? Because of some external factor such as:

  • Market demand (new demands create new products)
  • Technological advance (taking advantage of new materials and/or available technologies
  • Legal requirement
  • Government regulations (environmental, safety, etc.)
  • Environmental consideration
2. Product scope description Characteristics of the product, service, or result for which the project is undertaken. What is the relationship between that product, service, or result and business need the project addresses?
3. Strategic plan The project must contribute to the organization’s overall objectives or high-level mission statement.

b. Business Case

How is the business need different from the business case? The business case takes the business need outlined in the SOW (element 1 in the chart above) and justifies how the result of the project (element 2 in the chart above) will satisfy that need AND align with the strategic goals of the organization (element 3 in the chart above). It is the analysis that ties together the 3 elements of the SOW like so:

c. Agreements

As mentioned above, IF the product is to be made for a customer, then the SOW may come from the contract, a memorandum of understanding (MOU), a letter of intent, or some other form. The key is that the statement of work may come either internally (from the sponsor) or externally (from the customer).

I hope this explanation clears up the distinction between these three inputs of the process 4.1 Develop Project Charter other than the generic EEFs and OPAs.

5. Project Statement of Work: How does it Compare to the Project Charter?

Here are the elements of the Project Statement of Work (the “seed” idea of the project) compared to the elements of the Project Charter (used for approval of the project). Those elements which are similar are put in the same row. In this chart, the elements 1 and 3 from the above chart on the Project Statement of Work correspond to the first element of the Project Charter, and element 2 from the above chart corresponds to the second element of the Project Charter.

Project Statement of Work Project Charter
a. Business need, strategic plan a. Project purpose or justification (fits business needs, strategic plan)
b. Product scope description b. Project objectives, product characteristics
c. High-level requirements
d. Project assumptions, constraints, high-level descriptions, boundaries
e. Project success criteria
f. High-level risks
g. Summary schedule, budget
h. Stakeholder list
i. Project approval requirements and approval authority
j. Project manager assigned to project

The Project Statement of Work is therefore the core of the first two elements of the Project Charter.

The other elements of the project charter deal with the project scope rather than the product scope (Project assumptions, constraints, high-level descriptions, boundaries), the criteria for success and those risks that may prevent the project from being successful, the high-level constraints of time and cost, the stakeholder list, the project approval requirements and authority, and finally, the actual project manager assigned to the project.

The next post will discuss the difference between the Project Charter, the output of 4.1 Develop Project Charter and the Project Scope Statement, the output of 5.3 Define Scope.

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4 Responses

  1. Hi, thank you for a great statement. I constantly get confused on SOW as it is being used differently all the time. According to your explanation and PMBOK 5th, SOW does not include the budget for a project or budget for billable resources, instead Charter has this info. However in real world companies use SOW and have budget there and use it as main doc Authorizing project to start. Even Wikipedia states that SOW should include “Type of Contract/Payment Schedule”. Are we all right and there is no solid rules?

    • Well when you say “are we all right and there is no solid rules?”, you have to realize that the Project Management Institute puts the PMBOK Guide out as a recommendation. Some companies in the real world, as you say, do not follow the recommendation and put the budget in the SOW and not the project charter; that is why the Wikipedia article you mentioned talks about the SOW. When you are studying for the PMP exam, you have to answer the questions as if you are living on “Planet PMBOK”. In the real world, whatever document the organization decides on to be the “green light” document, whether it be the SOW or the Project Charter, is up to the organization. The important thing to remember is that there are certain things that need to be done before the project starts, and the high-level budget is one of them. But an important function of the SOW is to tie the budget to two different things: the market need for the product that the project will produce (the external need), and the strategic goals of the organization (the internal need). Even if the SOW authorizes the project to start in terms of financial resources, the project charter has another important function, and that is the give the project manager the authority to run the project. This is particularly important in an organization that is not projectized, but organized along traditional functional lines. The project manager would not have authority over the project members otherwise.

  2. always i used to read smaller posts that as well
    clear their motive, and that is also happening with this piece of writing which
    I am reading here.

  3. Mr. Rowley, you are a piece of PMBOK heaven 🙂 Your posts are really clear and although may seem long, concise and to the point.
    Thank you for your help.

    Lorena – Spanish woman living in Germany trying to take her CAPM exam in August 😉

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