You Don't Always Need a Detailed SOW

19 Dec, 2024

Trust between a buyer and a vendor is a foundational element that directly influences the level of detail in a statement of work (SOW). Here’s how they are related:

To Detail Or Not To Detail

You don't always need a detailed SOW, but sometimes it's highly encouraged. Folks tend to get religious about this, but reality dictates there shouldn’t be an absolute position. The situations SOWs cover are as numerous as work that can be imagined.

Generally, an SOW’s function is to drive clarity. It's the primary mechanism facilitating conversation between buyers and vendors on what they're willing to commit to doing (in writing). This means when you're trying to strike the right balance, it boils down to trust.

1. Higher Trust, Less Detail Needed: When trust between a buyer and vendor is strong, SOWs can afford to be less granular. Buyers may feel confident that vendors will understand the project’s needs and that they’ll make decisions in the buyer's best interest. Trust allows for more general terms because, presumably, the buyer is less concerned with the possibility of miscommunication or poor delivery. If everyone knows what they're doing and the relationship between buyer and vendor is healthy and mature, sometimes ambiguity is okay¹.

2. Lower Trust, More Detail Required: In relationships where trust is lower or untested, buyers should demand a more detailed SOW to reduce risk. Outlining more aspects of project-specific deliverables, deadlines, performance metrics, and contingencies—to ensure accountability and transparency. It also minimizes the possibility of misunderstandings. Writing it all down leaves less to interpretation.

Working out an SOW is usually a productive exercise. Often, well-established relationships with high trust still routinely produce detailed SOWs as a sign of goodwill and out of respect for the relationship. It's a good business practice. But without that trust, avoiding a detailed SOW usually means one of two things:

1. The buyer doesn't know what they want to buy (or what they want done).
2. The vendor doesn't know what they are selling (or what you want).

And in either of those cases, it's an even more important reason to prioritize a detailed SOW.

Trust & Communication

As with most things, it comes back to communication.

Communication affects trust → trust affects flexibility. When you’re communicating well, you’re fostering trust. Good communication creates a shared history of intuiting and understanding the needs of the other. In turn, that affords flexibility. Each party assumes goodwill. As the needs of the project inevitably change, flexibility emerges to the degree of certainty that changes or oversights will be resolved in a manner that’s fair for both parties.

High-trust relationships streamline the SOW process, focusing on high-level outcomes rather than micromanagement, while a lack of trust necessitates more detailed and precise documentation as a safeguard. In business, you’ll necessarily come across both (it's not practical for all business relationships to be high-trust) so decide where to focus. And as always, don’t let perfect be the enemy of good.

#procurement