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Charter vs Statement of Work

A project charter or a statement of work (SOW)? What makes more sense to deliver to your client? Well, there’s a number of other questions that the answers to will help drive your decision. In this blog I’ll discuss when it makes sense to have a project charter or a statement of work (or both).

What is a statement of work? A SOW is typically a contractual document that outlines in no uncertain terms the price and scope of services that your organization will deliver to the client. Often times schedule is another key component but depending on the type of engagement the SOW is for, the schedule may be left until a later point when other determining factors are decided.

How is this different from a charter? In some cases it’s not very different at all. The major difference between a charter and a SOW is that a charter is typically not a legally binding agreement. It’s viewed as a ‘contract’ on how all of the stakeholders of the project will work together as well as a more detailed description of the project work, stakeholders, schedule and risks that a specific project has. Project sponsors typically will sign the charter however these documents are not typically viewed as binding.

Do I need to supply both documents to my client? Well that depends on a few things. Are you obligated to deliver a project charter? If your SOW states that a deliverable or work product of your project is a charter then you are obligated to produce one. Another question you have to ask is what components are not in the SOW that are needed that project charter would cover off? Are you stakeholders listed? What about your project management plan? How are communications going to be handled on this project? These are all key components to your project and they need to be formally communicated somehow to your project sponsor.

If your project is small in size it may not be worth the overhead of documenting a formal project charter, however the components I mention above still need to be addressed in some fashion, even if it’s informally communicated to your sponsorship.

In most cases, a SOW is typically used to handle the ‘legal-ese’ of a project and set forth the formal terms and conditions by which the two sides are going to work whereas a project charter is a little more project-focused. In most cases, you should really be utilizing both documents as each address a specific need for your project. There are always going to be exceptions (ex. Size of project, client relationship, etc) that may lessen the need for a charter. As always, using your best judgement to determine where and when a charter is needed is typically your best bet but by using some of the criteria I’ve noted above, hopefully that makes your decision a little clearer.

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