What is a SaaS Statement of Work (SOW)? 

A SaaS SOW is a document that defines the work the vendor will carry out with the client while implementing a SaaS application. It usually includes only the work done during the initial implementation of the application and not the ongoing performance, which is covered by the SLA. 

The SOW is a legal document that comes in addition to the main SaaS contract and includes the scope, timelines, and deliverables. 

It is necessary to understand the policies of the organization regarding the purchase of SaaS applications and to include all the requirements of the project in the SOW. 

A SaaS SOW should include:

• project scope
• doelstellingen
• deliverables
• work standards
• schedule
• acceptance criteria
• payment terms
• project support
• security issues
• non-compliance terms. 

These elements are very important for enhancing communication and avoiding misunderstandings. A well-defined SOW defines responsibilities, which helps prevent scope creep and unforeseen costs.

A SaaS SOW is distinct from other SOWs in that it focuses on the implementation and setup of SaaS applications. The general SOW covers various projects. 

The SaaS SOW is also bound by a Master Service Agreement (MSA), which includes terms about the scope of the work, what will be delivered, the timeline, and the budget. 

This detail helps in setting up the SaaS application effectively and efficiently.

A SaaS SOW clarifies the specific services being provided under a broader MSA, ensuring both the client and vendor have a shared understanding of the project’s scope. 

This helps in: 

• creating clear expectations
• setting roles and responsibilities
• avoiding scope creep. 

Such practices help in keeping the project within time and budget, foster trust, avoid misunderstandings, and create an open environment.

A SaaS SOW should be created very early in the project life cycle, before giving the project to any team members or engaging with software developers and companies. 

It is important to set the terms of the project under the existing Master Service Agreement (MSA). 

Common SaaS SOW challenges include: 

• misaligned expectations
• insufficient detail leading to confusion
• scope creep

Vendors have problems with too many modification requests, and both parties have problems in properly setting the price and the delivery schedule as a consequence of an incomplete SOW.

Writing a SaaS SOW includes the following steps:

1. Refer to the Master Agreement in place and ensure it does not contradict any of the terms in the SOW. 
2. Use clear language when writing the SOW and be very specific about the project. 
3. Clearly define what constitutes a successful deliverable, and this involves listing all the steps to be taken with particularity. For example, instead of saying ‘Design the user interface,’ specify ‘Create three mockups of the user interface based on provided wireframes, with revisions approved by the client’. 
4. Be flexible but deliver the right amount of detail, communicate with the client about the SOW, and also make sure that the legal terms are clearly explained for a complete document.