The Customer faces an almost impossible task – to put his idea into the head of the Contractor and motivate him to achieve a business result.
Why do they often choose to write a detailed action plan in the form of a statement of work? It is not necessary to have 100% control over the project from the current moment and two years in advance before starting work. Moreover, it can be harmful and expensive to do Big Upfront Design. The Mario Andretti racer said: “If you control everything, you don’t eat fast enough.
However, there are a number of objective reasons that lead to a detailed description of the entire work plan before the start of the project.
Reduce risks, reduce uncertainty
Before the start of the project both the Customer and the Executor will be glad to know the list of tasks, budget and release date. When all three components are known and unchanged, then it is easier to plan the work.
If you do not fix at least one of the vertices of the project triangle, it creates uncertainty. People do not like to live in uncertainty. We avoid uncertainty with all our might because it absorbs energy and creates stress.
To reduce uncertainty, we have to predict the future, build a plan and move as planned. As Joker said in the dramatic scene at the hospital, people willingly agree to move according to the plan, whatever it is, the fact that there is a plan is important.
From this point of view, the ideal uncertainty reducer is the terms of reference, fixing all the vertices of the triangle.
The task for the “thoughtless” performer
If you subcontract or subcontract a project, it’s easier for everyone to work with the task list, which is passed down the chain. The more formalized the task is, the easier it is to report back. The more detailed the requirements are described, the fewer questions all the participants of the “thoughtless” chain will have.
TOR is required according to the regulations
Large companies and state structures often have regulations, according to which the availability of TOR is a mandatory point in the coordination of the budget for the project. Regardless of whether the writing of the TOR for a specific project is justified, it will have to be written, approved and signed.
No trust from one of the parties
If the Customer does not trust the Contractor or the Contractor does not trust the Customer, they have a natural desire to protect themselves through a detailed description of the task.
The customer hopes to get a high quality result at the right time and on the agreed budget. The contractor hopes to receive money for the tasks he has promised to implement and not to do more than what has been agreed. At the same time, they both think about future disputes, so they write and agree, coordinate and write…detailed TOR.
The proxy manager creates barriers to communication. This is the kind of person who sends letters from the Customer to the Executor and back, does not allow communicating directly, motivating his value by employing people behind his shoulders. He is a parasite in the chain of communication, will pass information with a distortion defect.
If you have proxy managers in your communications, it is easier for everyone to write a detailed TOR and implement tasks without unnecessary contact with each other.
What if there is no reason in your case
Whether you need to invest money and time in the creation of a detailed TOR is a difficult question. I will give you an example of how we make a choice. In our company TOR are created only if the customer has a corporate right, which prohibits to start a project without a formal TOR. We make these Tors within the framework of IT product analyst. The final document consists of Impact Mapping, Customer Journey, User Story Mapping and architectural schemes.
If you don’t need to write the TOR before the project starts, then the formal document is not created, and all the activities on IT product analytics are included in the process of creating the IT product.
We do not work on subcontracting, and we always integrate into the customer’s business in order to build communication as close as possible.