Establishing SOW Clauses

Objective

After completing this lesson, you will be able to review the legal Clauses of a statement of work in SAP Fieldglass.

SOW Clauses

Reviewing and/or adding Clauses is the third step in the creation of an SOW.

The breadcrumb trail of an SOW creation page, showing the third step: Clauses

While the completed SOW can be seen as an agreement itself, some organizations require specific legal parameters to further clarify the terms of the project. The services module in SAP Fieldglass has the ability to store and use this legal language for contractual use.

Clauses are an optional functionality that can be used to pre-populate any standard legal language that needs to be captured on the SOW.

The Clauses page of an SOW during creation, showing the section named 1. Definitions and Interpretation, which includes the category 1.01 Additional Definitions and the text of the clause itself. A checkbox above the clauses called Define Clauses is checked, and below it is a button titled Copy Section, Beside that is a link called Add Section.

Some organizations have standard legal language they require for contracts, so they have pre-defined Clauses on all their SOW Templates so Hiring Managers do not need to manually add them when creating each new SOW. However, SOW creators can, if needed, add additional Clauses to the SOW directly on this page by selecting the Add Section or Add Category links and typing in the new Clause.

Review the Clauses in the SOW

WorkingNet Networking, Inc., a global manufacturer of data networking equipment, is building several new distribution centers in several countries, while simultaneously implementing new logistics software and processes.

Their first new distribution center is being built in the US, in a suburb of Atlanta, Georgia, so WorkingNet will use the new Atlanta hub as their base of operations. Darius, the Logistics Manager for WorkingNet, is overseeing the project.

Darius has engaged CarryAll Consulting, a logistics design and implementation firm, to help streamline their logistics processes as well as implement the new software.

Together they determine that the project will take six months—from January 1st through June 30th—and will be budgeted at 300,000 USD. A payment of 75,000 will be made at 50% completion, and 100,000 will be paid at completion.

The project also requires SOW Workers which includes a project manager overseeing a team of five implementation consultants. The project manager's hours will be tracked and billed at 125 USD per hour and the consultants at 100 per hour.

In order to engage CarryAll, Darius will use SAP Fieldglass to create the statement of work.

Darius has already chosen the appropriate supplier and SOW template for the SOW he would like to create and has added the details of the project. Now he must review and, if necessary, add legal language to ensure supplier compliance.

Since WorkingNet has standard, and mandatory, legal language that they use for all their projects, they have pre-defined clauses configured on their SOW Templates, making the creation process more efficient for Darius. However, he needs to add an additional clause to ensure the supplier agrees to use only WorkingNet networking hardware for the project.

Follow along as Darius add the new clause.

Summary

Clauses are optional but essential for outlining legal parameters and ensuring supplier compliance. The process is streamlined by pre-defined clauses, with the ability to add custom clauses as needed.

Key Points:

  • Clauses Define Legal Parameters: They clarify project terms and ensure supplier compliance.
  • Pre-defined Clauses for Efficiency: Standard legal language can be pre-configured on SOW templates.
  • Adding Custom Clauses: Users can add new sections or categories for specific project requirements.
  • Collaboration on Clauses: Suppliers can request changes, tracked via redlining, with Accept/Reject options for buyers.
  • SOW Status Changes: The SOW status updates to 'Pending Clause Review' until all clause terms are agreed upon.