Milestones

When working with Statement of Work contracts, it's common to use milestones as a way to manage progress and performance. A milestone is a landmark moment in a statement of work that must be achieved before moving on to the next step or phase. 
 
In this guide: 
 
  • What are milestones?
  • When does a Statement of Work contract need milestones?
  • How to define a milestone
  • Variation orders
  • Who is responsible for managing milestones?

What are milestones?

As described above, milestones are key events in a statement of work. However, it is important to note, milestones are not activities – they should reflect a goal, result or outcome. 

Milestones are commonplace in project management and work in both Agile as well as more traditional sequential project management processes. For example, a milestone could equally be a sprint goal or a waterfall step.

Much as they govern and prescribe outcomes in a project, they also prescribe what should be achieved at given points in a statement of work. As such, milestones are control devices to keep the statement of work moving in the desired direction.

A well-crafted milestone should be structured so determining whether an outcome has been achieved is an objective true or false question, with no ambiguity or subjectivity involved. 

Milestones can be internal events for the project team but can also be tied to events that trigger reviews from external stakeholders or schedule invoice payments.

When does a Statement of Work contract need milestones?

Milestones are not reflective of the duration of a piece of work and, in reality, every SoW contract contains milestones. The only difference is whether the milestone events are documented. 

In a very basic example, a Statement of Work to deliver a virtual Health & Safety training session might contain the following milestones:
 
  1. Training session date confirmed, and invites sent
  2. Agenda agreed and distributed
  3. Delivery of a 45-minute training session via virtual meeting
  4. Distribution of post-session reference material

It's easy to see how skipping or not delivering any one of these milestones would result in a dreadful virtual Health & Safety training session! 

Documenting and formally managing the milestones allows both the business procuring the service as well as the service provider to control outcome of the statement of work.

How to define a milestone

A key point to remember when defining a statement of work's milestones is that milestones are key events and outcomes vital to the overall deliverable. Milestones are very different from tasks.
 
Using the virtual Health & Safety example from earlier, the first milestone is "1. Training session date confirmed, and invites sent". Delivering this milestone could incorporate the following tasks, as an example:
 
-       Create a Doodle to find a date that works for the attendees
-       Create placeholder Calendar invite
-       Setup virtual meeting
-       Create invite email content
-       Approve invite email content
-       Import attendee email data into virtual meeting tool
 
Once you've identified the key deliverables required in the statement of work, the next step is to create each deliverable's acceptance criteria so that it can be evaluated easily and objectively as true or false.
 
For example:
Good = "Delivery of a 45-minute training session via virtual meeting"
Bad = "Deliver a fun, lively, training session"
 
It's easy to see how evaluating the outcome of the second example could be completely subjective.
 
Once the SoW's milestones are defined and tuned, they can be formally recorded and controlled as part of the ongoing management of the statement of work.

Variation Orders

Of course, things change. Customers ask for new innovation, businesses diversify, markets shift. Statement of work milestones can be changed but to do so formally requires a variation order.
 
A variation order is a contractual request for change. It is a side contract, which specifies the changes to the statement of work and/or its milestones. The variation order is a formal specification of the additional, or different, outcomes required along with any changes to the associated commercial terms. 

Who is responsible for managing milestones?

It's easy to assume that managing milestones is the responsibility of the project manager, however the real answer is that everyone involved on both sides of the statement of work is ultimately responsible for ensuring milestones are achieved.
 
The supplier – With milestones often directly linked to invoice payments, the supplier or service provider will want to ensure milestones are achieved.
 
The business – The successful outcome of the statement of work is dependent on hitting milestones. This means the project manager, procurement and business sponsor all have a role to play in successfully managing milestones

Summary

Milestones are an important tool for successfully managing and delivering work through Statement of Work contracts, controlling delivery, direction and budget. To learn how to use Zivio's flexible milestone functionality, get in touch and arrange a demo.
 

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