Terms of Reference: what is needed and how to make them

Read Time:4 Minute, 6 Second

A terms of reference is a document with a detailed description of the requirements for a digital solution. And the clearer this document is, the higher the chance that the result will please all parties involved. The customer will get what he wants. And the development team will acquire a satisfied customer. The main purpose of the terms of reference is for the client and the implementer to understand each other correctly.

Let’s say right away that not all projects need a TOR. For some, a Product Vision is enough – the starting point of any IT project. It gives an idea about the digital solution, its goals and objectives.

Let’s take working with startups as an example. A client comes up with an idea and does not know how to implement it technically. The development of a startup starts with the MVP (minimum viable product), because you don’t know if it will take off or not. Another peculiarity of a startup is variability. A digital solution can change more than once, so the terms of reference may become irrelevant. For such projects, Product Vision comes to the rescue – you describe the vision for the project and begin to develop, test, receive feedback, and develop the product step by step.

What are the benefits of terms of reference for the customer?
The terms of reference is a tool, and like any tool, it should help the development of a digital solution.

Understanding the budget. When evaluating out-of-the-box digital solutions, you can’t tell at once how much it will cost. First you need to decide what needs to be developed – a website, an app, a service or a portal. Then you need to understand how the solution will work and what functions it will perform. And only on the basis of the information determine the timing and budget. The terms of reference just solves this problem.

Structuring of information. The company comes in for development with specific requirements for a digital product. And the requirements may be drawn up by different departments – the marketing, analytical, commercial and technical teams. And each division will have its own tasks. The digital solution must integrate and fulfill all these requirements. Thanks to the ToR, all the information obtained is built into clear requirements and recorded in a document.

Determination of the competence of contractors. If the client sees a clear and structured terms of reference, then it is possible to continue working with the contractor. If he sees confusion and does not understand what is described in the document, it makes you think about the reliability of the developer. The terms of reference can be used to “feel out” the contractor and evaluate his competence.

Who prepares the terms of reference
In our practice, we encounter two situations: the client comes with the ToR or we write the ToR based on the client’s request. Consider each option.

The client comes with TOR. You know your business and your tasks better than anyone else. In this case you come with a ready TOR, we study it, give an estimate of time and budget. And if all is satisfactory, we conclude the contract and start work.

You do not have to try to use technical language, you can describe the product in your own words. This is where Product Vision, which we wrote about above, comes in. It is enough to come with a document in which the basic requirements and wishes will be fixed.

The developers write the TOR. This option has its own advantages. IT-companies have more experience in development, because they have hundreds of composed terms of reference and developed websites, portals, mobile applications and services.

When you order the development of TOR from a company, both sides work in tandem. We dive into the business, study the target audience, find out the requirements for the product and get acquainted with your expectations. You answer all the questions and try to give full information about your objectives. The bottom line is the same – everyone involved in the process needs to be clear about what needs to be done.

What if you use a ready-made template from the Internet
Firstly, there are a huge number of templates, and to find among them the most suitable for your company is difficult. You will have to reread a lot of technical requirements and try to piece together something of your own.

Secondly, every digital solution companies create for their own purposes. And if you take a ready-made template of technical specifications from the Internet, you can copy someone else’s goals and forget about your own.

Third, the template may contain a lot of unnecessary items that your company does not need. And conversely, there may be a lack of requirements that your project can’t do without.

If you go straight to the experts, they will write a requirements specification based on your company’s goals.