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In this video, Professor K discusses the importance of developing a statement of work in project management. This tool outlines project work requirements, including timelines, specific services, deliverables, and budgetary information. It ensures all parties involved know what is included in the project and what is not. The statement of work is the final document agreed upon before starting work, outlining what will be performed, and defining deliverables and responsibilities to the customer. It is crucial to complete this step with stakeholders before beginning a project.