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In this video, Professor K discusses the importance of developing a statement of work as a project management tool. This document outlines work requirements, timelines, project-specific services, activities, deliverables, and budgetary information for a pen test project. The statement of work ensures that all parties understand what is included in the project and what is not. It is the final document agreed upon before work begins and outlines the work to be performed, defining deliverables and responsibilities to the customer. Key parts of the statement of work include the scope of work and the project schedule.