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In the video, the concept of a Statement of Work (SOW) is explored. A SOW is a detailed document that outlines what is required for a project, including work to be done, products to be created, deadlines, processes, and procedures. It is often a contractual document, appearing as an appendix to the main contract, as each piece of work may require its own SOW. The SOW can include various details agreed upon by both parties, such as project background, product specifications, acceptance criteria, quality standards, financial measures, and more.