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In this video presentation, Professor K discusses how to develop a statement of work, an essential project management tool that outlines work requirements, timelines, services, activities, deliverables, and budget information. The statement of work ensures that all parties involved in a pen test are clear on what is included and what is not. It is the last document agreed upon before work begins and outlines the work to be performed, serving as the first step in a project with stakeholders. Key components include the scope of work, schedule, and responsibilities to the customer.