Glossary
The vocabulary of scope, contracts and agency margin.
61 terms your PMs, account leads and finance team should define the same way. Search, jump by letter or link straight to a definition.
Realization rate
Revenue billed divided by the value of hours worked at standard rates. On fixed-fee projects, realization falls whenever the team delivers work outside the contract without a change order.
Change order
A signed amendment to an SOW that adds, removes or alters work, with the effect on price and schedule stated. Good change orders cite the original clause, quote the request and itemize hours by role.
Exclusion clause
SOW language stating what is not included in the engagement, ideally by naming systems, counts and environments, and ending with how excluded work can be added through a change order.
Capped time and materials
A commercial model where the client pays for hours worked up to an agreed ceiling. Below the cap risk is shared; above it the work behaves like a fixed fee unless a change order raises the cap.
61 terms
A
- Acceptance criteria
- The specific, testable conditions a deliverable must meet before the client signs it off. Clear acceptance criteria stop "done" from being redefined late in a project, which is one of the quieter routes for scope creep.
- Related:Definition of doneSign-offDeliverable
- Ambiguous deliverable
- A deliverable described with words that both sides can read differently, such as "standard reporting" or "responsive design". Ambiguous deliverables are the most common source of good-faith scope disputes and are worth rewriting with counts and named systems before signature.
- Related:DeliverableExclusion clauseStatement of work
- Assumption log
- A living record of the facts an estimate depends on, such as data volumes, API availability or content dates, each with an owner and a status. When an assumption breaks, the log provides the evidence for a change order.
- Related:Client dependencyChange orderStatement of work
B
- Billable utilization
- The share of a person's available hours spent on client work that can be billed. High utilization does not guarantee profit on fixed-fee work, because hours can be fully utilized and still unpaid if the work is outside the contract.
- Related:Utilization rateRealization rate
- Blended rate
- A single hourly rate that averages the rates of every role on a project, weighted by their expected hours. Agencies use blended rates to price change orders quickly and to calculate realization consistently.
- Related:Rate cardRealization rateEffective hourly rate
- Boundary rule
- TWINJAM's structured representation of one contractual limit extracted from an SOW, such as a deliverable, an exclusion, a revision cap or an assumption. Incoming requests are compared against boundary rules to detect divergence.
- Related:Scope divergenceExclusion clauseStatement of work
- Budget variance
- The difference between planned and actual cost at a given point. Separating variance caused by estimation error from variance caused by unpriced scope tells an agency which problem to fix.
- Related:Earned valueEstimate at completion
- Burn rate
- The speed at which a project consumes its budget, usually measured in hours or currency per week. Comparing burn rate with the percentage of deliverables complete is the earliest warning that a fixed fee or cap will be exceeded.
- Related:Estimate at completionEarned valueCapped time and materials
C
- Capped time and materials(Capped T&M, not-to-exceed)
- A commercial model where the client pays for hours worked up to an agreed ceiling. Below the cap risk is shared; above it the work behaves like a fixed fee unless a change order raises the cap.
- Related:Time and materialsFixed feeNot-to-exceed
- Change control
- The agreed process for requesting, estimating, approving and recording changes to project scope, budget or timeline. A short, predictable change control process is what makes exclusion clauses usable in practice.
- Related:Change orderChange request
- Change order
- A signed amendment to an SOW that adds, removes or alters work, with the effect on price and schedule stated. Good change orders cite the original clause, quote the request and itemize hours by role.
- Related:Change requestChange controlStatement of work
- Change request
- A proposal to modify agreed scope, raised by either the client or the agency. A change request becomes a change order once it has been estimated and approved.
- Related:Change orderChange control
- Client creep scorecard
- A per-client view of out-of-scope request volume, hours and change order outcomes over time. Agencies use it at renewal and when pricing new work, to see which relationships carry hidden delivery cost.
- Related:Scope creepRealization rate
- Client dependency
- Anything the agency needs from the client to deliver on time, such as content, data, access or decisions. Late or incomplete dependencies are a legitimate change order trigger when the SOW states them clearly.
- Related:Assumption logStatement of work
- Consolidated feedback
- Review comments gathered by the client's named approver into a single set before being sent to the agency. Requiring consolidated feedback is what makes a revision round a countable unit.
- Related:Revision roundNamed approver
- Contingency
- A visible budget reserve for known uncertainties, released only through change control. A stated contingency is more honest than inflating every estimate and gives PMs a clear mechanism when risks materialize.
- Related:Change controlFixed fee
D
- Definition of done
- A team-level checklist every piece of work must satisfy, such as code reviewed, tested on supported browsers and documented. It complements acceptance criteria, which are specific to a deliverable.
- Related:Acceptance criteriaSign-off
- Deliverable
- A discrete, verifiable output the agency commits to provide, such as a screen, an integration, a report or a design concept. Deliverables should be countable and named so both sides can tell when one has been added.
- Related:Acceptance criteriaWork breakdown structureAmbiguous deliverable
- Descoping
- Removing or deferring agreed work, usually to make room for a new request without changing the budget. Offering a descope swap alongside a priced option keeps change conversations collaborative.
- Related:Change orderPhase gate
- Discovery sprint
- A short, timeboxed engagement that reduces uncertainty before a larger build, producing research, low-fidelity designs and a delivery proposal. Discovery should be scoped by outputs and fidelity, or it drifts into unpaid delivery.
- Related:TimeboxTechnical spikeStatement of work
E
- Earned value
- A measure of the budgeted value of work actually completed at a point in time. Comparing earned value with actual cost shows whether a project is over or under budget for the progress it has made.
- Related:Burn rateEstimate at completionBudget variance
- Effective hourly rate
- Revenue from a project divided by the total hours worked on it. On fixed-fee work, every unbilled hour lowers the effective rate, which makes it a direct read on how much scope creep cost.
- Related:Blended rateRealization rate
- Estimate at completion(EAC)
- The forecast total cost of a project when it finishes, based on spend so far plus the estimate to complete. Rising EAC on a fixed-fee project is the signal to review open scope before reviewing the plan.
- Related:Burn rateEarned value
- Exclusion clause
- SOW language stating what is not included in the engagement, ideally by naming systems, counts and environments, and ending with how excluded work can be added through a change order.
- Related:Out of scopeStatement of workBoundary rule
F
- Feature freeze
- A point after which no new functionality is accepted into a release, so the team can stabilize and test. Requests after the freeze are scheduled for a later release or handled as a change order.
- Related:Phase gateChange control
- Fixed fee(Fixed price)
- A commercial model where the client pays an agreed price for defined deliverables regardless of hours worked. The agency carries effort and scope risk, which makes scope monitoring essential to margin.
- Related:Capped time and materialsTime and materialsValue-based pricing
G
- Gold-plating
- Adding features or polish the client did not request, usually by the delivery team's own initiative. Unlike client-driven scope creep it originates internally, but it consumes margin in exactly the same way.
- Related:Scope creepDefinition of done
- Gross margin
- Revenue minus direct delivery cost, divided by revenue. For agencies, delivery cost is mostly the loaded cost of people's time, so unbilled hours reduce gross margin directly.
- Related:Project marginRealization rate
M
- Master services agreement(MSA)
- The umbrella contract that sets legal and commercial terms for a client relationship, such as liability, IP, payment and change control. Individual projects are then defined in SOWs issued under the MSA.
- Related:Statement of workChange control
- Milestone
- A significant checkpoint in a project, often tied to a deliverable sign-off or a payment. Milestones are natural moments to review the assumption log and any open scope requests with the client.
- Related:Sign-offPhase gate
N
- Named approver
- The single person on the client side authorized to consolidate feedback and approve deliverables. Naming the approver in the SOW keeps revision rounds countable and prevents late stakeholders from reopening approved work.
- Related:Revision roundConsolidated feedbackStakeholder map
- Not-to-exceed(NTE)
- A clause setting the maximum a client will pay under a time-based contract without further approval. Notice thresholds, such as a warning at 75% of the NTE amount, make the limit workable.
- Related:Capped time and materialsBurn rate
O
- Out of scope
- Work that is not covered by the signed SOW, either because it is explicitly excluded or because it is not among the listed deliverables. Out-of-scope work is not forbidden; it simply needs a change order or a deliberate decision to absorb it.
- Related:Exclusion clauseScope creepChange order
P
- Phase gate
- A formal decision point between project phases where the client confirms the next phase's scope and budget. Phase gates give deferred ideas a legitimate home instead of letting them leak into the current phase.
- Related:MilestoneDescopingDiscovery sprint
- Project margin
- Gross margin measured for a single engagement. Tracking it monthly, rather than at close, lets agencies spot unpriced scope while there is still time to raise a change order.
- Related:Gross marginBurn rate
Q
- Quick favor
- An informal, usually small client request made in chat and delivered without a ticket or change order. Individually harmless, quick favors compound into a significant share of unbilled delivery on fixed-fee projects.
- Related:Scope creepSmall-change allowanceUnbilled WIP
R
- RACI matrix
- A table showing who is Responsible, Accountable, Consulted and Informed for each decision or deliverable. Including client roles in the RACI clarifies who can request changes and who can approve them.
- Related:Stakeholder mapNamed approver
- Rate card
- The agency's published hourly or daily rates by role. Attaching the rate card to the SOW means change orders can be priced from an agreed schedule rather than negotiated each time.
- Related:Blended rateChange order
- Realization rate
- Revenue billed divided by the value of hours worked at standard rates. On fixed-fee projects, realization falls whenever the team delivers work outside the contract without a change order.
- Related:Utilization rateEffective hourly rateWrite-down
- Requirements volatility
- How often a project's requirements change after they are agreed. High volatility is a signal to move uncertain workstreams from fixed fee to capped time and materials.
- Related:Scope creepCapped time and materials
- Retainer
- A recurring monthly agreement for ongoing services. Retainers defined in deliverable units, with stated rollover rules and an overflow process, hold their margin far better than open pools of hours.
- Related:Retainer overflowRolloverSmall-change allowance
- Retainer overflow
- Work requested beyond a retainer's monthly unit or hour cap. Repeated overflow on the same unit is a signal that the retainer should be resized, which is a growth conversation rather than a scope dispute.
- Related:RetainerRollover
- Revision round
- One set of consolidated feedback on a deliverable from the named approver, delivered within an agreed window. Defining a round precisely is what makes revision caps enforceable.
- Related:Consolidated feedbackNamed approver
- Rollover
- The rule for whether unused retainer units or hours carry into the next period. One-month rollover is a common compromise; whatever the rule, it should be written down before month one.
- Related:RetainerRetainer overflow
S
- Scope creep
- The gradual, uncontrolled expansion of project work beyond what was agreed, without matching changes to budget or timeline. PMI's Pulse of the Profession 2018 found 52% of projects experienced it, up from 43% five years earlier.
- Related:Out of scopeQuick favorGold-plating
- Scope divergence
- A detected difference between a request, ticket or pull request and the boundary rules extracted from the SOW. In TWINJAM, each divergence carries the clause it was compared against and a confidence score for PM review.
- Related:Boundary ruleScope creep
- Scope statement
- A concise description of a project's objectives, deliverables, boundaries and constraints, often the opening section of an SOW. It frames how every later clause is read.
- Related:Statement of workDeliverable
- Sign-off
- Written client approval that a deliverable or milestone meets its acceptance criteria. Sign-off closes the deliverable, so later changes to it are new work rather than revisions.
- Related:Acceptance criteriaMilestone
- Small-change allowance
- A monthly budget of hours written into an SOW for minor requests, for example up to eight hours, after which items are batched into a change order. It gives clients flexibility and the team a ceiling.
- Related:Quick favorChange order
- Stakeholder map
- A list of everyone on the client side who can influence or veto the work, with their role in reviews. Mapping stakeholders at kickoff prevents late reviewers from triggering extra revision rounds.
- Related:Named approverRACI matrix
- Statement of work(SOW)
- The project-level document defining deliverables, exclusions, assumptions, timeline, price and acceptance criteria, usually issued under an MSA. The SOW is the reference every scope conversation comes back to.
- Related:Master services agreementExclusion clauseAssumption log
T
- Technical spike
- A short, timeboxed investigation to answer a specific technical question, such as whether an API can support a feature. Spikes should be scoped separately so their findings do not quietly become production code.
- Related:Discovery sprintTimebox
- Time and materials(T&M)
- A commercial model where the client pays for hours worked at agreed rates, plus expenses. It suits discovery and open-ended work; new requests still displace planned work and should be prioritized visibly.
- Related:Capped time and materialsFixed fee
- Timebox
- A fixed period allocated to an activity, after which work stops and results are reviewed regardless of completeness. Timeboxes keep research, workshops and spikes from expanding to fill available budget.
- Related:Discovery sprintTechnical spike
U
- Unbilled WIP(Unbilled work in progress)
- The value of work performed that has not yet been invoiced. On fixed-fee projects, unbilled WIP from out-of-scope work often never becomes billable unless a change order is raised promptly.
- Related:Write-offRealization rate
- Utilization rate
- Hours spent on client work divided by total available hours. Utilization measures how busy a team is, not whether that time was paid for, which is why it should always be read beside realization.
- Related:Billable utilizationRealization rate
V
- Value-based pricing
- Pricing work according to the value it creates for the client rather than the hours it takes. It still requires clear deliverables and exclusions, because value promises without boundaries invite unlimited scope.
- Related:Fixed feeStatement of work
W
- Warranty period(Hypercare)
- A defined window after launch, often 30 days, during which the agency fixes defects at no cost. Defining it precisely stops post-launch enhancements from being presented as bug fixes.
- Related:Definition of doneOut of scope
- Work breakdown structure(WBS)
- A hierarchical decomposition of a project into deliverables and work packages. A WBS attached to the SOW makes it easy to show which package a new request does or does not belong to.
- Related:DeliverableStatement of work
- Write-down
- Reducing the billed value of hours already worked, typically on time-and-materials invoices. Write-downs are visible; the fixed-fee equivalent, unpriced scope, is not, which is why it often goes unmeasured.
- Related:Write-offRealization rate
- Write-off
- Removing unbilled work or an unpaid invoice from the books entirely. Agencies that write off out-of-scope work at project close have usually missed the moment when a change order was still possible.
- Related:Write-downUnbilled WIP
Definitions are easy. Applying them on a live project is the hard part.
TWINJAM turns your SOW's deliverables, exclusions and assumptions into boundary rules, then flags divergence in Slack, Jira and GitHub as it happens.
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