A preliminary project work breakdown structure (WBS) will provide you with a structure that defines how the job will be done – a way to organize the work elements and to ensure that all the necessary activities have been considered.
By developing an initial version of this before contract award, you will be prepared to start on day one. Not all projects, for instance level of effort labor contracts, require a WBS.
Development of the final WBS should be a team activity to build consensus and understanding of the scope and work plan necessary to complete the project. A WBS should decompose the project deliverables to successively lower levels of detail but no further than necessary to assist with the management of the project.
Some of your company projects require earned value management (EVM). In these cases, you will need to factor these discrete work packages when developing the WBS. There are tools like Dekker Tracker that can be used to set-up and track earned value management status.
There are several approaches to define a WBS – for instance, by deliverable, process (function) or by activity. Regardless, it should clearly identify necessary tasks and should be used to develop schedules, cost estimates, skill sets, and project risks.
Deliverable based WBS Example:
1. Build a computer based training course
1.1 Section one
1.2 Section two
1.1.3 Accept material
1.3 Section three
Deliverable based WBS Pros:
- Maps directly to deliverable items
- Provides visibility into costs at the product level
- Easy to explain to customers
Deliverable based WBS Cons:
- Performance cost accounts spread throughout WBS
- Delivery of infrastructure (i.e., HW and SW) components or whenever low labor costs relative to material costs
Process (function) based WBS Example
1.Build a computer based training course
1.1.1 Develop plan
1.1.2 Review with the boss
1.1.3 Finalize plan
1.2.1 Identify requirements
1.2.2 Design the system
1.2.3 Develop the contents
1.2.4 Finalize the training material
1.3.1 Review with users
1.3.2 Incorporate changes
1.3.3 Release new course
Process based WBS Pros:
- Maps directly to defined your company practices/processes
- Reusable across multiple projects (i.e., needs only be defined once then tailored for each specific instance)
- Facilitates schedule planning & tracking
- Supports rapid response to customer needs
Process based WBS Cons:
- Actual product component costs not readily visible
- Requires additional customer interaction to convey benefits of approach
- Delivery of repeatable services (e.g., consulting services, integration services, etc.), configured packaged solutions (e.g., ERP system, CRM system, etc.), or whenever schedule is of paramount concern
Clearly a WBS can be created in different ways to emphasize different views of the project. For example, customers often supply their own product focused WBS. PMs may need an organizational view of the project so that he or she can understand the budgets relative to the organization and follow the cost build-up within the components of the project organization. Other WBS structures might be created to view materials and labor separately or to separate various categories of expense.
The need for different views of the work can and often does lead to the implementation of multiple WBSs. In this situation, a mapping across WBSs must be maintained. While the WBS is used to breakdown the work and budget into more easily understood pieces, it also serves as a device to communicate within the project the work to be done and the budget assigned to that work. Too many WBSs on one project can create extra work and cause confusion. For small projects, a single WBS view aligned to meet the Project Team’s needs is best.
It is sometimes easier to picture the relationship between the various work elements in a graphical representation such as the one pictured in the following figure:
How the contract cost elements are defined will depend on whether the project is a development contract or a labor based contract, how you choose to manage the various project elements, and the project progress reporting requirements.
Each work element or activity should have a measurable milestone such as a milestone completion review and, if possible, a definable output or deliverable. The start/end events should be clearly defined. The activity duration & cost should be easily estimated. Work assignments should be independent and definable.
Don’t overwork the WBS. It should be only as detailed as necessary to manage the project. Keep in mind the burden being placed on the your company support staff of dealing with too many work and cost elements. A general rule of thumb is that a task should be broken down until it is below 80 hours in order to adequately monitor and control that task.
Because it corresponds to a client desired output as opposed to the process, the deliverable (product) based WBS is the preferred Your company standard. However, this may not be possible on certain types of labor support contracts.
The following Table illustrates the design phase of a company system development project.
This is only a part of the overall WBS but illustrates the decomposition of two major tasks into subtasks. These subtasks are discrete activities that can be measured and, if required, for which earned value can also be tracked.
A preliminary project WBS provides you with a structure that defines the tasks and/or work that needs to be performed to meet project objectives. It organizes and defines the total scope of the project.
Development of the final WBS should be a team activity to build consensus and understanding of the scope and work plan necessary to complete the project.
A WBS should decompose the project activities to successively lower levels of detail but no further than necessary to assist with the management of the project. It is important to understand that this process is about defining how you will do the job not just a regurgitation of the Government’s Statement of work.
Some of your company projects require earned value management. In these cases, you will need to factor in earned value discrete work packages WBS elements. Use an earned value tracking tool to set-up and track earned value management status.
The WBS will also need to reflect whether you are planning a fixed price product, a level of effort or a defined task project. Finally, your WBS must also take into consideration quality review activities.
As illustrated in the following Figure, if an activity does not possess all five of these attributes, then decompose or consolidate it further until the answer to all the questions is yes.
How to structure your WBS will be influenced by several factors including: how the contract cost elements are defined, whether the project is a development contract or a labor based contract, how you choose to manage the various project elements, and the project progress reporting requirements.
Each work element or activity should have a measurable milestone such as review complete and, if possible, a definable output or deliverable.
The start/end events should be clearly defined. The activity duration & cost should be easily estimated. Work assignments should be independent and definable.
One final point – be certain to check all the special requirements in the RFP. For instance, many Department of Defense contracts specify Military Standard 881 that gives specific direction regarding WBS development.
– Mike Lisagor