Work break down structure and planning always go hands to hands. For successful achievement of both contract and corporate goals, a plan is needed that specifies all attempts to be made assign responsibility to particularly specified organizational components and develops budgets & schedules for the achievement of the work. The program manager has the responsibility of preparing this plan with the assistance by the program team assigned in accordance directives of program management system. Before the initiation of the contractual efforts, the detailed planning is also developed in accordance with the budgeting policy of the company.
In the light of the above considerations, the project manager must develop the Work Breakdown Structure (WBS) while planning particular project. The work is structured into small components that are
- Independent, or with least interfacing with and dependence on other continuing components
- Manageable, therein particular authority and responsibility can be assigned
- Integrate able so that entire package can be viewed
- Measurable in terms of progress
The development of the Work Breakdown Structure (WBS) is the first major step in planning process after project requirements are defined. The Work Breakdown Structure (WBS) is a subdivided product-oriented family tree categorizing services, hardware and data needed to generate the end product. The Work Breakdown Structure is organized according to the manner the work will be done and highlights the manner in which project data & costs will be summarized and finally reported. Other areas that need structured data like scheduling, contact funding, configuration management, and technical performance parameters, should also be considered while preparing Work Breakdown Structure. Work Breakdown Structure is the most important component because it gives a general framework from which:-
- Entire program can be specified as summation of subdivided components
- Budgets & costs can be developed
- Planning can be done
- Cost, time & performance can be identified
- Goals can be connected to the resources of the company in a reasonable manner
- Status-reporting procedures and schedules can be developed
- Control planning & network construction can be started
- Responsibility assignments for every component can be developed
Higher profitability is provided by breaking the work down into smaller components through vehicle of Work Breakdown Structure.
Levels of Work Break Down Structure
Although there are different kinds of Work Breakdown Structure (WBS) but the most famous is the six level indented structure as shown below
Level 1 in the above figure represents total program and is comprised of a group of projects. The summation of the costs and activities linked with every project should equalize the entire program. However, every project is divided into tasks, where the sum of all tasks equalizes the sum of all projects which successively reflect the entire program. In order to obtain the ease of control, this effort of subdivision is made. Therefore program management is similar to the integration of activities, and the Work Breakdown Structure is used as common framework for such integration by the project manager who serves as integrator.
While developing & designing Work Breakdown Structure (WBS), careful consideration should be used. It can be employed to give the basis of the following
- Network Scheduling
- Responsibility Matrix
- Risk Analysis
- Coordination of objectives
- Organizational Structure
Characteristics of Different Levels of the Work Breakdown Structure
Normally customer specifies the upper three levels of Work Breakdown Structure (WBS) as the summary levels for the purpose of reporting. Contractor generates the lower levels for the purpose of in-house control. An important purpose is served by each level: The authorization & release of all work is related to Level 1, Level 2 relates with the preparation of budgets while Level 3 relates with the preparation of schedules. Following are some of characteristics related to these three levels.
- Integrated efforts are reflected by the top three levels of Work Breakdown Structure (WBS) and they should not be pertained to one particular department. Subtasks and work packages should define the effort needed by the departments or sections.
- The sum of all the components in one level should be the sum of entire work in the next lower level.
- One and only one level of effort should be assigned by the every component of work. For example only one project (or task) should include the construction of the foundation of the house, rather than two or three projects (or tasks).
- Generally at the work package level, the project is managed. In fact at any level below level one, the work package can occur.
- A description of the scope of efforts needed should be accompanied with the Work Breakdown Structure otherwise only those people who release Work Breakdown Structure will have full comprehension of what work must be achieved. The customer’s statement of work should be reproduced generally as the description for the Work Breakdown Structure (WBS).
- The permission to all the line managers for evaluation of the risks in the Work Breakdown Structure is mostly the best policy for the project manager, regardless of his technical expertise. In fact the recognized experts in the organization are the line managers.
Project manager is responsible for the management at the top three levels of the Work Breakdown Structure. Project manager also favor to give status reports at these levels to the management. The reporting to management is tried to be standardize by some companies by demanding the top three levels of the Work Breakdown Structure to be similar for each project, the only variations being in Levels 4-6. This approach has merit for companies with great deal of resemblance among projects. However for most of the companies the standardization of the top levels of the Work Breakdown Structure (WBS) is almost impossible due to the differences between the projects.
For managing Work Breakdown Structure (WBS), the work package is the critical level. However it is possible that the line managers supervise and perform the actual management of the work packages with status reporting given to the project manager at upper levels of the Work Breakdown Structure (WBS).
Work packages are natural subdivision of the cost account and make up the fundamental units used by contactor for planning, controlling & evaluation of the contract performance. A work package is merely a low-level job assignment or task. It specifies the work to be achieved by a group of cost centers or a particular performing company and provide the basis for monitoring & reporting work progress. Various names throughout the industry designate the documents that authorize and assign work to a performing organization.
Discrete tasks that have specifiable end results are identified by the work package, which is generic term employed in the criteria. Work packages are ideally less than 2- week and are 80 hours. However for large projects, this may not be possible.
It is not essential that the work package documentation include stand-alone, complete descriptions. Work package descriptions may be augmented by the supplemental documentation. However the work package supervisors and cost account managers must be allowed by the work package descriptions to comprehend and clearly differentiate one work package effort from another. It may be essential in the review of the work package documentation that the explanations should be acquired from personnel involved in the work routinely, instead of demanding the work package descriptions to be fully self-explanatory.
Characteristics of Work Package
At the work package level of Work Breakdown Structure (WBS) of the large projects, planning will be time phased. Following are the important characteristics of the work package
- At the level where work is done, work package represents units of work
- It precisely differentiates one work package from all others designated to an individual functional group
- Beginning & ending dates are clearly specified by work package that are representatives of physical achievements
- Budget is described by work package in terms of man-hours, dollars or other measurable units.
- The work to be done is limited to relatively shorter duration of time by the work package in order to minimize the effort of work-in-process
Criteria for Developing Work Breakdown Structure
For development of the Work Breakdown Structure (WBS), following is a sample listing of criteria
- The Work Breakdown Structure and work descriptions must be simple to comprehend
- All schedules must comply with the Work Breakdown Structure
- The subdivision of the work arbitrarily to the lowest possible level should not be made by any effort. The lowest level of work must not wind up including an absurd cost in comparison to other attempts
- Each effort much be made to keep flexibility in the Work Breakdown Structure, since scope of effort can change during a program
- The Work Breakdown Structure (WBS) can serve as set of tangible and distinct milestones so that all people will understand when the milestones were accomplished
- Trust can be reflected in particular line group through the level of the Work Breakdown Structure
- The recurring from nonrecurring costs are segregated with the help of Work Breakdown Structure
- The components of the Work Breakdown Structure mostly range from 0.5 to 2.5% of the entire budget of the project
Work Breakdown Structure Decomposition Problems
There is general misunderstanding that Work Breakdown Structure (WBS) decomposition is a simple activity to do. The top three levels or management levels are generally roll-up levels in the development of the Work Breakdown Structure (WBS). It is common practice to prepare templates at these levels. However these templates may not be suitable at the lower 4-6 levels of the Work Breakdown Structure (WBS). Following are some of the reasons for this fact.
- The hundreds or even thousands of cost accounts and charge numbers may required to be created when the work is broke down to extremely small and detailed work packages. The control, management and reporting costs of these small packages could be enhanced as a result of this breaking down of work to the degree where the costs exceed the benefits. It is fact that a general work package may be two weeks in duration approximately & 200-300 hours, view the affect on large projects, which may contain direct labor hours more than one million.
- Accurate cost control is can be provided by breaking down the work into small packages if and only if the line manager can ascertain the cost at this level of detail. The right should be given to the line managers to clear project manager that costs cannot be ascertained at the requested level of detail.
- For scheduling techniques like Precedence Diagramming Method and Arrow Diagramming Method, Work Breakdown Structure provides basis. The interdependencies among activities become so complicated at low levels of the Work Breakdown Structure (WBS) that reasonable networks cannot be established.
In order to deal with the above-mentioned problems, a useful way is to develop “hammock” activities which include different activities where identification of the precise cost cannot be properly ascertained.
Uses of Work Breakdown Structure
When certain Work Breakdown Structure is developed and the program started then it becomes quite expensive process for any addition or deletion of activities and altering the reporting levels because of cost control. There are various companies that do not show any caution to the significance of well developed Work Breakdown Structure (WBS) which results into the enhancement in the riskiness of the cost control problems downstream. The Work Breakdown Structure (WBS) can be best used as cost control standard for any future activities that may just be same or may follow on. It can become common mistake of the management by combining administrative activities with the direct support activities.
Mostly Work Breakdown Structure along with customer Request for Proposals (RFPs) includes increased scope of efforts as described by the statement of work than the current funding will assist. The customer performs this intentionally in expectation that the contractor may be un-coerced to “buy in”. The scope of effort must be reduced by eliminating activities from the Work Breakdown Structure if the price of contractor surpasses the customer’s funding limitations. The customer can easily amend his costs by eliminating the direct support activities of the canceled effort, by building an individual project for indirect support and administrative activities. There are various industries and companies that succeeded in managing programs without employing work breakdown structure, particularly on programs of repetitive-kind.
Preparation Guides for Work Breakdown Structure
There are many significant preparation guides for the Work Breakdown Structure, which are discussed below
- The Work Breakdown Structure (WBS) should be developed by subdividing the entire effort into logical and discrete sub components. Generally a program is subcategorized into projects, important systems, important subsystems and different lower levels until a manageable size component level is attained. Depending upon the kind of effort, huge variations may arise. If this shows the actual situation, include more than one contractor and more than one cost center.
- The proposed Work Breakdown Structure (WBS) should be checked significantly along with the contemplated efforts for compatibility, completeness and continuity.
- Ascertain that the Work Breakdown Structure fulfills both project/program and functional requirements, including nonrecurring and recurring costs.
- Ascertain that all the project work is provided with the logical subdivision by the Work Breakdown Structure.
- Develop responsibility assignments for all recognized effort to particular organizations.
- At last examine the proposed Work Breakdown Structure against the reporting needs of the companies included.
Checklists for Preparing Work Breakdown Structure
In the preparation of the Work Breakdown Structure (WBS), following are some of the important checklists that can be helpful.
- Concentrate to build preliminary Work Breakdown Structure (WBS) for the purposes of solicitation to not lower than the top three levels.
- Remember to guarantee that the preliminary Work Breakdown Structure is required to be extended by the contractor in reaction to the solicitation, to recognize and construct entire contractor work to be consistent with the management system and the company.
- The Contract Work Breakdown Structure (CWBS) mentioned in the contract must not generally widen lower than the third level, following negotiations.
- It is important to guarantee that the negotiated Contract Work Breakdown Structure (CWBS) is consistent with needs of the reporting.
- Guarantee that the negotiated Contract Work Breakdown Structure (CWBS) is consistent with the management system and company of the contractor.
- Correlation with the following should be ensured by reviewing the Contract Work Breakdown Structure (CWBS) elements. Such as Contract line items, the Specification tree, Work statement tasks, End-items of the contract, Configuration management requirements, Data items required
- Additionally The Contract Work Breakdown Components should be specified down to the level where such specifications are reasonable and important for management purposes.
- If variations from standard reporting requirements are needed, then clearly describe the reporting requirements for chosen Work Breakdown Structure components.
- Constantly guarantee that the Contract Work Breakdown Structure (CWBS) includes measurable effort, subcontracts, appointed effort and level of effort, if applicable.
- Finally guarantee that the sum of the costs of constituent components at the next lower level will be equal to the total costs at a certain higher level.
Hello everyone! This is Richard Daniels, a full-time passionate researcher & blogger. He holds a Ph.D. degree in Economics. He loves to write about economics, e-commerce, and business-related topics for students to assist them in their studies. That's the sole purpose of Business Study Notes.
Love my efforts? Don't forget to share this blog.