Work Breakdown Structure in Project Management

Abstract

This paper explores the importance of the work breakdown structure (WBS) in project planning to help identify tasks, define them, and logically connect them to project objectives. The literature provides a background of WBS use in numerous styles of projects and industries. WBSs are developed by decomposing project activities and aligning them with a statement of work or proposal. Work packages offer the lowest level tasks that can be used to estimate cost and establish cost buffers. WBSs are a comprehensive tool representing the project scope, budget, schedule, progress, and control of a project.

Keywords: work breakdown structure, work package, proposal, contract work breakdown structure, statement of work, cost estimation, cost Buffer, Resource Breakdown Structure (RBS),

Word Breakdown Structure in Project Management

A work break down structure (WBS) is a tool used in project management that provides a basis for the structure and flow of the project. It organizes project objectives and coordinates activities. The WBS should furnish the project team with an overview of the project by defining its objectives and logically connecting the amount of work, time, and cost estimated for project activities. WBS’s are a comprehensive tool which enhance communication and create accountability. They are a known planning resource for construction projects. They have been implemented in the sales industry and can even be used to plan other activities such as online courses or preparing for a certification exam. In the following paper, the WBS will be discussed and its important features linked to different industries, alternative uses, cost estimation and buffers, and during the proposal and planning phases of project preparation.

Work Package

Project scope is represented within the WBS. A work package (WP) is defined as the lowest level of WBS for which cost, and duration can be estimated and managed (Globerson, Cohen, & Vardi, 2017). Many organizations use templates in project planning with a recommended number of tasks based on the complexity and size of a project. Templates act as guidelines for project planning, execution, and control of each WP (Globerson et al., 2017). The decomposition of a project into increasing WPs can create an unnecessary workload if the project manager does not properly consider scheduling demands and other requirements. The end result of a WBS and its WPs should be easily understood deliverables with cost calculations. An experienced project manager understands when the decomposition of the project has been simplified enough so that it does not over complicate the projects objectives. In this form, the project fits an organizational unit responsibility and has a clear deliverable that can be transferred to the sponsor. It has a reliable estimation of duration, aligns with resolution and risk management plans, can be priced easily, and meets organizational guidelines (Globerson et al., 2017)

Word Breakdown Structure

Milestones are specific points in a project’s timeline that define start and stop points. They typically indicate completion of phases and provide information on the progress of the project. Standard practice only incorporates milestones which reflect major events or deliverables. If there are too many milestones it will cause delays.

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 In a case study from GAO Report (2015), the program management office for the Defense Enterprise Accounting and Management Systems department created unnecessary risk when planning government activities by maintaining internal schedules for government-only activities. Contractor activities were not linked to internal government activities. When planning a project, a best practice will interrelate activities so that deficiencies between internal and external work are eliminated. If a schedule doesn’t contain all activities, this will lead to uncertainty about the order and resources needed to complete tasks (GAO Reports, 2015).

  All of the details of the WBS must be at a level that easily manages the size, complexity, and risk associated with the project. A well planned WBS displays all of the lowest-level deliverables. The scheduled tasks are easily identified, tracked, and become a framework for accountability (GAO Reports, 2015). All of its elements should logically relate to one another and direct the project.

Resource Breakdown Structures

 Project managers work with SMEs to develop a WBS. It should be as accurate as possible to aid in the planning and budgeting of a program. In the early stages of planning a resource breakdown structure (RBS) can be introduced. The RBS is to resources as the WBS is to deliverables. Resources are the aspects of a project that can be associated to cost; people, machinery, tools, licenses, etc. (Rad & Cioffi, 2004). Scope changes that occur are easier to address and the RBS provides data to clearly justify and defend those changes. Cost estimation becomes a simple process of mapping the WBS onto the RBS. Producing a RBS requires additional time and work, but in the long-run it will benefit project managers reducing stress surrounding resource details and promote efficiency (Rad et al., 2004).

Work Breakdown Structure in Sales

In a case study, Powell (2008), describes the success in using a WBS during the proposal phase for consultation services. The bid was for a US Navy engagement of approximately $500,000. Powell prepared a proposal using a WBS detailing project solutions from his consulting services. The customer was impressed with the effort and detail Powell put into the proposal and felt his focus and attention to detail on the customer was an excellent approach. The customer was able to take away valuable information from those details: 1) The need for the thought-leader to come in and become acclimated due to the complex nature of the project and the learning-curve period that could not be ignored, 2) A fundamental need for gap analysis across the customer’s different areas of responsibility. Powell states, it’s hard to say whether the sale would have moved as quickly as it did without the hard work and preparation of the WBS for the engagement (Powell, 2008).

When implementing a WBS in the interview or proposal phase of a sales project, it’s important to work collaboratively with the customer. A proposal WBS lays the groundwork for success and can also be used as means for improvement early on in the sales cycle versus the post hoc analysis of the project and services. When not used, the seller fails to capitalize on numerous advantages. Management benefits from the WBS by defining the outline as opposed to poorly prepared “to do” lists. It also improves solution customization while increasing confidence of solution realization. The WBS becomes an effective tool to engage the sales staff and spark their creative thinking identifying the needs of the customer and increasing the odds of a sale (Powell, 2008). The use of a proposal WBS leads to less collaboration time and a more tailored approached reducing the length of the sales cycle (Powell, 2008).

Contract Work Breakdown Structure & Statement of Work

In relation to the proposal WBS, project managers are experiencing the necessity to be certified or possess skills which meet the level of a project. They are expected to be business-savvy individuals in order to understand and maneuver the social environment surrounding a project (Hunter, 2007). Another example of successful project management is aligning the contract work breakdown structure (CWBS) with the statement of work (SOW). Hunter (2007) states, that CWBS and SOW are normally out of alignment. Some factors that influence project failure are poor communication and/or unreasonable or misguided stakeholder expectations.

When the project CWBS/SOW are misaligned at the start it causes unnecessary stress and frustration resulting in work moving out of scope contributing to overruns. The WBS should be a foundation for the SOW and other planning documents. Integrating key documents (Integrated Master Plan or Schedule), the work package, and the organizational breakdown structure creates control and accountability and input for measurable outcomes (Hunter, 2007). Project managers whose efforts are applied to the alignment of a CWBS and SOW establish a more reliable and predictable environment for earned value management (EVM) and project performance.

Cost Buffers

Completing a project on time and within the parameters of the contract are important successes to achieve. It is equally as important to remain within the anticipated budget. Cost overrun is a common issue typically related to non-realistic or over-optimistic cost planning (Polonski, 2015). Complex construction projects such as building facilities increase the need for schedule clarity using multi-level WBSs.

The scope of responsibility can be narrowed and appropriately delegated activities covered by a summary task. Then costs can be assigned to cover the summary task group with one cost buffer. The range of each cost buffer is distinguished at the lowest WBS level and at the same time, each task at this level is protected by one cost buffer. This sets up a financial management plan where the financial reserve increases gradually but does not affect the unused reserve covered by each summary task. The buffers linked to particular tasks allows for better identification of the location of cost overruns; determining their causes and similar mistakes in the future. WBS’s are the key to delegating cost estimates and creating buffers at the summary task level (Polonski, 2015).

Cost Estimation

Work breakdown structures are imperative to the success of a project, but they too have limitations. It requires experience and a considerable amount of effort and time to create a quality WBS that is accurate, complete, and logical (He, 2014). WBS’s must be continually up-to-date and reflect any changes that occur during the progress of the project. This helps avoid overestimation and underestimation (He, 2014). Cost estimation can be applied to numerous types of projects. As an example, He (2014), describes the process of planning and estimating online course development. The cost associated with online course development is related to such factors as selected technologies, instructional design, project management, quality assurance, interaction models, course materials and equipment, type of training, experience, and the skill levels of staff (He, 2014). A WBS works by dividing the project into smaller more manageable components. The development of a WBS is designed from the top to the lowest level task. The decomposition process delineates tasks into logical grouping allowing for the task to be scheduled, its cost estimated, and progress monitored and controlled (Siam-Iredemoosa, Dindarloo, & Sharifzadeh, 2015).

Alternative Work Breakdown Structures Use

Research and years of construction projects have provided valuable resources for WBS development. WBS’s can be used in any number of projects; home improvements, planning vacations, or personal projects. They are used across many industries to organize and improve project planning and execution. Kristner (2016), introduces the use of a WBS for preparing to study for certification exams. The addition of project management tools such as a WBS can be advantageous to individuals who find organization difficult. When there is an overwhelming amount of information you must categorize, reference, and prioritize a WBS helps you focus your study efforts. By using a prioritization matrix and Bloom’s Taxonomy an individual can find areas of strengths and weaknesses based on your knowledge level. Topics requiring more cognitive levels warrant more in-depth preparation (Kristner, 2016). Once you have identified the level of work for each topic, you can build your reference materials and develop a WBS dictionary or reference index to efficiently locate materials during the exam. Kristner (2016), describes this process an exercise in professional development that strengthens your knowledge of unfamiliar body of knowledge topics.

Conclusion

 The application of work breakdown structures in project management provides an overview of the project’s objectives creating a logical structure and flow for project execution. WBSs connect the amount of time needed to accomplish tasks and the associated cost necessary to complete a project within scope. WBSs enhance cost estimation processes as well as communication for project teams. Work packages (WP) are the lowest level of WBSs for which cost, and duration can be estimated and managed. The decomposed tasks are easily identified, tracked, and become a framework for accountability. Resource breakdown structures can also be utilized in tandem with WBSs to providing data to clearly justify and defend scope change. WBS use in proposal phases increase the odds of a sale for sales oriented industries. It can also be beneficial to project managers, management, and team members when implemented early in planning phase aligning the contract statement of work with the WBS. Cost buffers linked to particular tasks allows for better identification of the location of cost overrun and its causes reducing similar mistakes in the future. WBS have been shown to be effective tools in sales, building online courses, and even preparing for an exam. WBSs are a key element to project planning and success in various degrees of project complexity.

References

• Capturing All Activities. (2015). GAO Reports, 11. Retrieved from http://search-ebscohost-com.
• Globerson, S., Cohen, I., & Vardi, S. (2016). Identifying the Criteria Used for ESTABLISHING WORK PACKAGE SIZE FOR PROJECT WBS. Journal of Modern Project Management, 4(1), 64-69.
• He, W. (2014). A framework of combining case-based reasoning with a work breakdown structure for estimating cost of online course production practices. British Journal of Educational Technology, 45(4), 595-605.
• Hunter, K.A. (2007). Leveraging the Relationship Between the Federal IT Project’s Contract Work Breakdown Structure (CWBS) and the Contract’s Statement of Work (SOW). AACE International Transactions, 10.1-10.6.
• Kistner, K. (2016). A Quick Study. (Cover story). Quality Progress, 49(7), 16-20.
• Polonski, M. (2015). Application of the Work Breakdown Structure in Determining Cost Buffers in Construction Schedules. Archives of Civil Engineering (De Gruyter Open), 61(1), 147-161.
• Powell, J.W. (2008). USING the WORK BREAKDOWN STRUCTURE to IMPROVE SALES. Contract Management, 48(8), 50-55.
• Rad, P.F., & Cioffi, D.F. (2004). Work and Resource Breakdown Structures for Formalized Bottom-up Estimating. Cost Engineering, 46(2), 31-37.
• Siami-Irdemoosa, E., Dindarloo, S.R., & Sharifzadeh, M. (2015). Work breakdown structure (WBS) development for underground construction. Automation in Construction, 58, 85-94.