Standardizing Work Breakdown Structures (WBS)
This article explains the benefits of a standardized Work Breakdown Structure (WBS) and discusses some items which should be included in the WBS.
Standardizing Work Breakdown Structures
As PMO managers we have seen many variations of Work Breakdown Structures (WBS). At one extreme, project managers create their WBS at two or three levels with loosely defined work packages including only a title and an estimate of the number of hours. At the other extreme, project managers create their WBS with levels taller than the empire state building, WBS Dictionaries which go into almost infinite detail, and work packages of just a few hours each. While these extremes may not be necessary, the WBS should be created with enough detail to serve as a useful tool in managing the project’s tasks.
A Work Breakdown Structure (WBS) is a valuable tool for organizing a project by breaking it down into more manageable component parts based on the deliverables required to complete the project. It is the accepted project management document for tying the project scope, cost, and schedule together. There are many ways to configure the WBS, but within an organization, it is important to standardize the way it is formatted across the entire portfolio of projects. Just as with processes, tools, and methodologies, standardizing the WBS format is an important part of providing repeatability and consistency.
A standard WBS provides several benefits for an organization. First, it allows cost and schedule reporting in a consistent manner and standard format across its entire portfolio of projects. This ability also allows any level of management to obtain cost and schedule data at whatever level pertains to their needs from the lowest level work packages up to the entire project cost. Another benefit of a standard WBS is that since cost and schedule reporting are consistent, the organization can develop a database to consolidate this data in order to determine where variances occur between functional areas and projects over a period of time. This will provide important insight to how improvements can be made to future project costs and schedules. As the database grows and evolves, it will also provide an accurate capability for estimating costs and schedules associated with future projects as well as adjusting work package sizes.
In addition to the benefits of a standardized WBS, the importance of a WBS Dictionary cannot be overstated. While the WBS defines the project scope, costs, and schedule, the WBS Dictionary lists and defines the actual work that is required to satisfy each WBS element. These work definitions are particularly important to keep costs segregated and within the appropriate element. If work is not defined thoroughly enough through a WBS Dictionary then there is a chance that work performed will be charged to the wrong WBS elements and accounts. If this occurs then the purpose of the standardized WBS is defeated because reporting will be flawed and inaccurate.
Within every WBS there are several items which should be standardized. First, the top level of the WBS should be clearly defined as the end-state of the project. It should also be easily sub-dividable into components which will then be broken down further into deliverable tasks and work packages. This top level should always be pre-defined and follow the Project Management Body of Knowledge (PMBOK) processes. The next item of the WBS which should be standardized is the work package size. Work packages are the lowest level elements of the WBS where work can be cost-estimated, scheduled, monitored, and controlled. By standardizing work package sizes—4 to 40 hours or 8 to 80 hours—the WBS will provide uniformity across all of its deliverables. This standard provides a safeguard by ensuring that if the estimated work on a task cannot be completed in the standard work package time—for instance exceeding 40 hours of work in a 4 to 40 work package size—then the task must be further subdivided into a more manageable size. Finally, the WBS Dictionary should be standardized. The dictionary should be such that it acts as a mini-statement of work (SOW) and provides enough detail to clarify work necessary to accomplish the task and appropriate account information to charge the work to.
While a standard WBS provides other benefits to the organization, like the ability to compare earned value performance across its project portfolio, it is only effective when it contains all of the deliverables associated with the project. The work in each element of the WBS must also be clearly defined in the WBS Dictionary so associated costs and schedules can be accounted for accurately. Once this is done, the WBS is an effective tool for any organization in providing visibility of the scope, cost, and schedule of its projects at any level.