Work Breakdown Structure (WBS)

Work Breakdown Structure (WBS) is a tool used in project management context that divide in different levels of details a deliverable-oriented project in hierarchical order. The primary objective is to support the project manager by giving an overview of different steps, resources and costs involved in the project. Moreover during the project executions may include the percentage of steps completed this ensure better control and guidance in case during the project development may occur any changes. It is graphically represented by a hierarchical tree, where the job of each element is given by the sum of elements underneath connected (sublevels). These elements may represent a product, data, service or any combination thereof.

History

The WBS was initially developed by the U.S. defense, back to the 1950’s and 60’s, in cooperation with NASA they were adopting the Program Evaluation and Review Technique (PERT) . During 1962, United State Airforce released “STUDY OF METHODS FOR EVALUATION OF THE PERT/COST MANAGEMENT SYSTEM” in this document was mention WBS as a useful tool for Controlling and planning large acquisition projects . As understandable, most of NASA projects involves many actors (contractors) with totally different tasks. However, all of them are parts of the same project and works for the same final scope. The WBS was used to ‘‘ . . . ensure that the total project is fully planned and that all derivative plans contribute directly to the desired objectives’’ (NASA, 1962). After, this first approach NASA decide to keep update this document because believed valid and useful. In 1968, due to its success, the Department of Defense released "Work Breakdown Structures for Defense Materiel Items" (MIL-STD-881), a military standard procedure which is obligatory for all programs under the Department of Defense. This standard is constantly updated, the latest version refers tp 2001 . Project Management Institute (PMI) during 1987 started to enlarge these collections of documents for non-military purpose as result The Project Management Body of Knowledge (PMBOK) has been release. The first version is from 1987, and other versions have been released during (987, 1996, 2000, 2004, 2009, 2013 . The main concept of subdividing different activities through different levels remain the same of the early years. However, the approach goes from “A task- oriented ‘family tree’ of activities 1987” PMBOKfirst Guide to “A deliverable- oriented hierarchical decomposition of the work to be executed by the project team to accomplish the project objectives and create the required deliverables” (PMBOK Guide — Third).

On one hand, the documents from PMI gives an overview of the WBS concept, on the other hand, the document released from the Department of Defense can be considered as a Handbook.

Representation

As mentioned before the aim of a WBS is to show at best the scope of the project, program or portfolio taken into consideration. There is no one exact or mandatory way of representing a WBS. Nevertheless, all of them have in common a tree structure. The most use tree structure is the one called inverted Tree Structure Picture 2, in this representation the project has the aspect of an organization chart. However there are other two types of representation the one shown In !!!!picture!!! that has the root on the left side and growth from the right side, the last one is called centralized tree structure Picture this can help the development session.

The graphical representation is not the only way of representing a WBS, tabular views are also used. This approach has the advantage to be clearer in case the WBS has many levels an example is shown in figure !!!Picture!!!. Usually at top level is shown the main deliverable that can change depending what kind of project is analyzed. Lower level provide information to the project managers like, schedule development, cost estimating, resource allocation, and risk assessment. The lowest level also called Work Packages. It is defined by PMI as:” A deliverable or project work component at the lowest level of the Work Breakdown Structure. The work package includes the schedule activities and schedule milestones required to complete the work package deliverable or project work component’.It is a good habit as suggest NASA of not having more than seven levels. Each element of a WBS is recognizable by a clear, descriptive title and by a numbering scheme

Depending on the level the management might assign responsibility for technical, schedule, and cost performance. A Control Account is usually established to guaranty at best he intersection between of WBS element and organization unit.

100% Rule

One of the most important principles for developing a WBS is called 100% rule. This rule is define from Project Management Institute (PMI).

This 100% rule define that a WBS must Include the 100% of the work defined from the project and include all the necessary for its realization (Internal, contractor, subcontractor) included the management of the project itself. The 100% rule is one of the most important guideline for developing the decomposition and evaluation of a WBS. The rule is applied at all levels of the hierarchical structure : ‘the next level of decomposition of a WBS element (child level) must represent 100 percent of the work applicable to the next higher (parent) element’’ (Haugan p. 17).. The WBS can not include jobs out of the project’s border, meaning that should not include more of the 100%.

Applying the 100% Rule allows the manager to know that all efforts in each area are captured where they belong and also that nothing unrelated is included in an element. Application of the 100% Rule enables all outcomes to be defined before schedule planning begins. The work breakdown structure is the initiator in the planning process, as planned outcomes must be defined before methods and schedules can be considered. If outcomes are insufficiently defined, the project cannot succeed. Awareness of the 100% Rule enables and communicates the full understanding of all necessary outcomes. Once the project is underway the 100% Rule assists in assuring that project costs are properly shown in the accounting system. This is true for all projects, whether they are accomplished for another division in a company or a regular paying customer. Application of the 100% Rule enables accurate costing, which is essential to budget similar efforts in the future.

100% Rule Application

This example provides a practical use of the 100% rule and the "progressive elaboration" technique. In !!!!figure!!!!! is shown a WBS has the objective the Build of an house. At the top level (Level 1) the project manager has assign 100 point to the whole project, meaning the entire building process of the house. Breaking down to level number 2 we have more than one deliverable, by summing the point of each four elements we have the result will be 100. The point allocated in each element is the result of a project manager’s consideration, meaning that these points are not an estimation of Cost/Time, etc. but represents the overall effort needed to complete the task. Some elements (the once that needs a higher detail of decomposition) have a lower level (Level 3) that represent in this case the lowest level of this WBS. However, if is needed this breaks down process can continus until the project manager is not satisfy regarding the level of details that want to achieve. The procedure just used is calle“progressive elaboration”.

As in this example, is totally fine if have different level of decomposition through different elements

It is suggest that the project manager use a software support, as a spreadsheet, for have an auto.sum operations, this could seems a silly recommendation, but a WBS of a portfolio can have hundred of branches a spreadsheet will be very usfull. Another recommended procedure is to discuss together with the project team regarding the amount of points that belongs to each element, this collaborative practice helps to achieve an high resolution of the reality because different people with different skills are involve during this process.

Specific Type of WBS

As mention previously WBS is a tool introduced during the 60’, up to present different WBS’s related tools have been developed.

Value breakdown structure

This tool is mainly used for assessing a project’s expected value, as WBS has a hierarchical structure. There is one fundamental difference, in this tool is not used the 100% rule, this because the value is not additive as the cost. For instance, a Helicopter manufacturer wants to produce a 10-seat helicopter the budget is 1000000$, and the Expected monetary value is 1700000$. By using an hierarchical approaches we should decompose the helicopter in different parts, for each parts all the necessary process until to get these components (cockpit, landing skid, passenger seats, engine, rotor, tail rotor, blade ). Let's image that we have all the components except the engine. The cost resources until this stage could be 900000$, but the actual value of this helicopter without the engine is actual 0 because no one wants a Helicopter without the engine. Meaning that the Value added of the engine is equal or close to the entire value of the projects. On one hand, we do not have any value until the motor is not mounted on the helicopter (VBS approach), on the other hand, we have cost for the resources used until now (WBS approach).

Goals Breakdown Structure

As a WBS, the Goals Breakdown Structure (GBS) has a hierarchical tree structure, it can be considered like a WBS specially design for goal’s achievement. In the highest level is positioned the overall goal of the projects, at the lower level are located mid-term goals for needed for achieving the top level mission. The GBS elements might include different peculiarities that characterize each goal, for instance, profit, market share, etc. At the third level are defined the products/process needed for achieving the organizational goals.

As written in A Guide to the Project Management Body of Knowledge (PMBOK(R)[1] Guide) it follows rules similar to WBS. For the breakdown decomposition the WBS follows two general rules:

• Nothing Extra Is not allowed to include an element that does not contribute to the upper-level goals. No layer should contain any extraneous goals.
• Nothing Missing Each level must define all the goals necessary to ensure the project achieves the next higher-level goals.

The first rule is needed to make sure that the project is a focus in only one objective without losing resource that does not contribute any organization’s value. The second one ensure that everything that is needed for adding value to the project that takes into consideration. The general scope of a GBS is to analyze all the goals and only the goals needed to achieve the project's higher-level goals.