How to Approach WBS - Flemiopmi.flemio.com/Portals/1/files/presentations/PMI...

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How to Approach WBS

Daniel Podolský, Project Management Institute Slovakia

April 28, 2016

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Lecture content

• Standard definition

• Importance of WBS

• Advantages of WBS

• Misconceptions

• Options in approach

• Key questions

• How to create a WBS

• How to increase its value

• Linking WBS to other tools

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Standard WBS definition

• 1962: Used by the U.S. Department of Defense to see what needs to be

done – not focused on the time line

• PMBOK: A hierarchical decomposition of the total scope of work to be

carried out by the project team to accomplish the project objectives and

create the required deliverables.

• NASA: A product-oriented hierarchical division of work tasks that

organizes, displays, and defines the products to be developed and/or

produced and relates the elements of the work to be accomplished to

each other and the end product(s).

• My simple definition: the heart of the project.

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Importance of WBS

• Most issues with the customer and stakeholders are related to

scope

• In 50% of the projects, stakeholder simply fail to reach an

agreement over the project

• Scope changes and creeping scope are among the top reasons for

the project failure

• Good defined requirements and project boundaries make out 80%

of the project success

• WBS is an incredible tool that enables a PM to set and manage

expectations well and thus to make a difference in a project

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Advantages of WBS I

• Graphical representation of the project scope - a picture is worth 1000 words

• Clear understanding of the scope – what is not in WBS is outside the project.

• Significantly increases the chances of success and facilitates further steps –

planning, estimating, execution, communication

• Helps avoid uncovered areas and uncontrolled changes

• Helps understanding the work in early stages and discover the areas with

limited understanding

• Delivers what is expected and agreed on

• Visualizes internal and external work, visualizes PM work

• Sets the project boundaries and demonstrate the project complexity

• Provides a baseline for control purposes

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Advantages of WBS II

• Starting point for delegation - assigning and explaining the work

• Starting point for identification, definition and planning of project

activities

• Minimizing the need for re-designing and re-planning,

• Good foundation for procurement and contracts

• Great foundation for communication (easy tracking and reporting)

• Team synergy and stakeholders cohesion (common understanding

of the project and of the work, gain buy-in and confidence)

• Formalizes knowhow, improve other projects and compare within

the industry

• Integrates the scope with time and cost – project triangle

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What if you do not use WBS?

• You spend more time planning and re-planning, because you will discover

missed pieces of work, altering baselines, difficulties controlling changes

• The quality of plan and estimations will be poor

• Harder to manage stakeholders and their expectations – especially true in

complex, multinational environment – no common vocabulary and no

common view

• Budget and time overruns

• Harder to defend the project scope

• Unclear who is accountable for different pieces of work

• Unclear whether activities lead to the desired result

You cannot create a schedule or contracts without understanding the scope.

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WBS Structure

LEVEL 1

LEVEL 2

LEVEL 3

LEVEL 4

1. IT system

1.1 Requirements 1.2 Software 1.3 Hardware

1.2.1 Specification

1.2.2 Analysis

1.2.3 Development

1.2.4 Testing

1.2.5 Acceptance

1.2.4.1 FAT

1.2.4.2 UAT

Manager X

1.3.1 Server 1

Manager Y

1.3.2 Server 2

Decomposition

to expand the

hierarchical tree

representation

WBS

IDComponent

name

Root node (goal)PARENT Component

for Hardware

CHILD Component

for Hardware

Work packages &

planning packages

Attributes

(responsible

& costs)Control

account

Branch

decomposed

to various

levels

€5000

€8000

Element

(component

with

attributes)

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Key questions about WBS

• WBS orientation (by deliveries, by phases, by subprojects, by

organizations units, mixed)

• Numbering system (levels, components ID)

• How to select components and elements

• Level of effort vs. discrete components

• When to stop decomposition

• Work package vs. activities

• How many components and WPs

• How to grant 100% rule (all work, all deliverables, for all

stakeholders)

• How to use control accounts?

• Do I need a WBS template, WBS dictionary and WP description?

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Misconceptions

• Until 1996, WBS used to be task oriented according PMBOK -

Today´s definition: Not what to do but what must be delivered

• WBS does not include tasks and dependencies nor sequencing

• WBS is not the schedule

• WBS is not an organization breakdown structure nor resource

breakdown structure, nor object breakdown structure

• Product scope vs. project scope

• Project management processes vs. content (engineering)

process

WBS: A hierarchical decomposition of the total scope of work to be carried out by

the project team to accomplish the project objectives and create the required

deliverables.

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Initiating Planning Executing Monitoring & Controlling Closing

Project Scope Management (PMI)

Plan scope management

Collect requirements

Define scope in detail

Create WBS

Validate scope

Control scope

Project Scope Baseline =

scope statement (product scope,

deliverables, user acceptance

criteria)+WBS+WBS dictionary

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Project scope vs. product scope

Project scope

(work)

Project management plan

(project manager)

Product scope

(features & functions)

Product requirements

(product manager or

business analyst)

Both must be properly integrated!

measured against

measured against

Product scope is outside the PM competence!

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When to create the scope definition

InitiationInitial

scope definition

PlanningFinal

scope definition

Do not wait till the beginning of planning to start creating the WBS.

Start as soon as possible!

Progressively refine it until you create the baseline.

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Processes in project life cycle

PROJECT MANAGEMENT PROCESS (PMI methodology)

VALUE ENGINEERING PROCESS (general)

PR

OJE

CT

STA

RT

Initiating

processes

Planning

processes

Executing

processes

Monitoring &

controlling processes

Closing

processes

MA

NA

GE

ME

NT

CO

NT

EN

T

PR

OJE

CT

EN

DProcesses are repeatable

during life cycle if needed

Initiation Conception Realization Implementation

Business

requirements

Functional

SpecificationDIT FAT UATDesign

Rollout &

HandoverCoding

VALUE ENGINEERING PROCESS (industry specific)

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Processes in project life cycle

PROJECT MANAGEMENT PROCESS (IPMA methodology)

VALUE ENGINEERING PROCESS (general)

PR

OJE

CT

STA

RT

MA

NA

GE

ME

NT

CO

NT

EN

T

PR

OJE

CT

EN

D


Business

requirements

Functional

SpecificationDIT FAT UATDesign

Rollout &

HandoverCoding

VALUE ENGINEERING PROCESS (industry specific)

Marketing

Project controlling

Project steering

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WBS Structure – basic structure

LEVEL 1

LEVEL 2

LEVEL 3

IT system

Project

ManagementInitiation Conception Realization Implementation

Initiating

Planning

Executing

Marketing

Monitoring &

Controlling

Closing

Major decision points (phase gates)

Performance Measurement Baseline - time-phased budget plan

against which performance is measured formed by the budgets

assigned to scheduled control accounts plus indirect budgets

PM work

(Level

of effort)

Project team members (experts) work

(discrete components)

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Decomposition process

1. Identify and analyze the project

deliverables

2. Structure and organize the WBS

3. Decompose the upper levels

into the lower level detailed

components

4. Develop and assign WBS ID to

each component

5. Verify that the degree of

decomposition is sufficient

How to approach WBS

Identify

deliverables

Identify each

work package

Verify

Subdivide

Can you

estimate

time and

cost?

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How to fill out WBS?

• Use the project charter and the business case

• Look for the project goals

• Think about the project phases - insist that project phases be

defined in the project charter

• Generate project deliverables based on project goals – insist

that the project charter have project deliverables defined,

because the output counts with each stakeholder

• Use company/industry specific product related methodologies

• Use WBS from similar projects

• If not available, use object breakdown structure

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Content of the project charter at VšZP

01. Číslo projektu 11. Ukončovacia udalosť

02. Názov projektu 12. Ciele projektu

03. Skratka projektu 13. Očakávané výstupy

04. Kategória 14. Projekt nerieši

05. Popis projektu 15. Fázy projektu

06. Vlastník projektu 16. Faktory ovplyvňujúce projekt

07. Projektový manažér 17. Riziká

08. Používatelia 18. Rozpočet projektu

09. Začiatok projektu 19. Riadiaci výbor

10. Koniec projektu 20. Projektový tím

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Object Breakdown Structure – Project IT system

(project objects through brainstorming)

IT system

Requirements

Development

Testing

Acceptance

Documentation

Implementation

Business R.

Technical R.

Functional R.

Modeling

Designing

Coding

Prototyping

Unit

tests

Development

tests

FAT

UAT

Performance

Acceptance

CriteriaAcceptance

protocol

Rollout Hardware

Training

Handover

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Possible objects in different industries

• IT: Design, Development, Systems Integration, Testing,

Installation

• Marketing: Market research, Product design, Product

development, Production planning, Marketing

• Construction: Regulation impact analysis, Feasibility study,

Procurement, Public tender, Construction, Approvals

How to approach WBS

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WBS Structure – Major deliverables

LEVEL 1

LEVEL 2

LEVEL 3

IT system

Project


Initiating

Planning

Executing

Marketing

Monitoring

&

Controlling

Closing

Requirements Prototype Acceptance

protocol Handover

Business R.

Functional R.

Technical R.

Unit test

DIT

FAT

UAT

PERF

Hardware Acquisition

Installation

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WBS Structure – High level milestones

Presentation Title

LEVEL 1

LEVEL 2

LEVEL 3

IT system

Project


Initiating

Planning

Executing

Marketing

Monitoring

&

Controlling

Closing


protocol Handover

Business R.

Functional R.

Technical R.

Unit test

DIT

FAT

UAT

PERF

Requirements

approved

Protocol

signed

Prototype

accepted

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WBS Structure – Tips for further

decomposition and refinement

• Balance and cost effective

• Ideally 4 to 7 phases

• Stopping decomposition when able to manage, one reporting period, assignable, can

be estimated, able to control and monitor

• At least 3 levels, 6 to 8 for large projects

• Use iterations, incrementation, or rolling wave planning, if missing information

• 20 to 40 WPs for management (3 levels, 1 page display) and contracts

• As many as 50 000 WPs for a nuclear power plant project

• 250 WPs per year - good number, WP duration – less than a reporting period

• Naming – use no verbs

• Milestones – use passive voice

A properly developed WBS sets limits = upper boundaries and shows the nature

and complexity of a project, is useful, easy to understand, and complete.

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WBS Structure combined with organizational breakdown structure

LEVEL 1

LEVEL 2

IT system

Project



protocol Handover

Business R.

Functional R.

Technical R.

Unit test

DIT

FAT

UAT

PERF


Installation

PM

LEVEL 3

PT

3P

T2

PT

1

Organizational

breakdown

structure

Control account

(documented

scope of technical,

cost, and schedule

objectives

responsible

(RAM)

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WBS Structure – Subcontracting

LEVEL 1

LEVEL 2

LEVEL 3

IT system

Project


Initiating

Planning

Executing

Marketing

Monitoring

&

Controlling

Closing


protocol Handover

Business R.

Functional R.

Technical R.

Unit test

DIT

FAT

UAT

PERF

Requirements

approved

Protocol

signed

Prototype

accepted

WP1

WP2

WP3

WP4

Outsourced

via contract

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WBS Structure – Overall responsibility issue

LEVEL 1

LEVEL 2

LEVEL 3

IT system

Project


Initiating

Planning

Executing

Marketing

Monitoring

&

Controlling

Closing


protocol Handover

Business R.

Functional R.

Technical R.

Unit test

DIT

FAT

UAT

PERF

Requirements

approved

Protocol

signed

Prototype

accepted

WP1

WP2

WP3

WP4

Outsourced

via contract

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Project life cycleC

onsum

ption

of

resourc

es

Lapse of time


Project

impulseProject

charter

Project

planProduct

acceptanceProject

acceptance

Demand on

management

Demand on

resources

Finalize

scope

Validate

scope

Control

scopeDefine

scope

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Reporting based o WBS

LEVEL 1

LEVEL 2

IT system

Project



protocol Handover

Business R.

Functional R.

Technical R.

Unit test

Dev. test

FAT

UAT

PERF


Installation

PM

LEVEL 3

PT

3P

T2

PT

1

Organizational

breakdown

structure

Control account

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Upon completing WBS

Presentation Title

Plan scope management

Collect requirements

Define scope in detail

Create WBS

Document project scope

Validate scope

PROJECT SCOPE MANAGEMENT

Develop project

management plan

Define activities

Estimate costs

Determine budget

Identify risks

Perform a qualitative risk

analysis

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WBS core quality characteristics

• Delivery oriented - WBS represents work, scope, deliverables, outcomes

and results

• Defines the project scope in a hierarchical way with a coding system,

capturing all deliverables including project management

• Clarifies and communicates the work to all stakeholders

• Contains 100% of the work, each sublevel contains 100% of the parent

level

• WPs enable the identification of activities needed to deliver the WP

• Components are named using adjectives and nouns, milestones use

passive voice

• Created by those performing the work and accepting deliverables

• Elaborated until baselined and updated via change control process

How to approach WBS

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Soft effects of creating WBS (WBS affects the project results both directly and indirectly)

• Complexity and uniqueness affect the project planning and the operational capabilities

of the organization (the more complex and unique, the more difficult)

• Iterative approach is in disadvantage as compared to the line – it must create bonds

and rules first to operate and is often vague, uncertain, and highly dynamic

• Pluralism in views supports the innovation well but has troubles with formulating and

achieving results – WBS serves as the basis for action – because centralization (and

not pluralism) increases the ability to operate, since it creates a similar bonds like in

the line

• Creating WBS (as opposed to chaos) institutes routines for interaction and supports

sequential flexibility what has a positive impact on the ability to make decisions

• Planning decisions with limited set of arguments affects positively the performance

• Risk inclusion into WBS also supports sequential decision making (risk spreading

through allocation threatens results – no one feels fully responsible)

• Knowledge gained in WBS creating process fuels the ability to add value to the project

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Theoretical model

Ability to respond

(indirect impact)

organic

mechanical

Project

planning

(WBS)

Project context

Operations and

processes

Unexpected

events

Pro

jec

t p

erf

orm

an

ce

Standard project planning

(direct impact)

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