Lecture 4 – Work Breakdown Structure

(WBS)

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 Work Breakdown Structure (WBS)

•Technique originally developed by financial specialists to track

everyplace a program or project spent money or anticipated a
need to spend money
•A control mechanism to make sure project cost estimates
didn’t forget anything
•A control mechanism to make sure they understood where all
the money went
•This mechanism has been appropriated by project engineers and
system engineers to make sure that all effort required for program
or project has been accounted for and tracked
•A great way to find out if a project is in trouble when effort
projected in area of the WBS is exceeding projections

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 What’s a WBS ?

•A simple hierarchical breakdown of the effort anticipated to

perform an effort
•Typically in a tree
•Often numeric designations are given to each block and used
as accounting codes for charging time and materials
•For us, a WBS demonstrates that we’ve thought of all the work
we’re going to need to do to accomplish a project
•A laudable goal
•The process of generating a WBS causes questions to be
asked that discover required but unanticipated effort early
enough in the process to deal with it
•Alternate design solutions that eliminate work
•Alter schedules to accommodate the work
•Seek additional resources
•Warn people of potential schedule delays
•WBS helps you avoid the “I can’t stuff 5 lbs of candy into a 4 lb
bag” problem late in a project
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 What is a WBS ?
• A Work Breakdown Structure (WBS) is a fundamental project
management technique for defining and organizing the total scope
of a project, using a hierarchical tree structure.
• The first two levels of the WBS (the root node and Level 2) define a
set of planned outcomes that collectively and exclusively represent
100% of the project scope.
• At each subsequent level, the children of a parent node collectively
and exclusively represent 100% of the scope of their parent node.
• A well-designed WBS describes planned outcomes instead of
planned actions.
• Outcomes are the desired ends of the project, and can be predicted
accurately; actions comprise the project plan and may be difficult to
predict accurately.
• A well-designed WBS makes it easy to assign any project activity to
one and only one terminal element of the WBS.

From Wikipedia
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 WBS Dictionary
• A WBS dictionary is a document that has a
paragraph or two describing the technical
content of each element of the WBS
• Because WBS element numbering and
names can be cryptic, it is a good way to
understand what is in the WBS

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 100% Rule
• One of the most important WBS design principles is called the 100%
Rule. The Practice Standard for Work Breakdown Structures
(Second Edition), published by the Project Management Institute
(PMI) defines the 100% Rule as follows:
• The 100% Rule...states that the WBS includes 100% of the work
defined by the project scope and captures all deliverables – internal,
external, interim – in terms of the work to be completed, including
project management.
• The 100% rule is one of the most important principles guiding the
development, decomposition and evaluation of the WBS.
• The rule applies at all levels within the hierarchy: the sum of the
work at the “child” level must equal 100% of the work represented
by the “parent” and the WBS should not include any work that falls
outside the actual scope of the project, that is, it cannot include
more than 100% of the work…
•

From Wikipedia 6
 100% Rule Example
Parts A and B must add
up to 100% of the work
Project of the project

Parts B.1, B.2

and B.3 must
Part A Part B
add up to all of
the work in
Part B

Part A.1 Part A.2 Part B.1 Part B.2 Part B.3

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Figure 1: WBS Construction Technique. This exemplary
WBS is from PMI's Practice Standard for Work Breakdown
Structures (2nd Edition).

From Wikipedia 8
 How to Build a WBS
• List all the anticipated work for the project
– Identify all parts to be built
• Include design, materials and manufacturing
– Include analysis, assembly, integration and
test
– Include project management, systems
engineering and indirect costs (facility costs,
utilities)
• Organize the work into bins of related work
• Place bins into a hierarchy
• Apply a numbering system
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Examples of WBS

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http://www.hyperthot.com/pm_wbs.htm
http://www.opfro.org/index.html?Components/WorkProducts/
ManagementSet/WorkBreakdownStructure/
WorkBreakdownStructure.html~Contents
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Note – Systems
Engineering at
4 different levels
Project - integrating all
of the systems of the
project
Observatory System –
integrating all of the
parts of the observatory
– instruments and
facility
Airborne Facility
Segment – integrating
all of the parts on the
aircraft
Telescope Element
- integrating the parts
of the telescope

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 Why is a WBS Important to a Systems
Engineer ?
1. The proper way to get effort budgeted in a big project
is to get it into the WBS – so if you want systems
engineering to have a budget, need to understand the
WBS
2. Systems Engineering effort may exist at many levels in
the project, examining the WBS allows you to see
where you need to insert Systems Engineering effort
3. If Systems Engineering is going to integrate a project,
it needs to know what is going on. The budgeted effort
is reflected in a WBS. The WBS is the place to see
where effort is being expended that may require
integration.
4. It is a good place to start for building technical budgets,
like weight or electrical power
5. Systems Engineers are always heavily involved in cost
estimating and scheduling and the WBS is a good tool
for both of these efforts 15
 Rules for WBS
• A WBS is not an exhaustive list of work. It is instead a
comprehensive classification of project scope.
• A WBS is not a project plan or a project schedule and it
is not a chronological listing.
– It is considered poor practice to construct a project schedule
before designing a proper WBS.
– This would be similar to scheduling the activities of home
construction before completing the house design.
– Without concentrating on planned outcomes, it is very difficult to
follow the 100% Rule at all levels of the WBS hierarchy.
• A WBS is not an organizational hierarchy.
– Some practitioners make the mistake of creating a WBS that
shadows the organizational chart.
– While it is common for responsibility to be assigned to
organizational elements, a WBS that shadows the organizational
structure is not descriptive of the project scope and is not
outcome-oriented.

From Wikipedia 16
 Rules for WBS
• Short-term memory capacity should not dictate the size and span of a WBS
tree structure.
– Some reference materials suggest that each WBS level be limited to 5-9
elements because that is a theoretical limit to short-term memory.
– Such advice is a misapplication of The Magical Number Seven, Plus or
Minus Two, because WBS elements are not random unconnected data.
– Definitive references regarding WBS construction do not contain such
advice.
– It is far more important to construct a logical grouping of planned
outcomes than to worry about the limits of short-term human memory.
• WBS updates, other than progressive elaboration of details, require formal
change control.
– This is another reason why a WBS should be outcome-oriented and not
be prescriptive of methods.
– Methods can, and do, change frequently, but changes in planned
outcomes require a higher degree of formality.
– If outcomes and actions are blended, change control may be too rigid
for actions and too informal for outcomes.
From wikipedia

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 WBS Rules
• In addition to the 100% Rule, it is important that there is
no overlap in scope definition between two elements of a
WBS.
– This ambiguity could result in duplicated work or
miscommunications about responsibility and authority.
– Likewise, such overlap is likely to cause confusion
regarding project cost accounting.
– If the WBS element names are ambiguous, a WBS
dictionary can help clarify the distinctions between
WBS elements.
– The WBS Dictionary describes each component of
the WBS with milestones, deliverables, activities,
scope, and sometimes dates, resources, costs,
quality, etc.
• From wikipedia

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 Once you have the WBS
• If you make each element a row in a spreadsheet
– Don’t forgot the non-hardware items such as software, analysis, test,
integration and project management
• And make each column the appropriate unit of time (month, year)
that you use for accounting/budgeting
• Then you can fill in each cell with your method for estimating cost
for that item for that year
– Called a Cost Estimating Relationship (CER)
– CER’s can also include the escalation due to inflation
• You can then apply time value of money equations from previous
lectures to account for effects of inflation
• Then if you sum columns, you get yearly budget
• If you sum rows, you get total estimated cost for each item in the
WBS
• Once you have a WBS, you have the elements to build a schedule
– There should be a schedule with milestones for every item in the WBS

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Any Questions ?

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