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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
3
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.
4
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
5
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)
15
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
Initiation Conception Realization Implementation
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
ManagementInitiation Conception Realization Implementation
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
ManagementInitiation Conception Realization Implementation
Initiating
Planning
Executing
Marketing
Monitoring
&
Controlling
Closing
Requirements Prototype Acceptance
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
ManagementInitiation Conception Realization Implementation
Requirements Prototype Acceptance
protocol Handover
Business R.
Functional R.
Technical R.
Unit test
DIT
FAT
UAT
PERF
Hardware Acquisition
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
ManagementInitiation Conception Realization Implementation
Initiating
Planning
Executing
Marketing
Monitoring
&
Controlling
Closing
Requirements Prototype Acceptance
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
ManagementInitiation Conception Realization Implementation
Initiating
Planning
Executing
Marketing
Monitoring
&
Controlling
Closing
Requirements Prototype Acceptance
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
2828
Project life cycleC
onsum
ption
of
resourc
es
Lapse of time
Initiation Conception Realization Implementation
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
ManagementInitiation Conception Realization Implementation
Requirements Prototype Acceptance
protocol Handover
Business R.
Functional R.
Technical R.
Unit test
Dev. test
FAT
UAT
PERF
Hardware Acquisition
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)