WORK BREAKDOWN STRUCTURE A TOOL FOR SOLVING DECISION MAKING PROBLEM IN PROJECT MANAGEMENT

Transcription

1 WORK BREAKDOWN STRUCTURE A TOOL FOR SOLVING DECISION MAKING PROBLEM IN PROJECT MANAGEMENT Jaromír Pitaš Abstract: One of the decision making tools of a project manager since the 1960s has been Work Breakdown Structure. It was standardized for the first time by the US Department of Defense for the environment of military projects. The basis of this method is a hierarchical decomposition of deliverables (products), which creates first view of the project scope. WBS is built at the start of the planning process (a phase of a life cycle of the project management planning) and further helps the project manager with decision-taking in planning processes and project monitoring. A lack of knowledge of building and using WBS while managing the project by the project manager plays often a crucial role in not attaining the project success. Keywords: Work Breakdown Structure, Project Management, Project, decision-making 1. Introduction Important milestones of the project management are represented by a creation and first usage of Critical Path Method CPM) and PERT (Performance Evaluation and Review Technique) in the 1950s. A concept of Work Breakdown Structure WBS was developed together with the method PERT in the United States Department of Defense (DoD). Both methods were developed as a decision making tool for planning processes and project monitoring. In spite of the fact that the method PERT was first used as early as 1957 by US Navy in the project of Polaris missiles, WBS was not put in usage at this first implementation. Only in 1962 DoD, in cooperation with NASA, released a document for implementation of the system PERT / COST where WBS was described [1]. Subsequently in 1968 DoD published a standard "Work Breakdown Structures for Defense materiel items" (MIL-STD-881), describing how to build WBS, its significance and application at US Army projects and programs [2]. The standard has been revised for several times by DoD while the latest one was carried out last year (MIL-STD-881C) [2]. Another milestone for WBS was established in 1987 when the Project Management Institute (PMI) in cooperation with DoD further processed and spread WBS in order to be applied in organizations out of the defense industry. First of all, PMI standardized WBS in a document Project Management Body of Knowledge (PMBOK). The document explains WBS as a term and integrates it into the project management processes. After that PMI standardized WBS in the standard itself Practice Standard for Work Breakdown Structures. Both documents were subjects to many revisions in the past years (PMBOK 4th edition, Standard for WBS 2th edition) [4;5]. 2. Contents of the term Work Breakdown Structure The interpretation of the term WBS in the Czech Republic is closely related to a quality of translations of English texts, therefore it is very difficult within Czech literature to find properly explained contents of this term. The most accurate 84

2 definition of the term in the Czech Republic is offered by Společnost pro projektové řízení, o. s. (Association for Project Management) (SPŘ) in National Standard Competences of Project Management version 3.2 that defines WBS as follows:...a hierarchical breakdown of the project goal into individual deliverables and further into individual products and subproducts to the level of individual work packages to be delivered in the course of project implementation. [3] The authors of WBS (DoD) describe WBS in the standard Work Breakdown Structures for Defense Materiel Items: A product-oriented family tree composed of hardware, software, services, data, and facilities. The family tree results from systems engineering efforts during the acquisition of a defense materiel item. [2] Practice standard for Work Breakdown Structure defines WBS as follows: A Deliverable-oriented hierarchical decomposition of the work to be executed by the project team to accomplish the project objective and create the required deliverables. [4] At the same time under the term outcome it is understood a verifiable product, output or service, which have to be produced to complete a process, phase or project. The authors of the definitions are in agreement when claiming that WBS is not an action-oriented decomposition, it does not even include any activities since activities are totally included in work packages at the lowest level of WBS. On the other hand they agree on the fact that it involves product decomposition into subproducts and further into the lowest level of detail required. It is possible to state that the definition given by SPŘ in the Czech Republic is not in disagreement with the quoted definitions by DOD and PMI, therefore it can be used in the field of the project management of the Czech Republic. 3. Creating Work Breakdown Structure The project life cycle involves the phases of initialization, planning, implementation and terminating of the project. The planning phase is opened by creating WBS that is the foundation for: - managing the costs of the project implementation; - identification of activities and creating an implementation schedule; - determination of the resource requirements necessary for the project implementation; - defining responsibility and involvement in the project implementation; - quality management of the final deliverable for a customer; - managing changes in the course of project planning and project implementation. The basic foundation for creating WBS is a clearly formulated objective of the project (WHAT is to be delivered to a customer, UNTIL WHEN and FOR HOW MUCH). The top (1 level) of WBS is composed of a definition of delivery item for a customer (WHAT is to be delivered to a customer see example in Figure 1). 1 (1 level) Figure 1: Project deliverable top level of WBS The second level of WBS usually contains more precise definition of a delivery item for a customer in a way that a customer defined the item (for the example see 85

3 Figure 2) Figure 2: Project deliverable decomposition to the products 2 level of WBS The following hierarchical breakdown is a definition of subproducts, which will be necessary to create (produce) so that a product at the second level is created. When creating the second level the implementation team with a project manager in charge has to observe the so called 100 % rule. This obligatory rule binds WBS creators to define everything that is to be completed (delivered) so that a product at a higher level is produced (delivered). It represents a return check whether the project team identified everything that is to be completed in order to attain a higher level of WBS. Figure 2 illustrates a primary violation of the 100 % rule because the main product of the second level, which is project management, is missing here. Figure 3 shows the right observance of the 100 % rule [4] PM Presenting the project management as a deliverable (product) plays a certain role in WBS, since the project management is delivered to a project customer, and there are costs required to build it. The project management includes work of a project manager and project team, which is not directly related to creation of further deliverables (products), however, it is necessary to be executed in order to produce a final deliverable (achieve the project objective). When accomplishing the identification of the products at a certain level, the project team together with the project manager decides whether the performed breakdown is sufficient for the description of the products (subproducts). The level of details of the decomposition is related to experience and capabilities of the project 86 Figure 3: Right project deliverable decomposition to the products 1-2 level of WBS team and project manager to control their production from the perspective of restrictive project criteria (time, costs, resources, risks), customer defined criteria (acceptance criteria), together with achieving the required quality of the final deliverable, the project as a whole and the project management (for the example see Figure 4). Providing that the project manager decides that the product decomposition is detailed enough for managing the implementation and producing further documents in the course of planning, it is possible to terminate the product decomposition in terms of subproducts decomposition into work packages. Work packages represent a set of activities to be accomplished in order to create the products (to observe the 100 point rule).

4 PM Barrel Night sight Shall with tracer Magazine Day sight Bolt assist mechanism Figure 4: Project deliverable decomposition into the products 1-3 level of WBS 4. How does Work Breakdown Structure support decision making in project? Together with Logical Frame Matrix WBS is the initial decision making tool of the project manager for setting up the project plan, managing the changes in the project and its monitoring. Completed WBS enables, after it has been created, clarifying the requirements of financial resources for activity achievement summarized in the work packages (the costs of necessary project resources, material used in order to create the required subproducts, products and the final outcome). The project manager and implementing team express in percentage the share of financial means spent on creating the individual subproducts and products at individual levels (for the example see Figure 5). Each level must add up to 100 points. The total points of subproducts must equal the final value of the product (100 points). Owing to the fact that WBS is not an action-oriented decomposition, it is not possible to create, out of WBS, a project schedule with defined links. However, if the 100 % rule is observed, then the project team can decompose the work packages into activities that are to be carried out and into milestones that are to be attained. Individual activities with the usage of the method CPM or PERT are evaluated in terms of time, a network chart is composed and a network chart analysis is executed (concord in attained milestones, initialization and termination of the project according to the assignment). Consequently, WBS with already created Organizational Breakdown Structure (OBS) helps the project manager to build Responsibilities Matrix (RM). The goal of RM is to assign responsibility to the members of the project team for the lowest level products creation, and verification whether there is a sufficient number of human resources in the project team or it is necessary to increase it. WBS is the foundation for creating WBS Dictionary, which is composed by the project manager together with the team. The document describes the products of the lowest level in such a way that the project team members responsible for their production know what to produce and what they are responsible for. It is also necessary to mention the effect of WBS on creating the project communication plan. While making decisions as to a kind and contents of the communication, WBS helps the project manager by indicating WHAT must be communicated, and together with RM shows who shall accomplish this communication. 87

5 PM Barrel 9 % Night sight 22 % Shall with tracer 6 % Magazine 2 % Day sight 10 % % Bolt assist mechanism 11% % % Figure 5: Breakdown of products and subproducts evaluation WBS has also a significant effect on the identification of the project risks (within the process of the project risk management) that may threaten the creation of the individual products and so the achievement of the project goal. Since WBS defines the basic scope of the project it helps the project team to identify the technological project risks in particular. Last but not least WBS is a supporting platform when managing the changes in the project. When a change rises in relation to some product defined in WBS, the impacts of this change are usually directly reflected in WBS (e.g. a new product, work package). The impact of such a change will most probably cause a requirement for identification of additional activities, costs rise, increase of resources or their work and increase of implementation time. 5. Impacts of mistakes in WBS on decision making within the project A primary and cardinal mistake that is obvious is a situation when the decomposition of the project goal is performed in terms of activities instead of products. Then the designers focus on the task how to create the resulting product instead of identifying the individual products and subproducts that they should create. The basic project scope may be inaccurate, incomplete or totally wrong. As a result, the WBS project manager and the team are not provided with a required view of the project (basic project scope). The 88 decisions made from that point on are not correct in most of the cases. The mistake of this kind stems from the lack of knowledge of building WBS. The impact of this decomposition is a high probability of not identifying all the products and subproducts that are to be produced and so the project goal is not achieved. This approach results in an excessive exceeding of the project implementation costs, and in not keeping the project implementation schedule, and that is because the team attempts to accomplish the established goal of the project through increasing the costs and extending the schedule. The following decisions based on this decomposition may be wrong and do not direct the project to its achievement. Another mistake is an incomplete WBS when the products are not identified already at the second level or at lower levels of WBS. Thus created WBS is incomplete and the following decisiontaking in the course of planning is not accurate. This mistake stems from insufficient information from the customer of the project or from an incomplete / incorrect analysis of the documents or the environment. If such a mistake is discovered when the project planning is still in progress, its impacts can be eliminated. This mistake is in most cases identified as late as the project implementation takes place. In this case it can be inferred that the impacts on the successful project

6 implementation are similar to the former case above. 6. Conclusion Although WBS was developed in the 1950s this method is among the fundamental methods of the project management and the knowledge and application of it have not lost importance. The truth is that the time has proved its benefit at decision making in the process of project planning and monitoring. Standardization of WBS is a priority for many organizations dealing with project management. Unfortunately there is not such a standard in the Czech Republic. On the other hand the positive point is that the standards of Project management Institute (USA) and Association Project Management Group (GB) are adopted or applied in the Czech Republic. At projects with low complexity of the project management there is a great number of experienced project managers who do not create WBS physically (on paper), however, they have the ability to create it mentally. Undoubtedly this helps them in decision making on project planning and its monitoring. Unfortunately there are frequent cases nowadays of a big number of project managers who are not familiar with this method or not able to use it properly. References [1] MIL-STD-881A. DoD and NASA Guide PERT COST - System, Designe. 1962, 146 p. < Accessed 2012 September 3. [2] MIL-STD-881C. Department Of Defense Standard Practice Work Breakdown Structures For Defense Materiel Items. 2011, 249 p. < STD/MIL-STD /MIL-STD-881C_32553> Accessed 2012 September 3. [3] Pitaš, Jaromír at all. Národní standard komeptencí projektového řízení. 3. vyd. aktaulizované a doplněné. Brno: Společnost pro projektové řízení, o.s., 2012, 335 s. ISBN [4] Project Management Institute. Practice standard for Work Breakdown Structures. 2 th edition. Pennsylvania: Project management Institute, Inc., 2006, 111 p. ISNB [5] Project management Institute. A Guide To The Project Management Body Of Knowledge. 4 th edition. Pennsylvania: Project management Institute, Inc., 2008, 467 p. ISNB