CINCINNATI UNIVERSITY, SEPTEMBER CLASS, CIS...

How to Develop Work Breakdown Structures

Michael D. Taylor

2

Copyright  2003-2009 by Michael D. Taylor

All Rights Reserved. No part of this work covered by the copyright hereon may be reproduced or used in any form

or by any means -- graphic, electronic, or mechanical, including photocopying, recording, taping, or information

storage and retrieval system -- without written permission of Michael D. Taylor, Systems Management Services

(http://www.projectmgt.com).

P a g e | 3

WORK BREAKDOWN STRUCTURES

“A Work Breakdown Structure is 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.” 1

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, such as a product, result, or service,

and can be predicted accurately. Actions, on the other hand, 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.

TYPES OF WORK BREAKDOWN STRUCTURES

Even though the term “Work Breakdown Structure” has been used as a label for

all project scope hierarchical diagrams, there are, in practice, many types other

than “deliverable” oriented structures.

1 A Guide to the Project Management Body of Knowledge, (Newton Square, PA: Project Management Institute, 2004).

P a g e | 4

Verb-oriented WBS: a task-oriented WBS defines the deliverable of project work

in terms of the actions that must be done to produce the deliverable. The first word

in a given WBS element usually is a verb, such as, design, develop, optimize,

transfer, test, etc.

Noun-oriented WBS: a deliverable-oriented WBS defines project work in terms of

the components (physical or functional) that make up the deliverable. In this case,

the first word in a given WBS element is a noun, such as, Module A, Subsystem

A, Automobile Engine, Antenna, etc. Since the nouns are usually parts of a

product, this WBS type is sometimes called a “Product Breakdown Structure

(PBS). Deliverable-oriented WBS structures are the preferred type according to

PMI’s definition.

Time-phased WBS: a “time-phased” WBS is one that is used on very long projects.

It breaks the project into major phases instead of tasks. In this type, a “rolling

wave” approach is adopted and only the near-term phase is planned in detail.

Other WBS types may include organization-types, geographical-types, cost

breakdown types, and profit-center types.

WBS DESIGN PRINCIPLES

The 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… It is

important to remember that the 100% rule also applies to the activity

level. The work represented by the activities in each work package

must add up to 100% of the work necessary to complete the work

package.

P a g e | 5

The best way to adhere to the 100% Rule is to define WBS elements in

terms of outcomes or results.

Planned Outcomes, Not Planned Actions

If the WBS designer attempts to capture any action-oriented details in the WBS,

he/she will likely include either too many actions or too few actions. Too many

actions will exceed 100% of the parent's scope and too few will fall short of 100%

of the parent's scope. The best way to adhere to the 100% Rule is to define WBS

elements in terms of outcomes or results. This also ensures that the WBS is not

overly prescriptive of methods, allowing for greater ingenuity and creative

thinking on the part of the project participants. For new product development

projects, the most common technique to assure an outcome-oriented WBS is to

use a product breakdown structure (PBS).

Feature-driven software projects may use a similar technique which is to employ a

feature breakdown structure. When a project provides professional services, a

common technique is to capture all planned deliverables to create a deliverable-

oriented WBS. Work breakdown structures that subdivide work by project phases

(e.g. Preliminary Design Phase, Critical Design Phase) must ensure that phases are

clearly separated by a deliverable (e.g. an approved Preliminary Design Review

document, or an approved Critical Design Review document).

Level 2 is the Most Important

Of all the levels on a WBS, Level-2 is often the most important because it

determines how actual costs and schedule data are grouped for future project cost

and schedule estimating. A project manager may find it useful to know how much

it took to design (major work element) a product after it had been completed so

that the data can be used for future analogous estimating. In other cases, the

project manager may want to know how much a major part of the product actually

cost after the project was completed. For this a PBS would be used. Level-2 is

therefore used to capture “actuals” from a project for future estimating purposes.

The Four Elements in Each WBS Element

Each WBS element, when completed should contain the following four items:

1. The scope of work, including any “deliverables.”

2. The beginning and end dates for the scope of work.

3. The budget for the scope of work.

4. The name of the person responsible for the scope of work.

By using a WBS in this manner the project manager can approach a complex

project and decompose it into manageable, assignable portions. There is minimal

confusion among project members when this technique is used.

P a g e | 6

Mutually-exclusive Elements

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

How Far Down?

The WBS is decomposed down to the work package level. A work package is the

lowest level in the WBS, and is the point at which the cost and schedule for the

work can be reliably estimated. 2

A question to be answered in the design of any WBS is when to stop dividing

work into smaller elements. If a WBS terminal elements are defined too broadly, it

may not be possible to track project performance effectively. If a WBS terminal

elements are too granular, it may be inefficient to keep track of so many terminal

elements, especially if the planned work is in the distant future. A satisfactory

tradeoff may be found in the concept of progressive elaboration which allows

WBS details to be progressively refined before work begins on an element of

work.

One form of progressive elaboration in large projects is called rolling wave

planning which establishes a regular time schedule for progressive elaboration. In

reality, an effective limit of WBS granularity may be reached when it is no longer

possible to define planned outcomes, and the only details remaining are actions.

Unless these actions can be defined to adhere to the 100% Rule, the WBS should

not be further subdivided.

2 PMBOK

It is important that there is no overlap in scope definition between two

elements of a WBS.

An effective limit of WBS granularity may be reached when it is no longer

possible to define planned outcomes, and the only details remaining are

actions

P a g e | 7

The 40-Hour Rule of Decomposition

Another rule-of-thumb for determining how far down a WBS should be

decomposed is called the “40 Hour Rule.” Generally, when a project has been

decomposed down to an element that has about 40 hours of allocated direct labor,

there is no need to decompose further. The 40 Hour Rule is based on a 40-hour

work week. Because of this, most WBS diagrams are not symmetrical. Some legs

may go down to Level-4 while others may go down to Level-5.

The 4% Rule of Decomposition

Gary Heerkens suggests a 4% Rule for decomposing a WBS. With this rule a

WBS is adequately decomposed when the lowest element is about 4% of the total

project. 3 For a 26-week schedule, the lowest element should be about one week.

For a $2.6M project, the lowest level should be about $104K.

WBS Identification Numbering

It is common for WBS elements to be numbered sequentially to reveal the

hierarchical structure. For example 1.3.2 Rear Wheel identifies this item as a

Level 3 WBS element, since there are three numbers separated decimal point. A

coding scheme also helps WBS elements to be recognized in any written context.

Figure 1 WBS Construction Example

The above WBS is from PMI's Practice Standard for Work Breakdown Structures

(2nd Edition). This image illustrates an objective method of employing the 100%

Rule during WBS construction.

3 Gary R. Heerkens, Project Management (New York, NY: McGraw-Hill Publishers, 2002) p. 103, 122.

P a g e | 8

Figure 1 shows a WBS construction technique that demonstrates the 100% Rule

quantitatively. At the beginning of the design process, the project manager has

assigned 100 points to the total scope of this project, which is designing and

building a custom bicycle. At WBS Level 2, the 100 total points are subdivided

into seven comprehensive elements. The number of points allocated to each is a

judgment based on the relative effort involved; it is NOT an estimate of duration.

The three largest elements of WBS Level 2 are further subdivided at Level 3, and

so forth. The largest terminal elements at Level 3 represent only 17% of the total

scope of work. These larger elements may be further subdivided using the

progressive elaboration technique described above.

In this example, the WBS coding scheme includes a trailing "underscore"

character ("_") to identify terminal elements. This is a useful coding scheme

because planned project schedule activities (e.g. "Install inner tube and tire") will

be assigned to terminal elements instead of parent elements.

It is recommended that WBS design be initiated with interactive software (e.g. a

spreadsheet) that allows automatic rolling up of point values. Another

recommended practice is to discuss the point estimations with project team

members. This collaborative technique builds greater insight into scope

definitions, underlying assumptions, and consensus regarding the level of

granularity required to manage the project.

Another example of a Project WBS using the 100% Method is shown below.

PROJECT 1267 (100%)

1267.1.1 Reqt’s Definition

(7%)

1267.1.2 Regulations

(5%)

1267.1.3 Scheduling

(5%)

1267.1.4 Mon & Control

(5%)

1267.2.1 Conceptual Design

(5%)

1267.2.2 Preliminary

Design (5%)

1267.2.3 Final Design

(5%)

1267.3.1 Civil Engineering

(7%)

1267.3.2 Mechanical Engineering

(5%)

1267.3.3 Electrical

Engineering (3%)

1267.3.4 Systems

Engineering (5%)

1267.4.1 Foundation

(7%)

1267.4.2 Structures

(5%)

1267.4.3 Roads (5%)

1267.4.4 Landscape

(3%)

1267.5.1 Safety Planning

(4%)

1267.5.2 Safety Documents

(4%)

1267.5.3 Inspections

(4%)

1267.1.6 Closeout

(3%)

1267.1.5 Procurement Management

(8%)

1267.1.0 Systems Integ.

(33%)

1267.2.0 Design (15%)

1267.3.0 Engineering

(20%)

1267.4.0 Construction

(20%)

1267.5.0 Safety (12%)

P a g e | 9

COMMON PITFALLS AND MISCONCEPTIONS

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 (e.g. using

project management software) 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. It is not possible to

recover from an improperly defined WBS without starting over, so it is

worthwhile to finish the WBS design before starting a project plan or project

schedule.

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.

Short-term memory capacity should not dictate the size and span of a WBS tree

structure. Some reference material suggests that each WBS level be limited to 5-9

elements because that is a theoretical limit to short-term memory. 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.

WBS Checklist

 The top element of the WBS is the overall deliverable of the project, and all

stakeholders agree with it.

 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.

 The WBS elements are defined in terms of outcomes or results. (Outcomes are

the desired ends of the project, and can be predicted accurately).

 Each WBS element has an identification number assigned which identifies its

relative position within the structure.

P a g e | 10

 The WBS encompasses everything that will ultimately comprise the project

deliverable, and all deliverables in the project are included.

 Each WBS element contains the following four items:

 The scope of work, including any “deliverables.”

 The beginning and end dates for the scope of work.

 The budget for the scope of work.

 The name of the person responsible for the scope of work.

 There is no overlap in scope definition between two elements of a WBS.

 The WBS is not a project plan or a project schedule, and it is not a

chronological listing.

 In the judgment of all parties involved, the WBS has been decomposed and it

is no longer possible to define planned outcomes--the only details remaining

are actions.

 The WBS is not an exhaustive list of work. It is instead a comprehensive

classification of project scope.

 The WBS is not an organizational hierarchy.

 In the judgment of all parties involved, the WBS is neither over-simplified or

overly complex. It provides an adequate graphical or outline form for viewing

the overall scope of the project.

Where to Get More Information

 Carl L. Pritchard. Nuts and Bolts Series 1: How to Build a Work Breakdown Structure. ISBN 1-

890367-12-5

 Dennis P. Miller, Visual Project Planning & Scheduling, Second Edition (2002). ISBN 0-9640630-2-

6 (Note: This e-book is essential a facilator's guide for planning a project based on the WBS.)

 Gary R. Heerkens. Project Management. (New York, NY: McGraw-Hill Publishers, 2002). ISBN 0-

07-137952-5.

 Gregory T. Haugan. Effective Work Breakdown Structures (The Project Management Essential

Library Series). ISBN 1-56726-135-3.

 Project Management Institute. Project Management Institute Practice Standard for Work Breakdown

Structures, Second Edition (2006). ISBN 1-933890-13-4 (Note: The Second Edition is an extensive

re-write of the Practice Standard).

 Robert Wysocki. Effective Project Management: Traditional, Adaptive, Extreme. Indianapolis, IN:

Wiley Publishing, 2003.

Assignment 3. Project Scope Management.docx

Assignment 3 - Project Scope Management

Pick one of the four projects in Exercise #6 on page 216. Create a WBS for the project per the instructions. Use a mind map as a tool to set up the WBS. A Gantt chart is ALSO required. Submit the WBS and Mind Map as attachments.

A simple sample of a WBS is provided in the attachments (in both MS Project and MS PowerPoint format). Also see the attached How-To for WBS creation.

Article -WBS How To (PDF)

SAMPLE WBS.mpp 

Sample WBS.pptx 

DUE MONDAY SEPT 26TH @11PM