Project management ABC: Work Breakdown Structure (WBS)

What is a WBS?

The Work Breakdown Structure (WBS) is a fundamental tool in project management used to break down complex projects into manageable, hierarchically structured units. The idea of the WBS was originally developed in the context of military project management during the Second World War. The “Programme Evaluation and Review Technique” (PERT) was developed there, which laid the foundation for WBS. In the 1950s, WBS was further refined and eventually found its way into civilian projects and companies.
The WBS enables a project to be systematically broken down into sub-projects, phases, work packages, and ultimately down to the lowest level of tasks with the so-called “deliverables”. This clear hierarchy offers several advantages in project management. Firstly, it makes it much easier to plan, manage and control projects, as the complexity of projects is reduced. This makes it clear from the outset what needs to be done as part of a project. The WBS is usually created in such a way that individual levels, such as work packages, can be summarised in order to show or hide details. On the other hand, the WBS enables a precise allocation of resources, responsibilities and schedules for each level of the project structure. It also forms a proven basis for communicating with project stakeholders.
Over time, the WBS has become an internationally recognised standard in project management, which was further developed and promoted by organisations such as the Project Management Institute (PMI) in the 1980s. Today, the WBS is an indispensable tool that is used in various industries and sectors to ensure a systematic and efficient approach to complex projects.

Advantages of the WBS

• Streamlined planning and oversight: The WBS facilitates detailed planning and a clear overview by breaking the project into well-defined phases, work packages, and deliverables. This allows project managers and team members to closely monitor the progress of each phase and ensure the project stays on time and on budget.
• Improved resource allocation: The clear structure of the WBS makes it easier to allocate resources to specific work packages. This helps to avoid bottlenecks and ensure that available resources are utilised efficiently.
• Clear responsibilities: The WBS defines clear responsibilities for each team member in relation to specific work packages or deliverables. This promotes effective teamwork and minimises confusion over responsibilities.
• Improved communication: The WBS serves as a common means of communication throughout the team and with stakeholders. The clear structure makes it easier to understand project goals, progress and requirements.
• Risk minimisation: By identifying work packages and their relationship to each other, the WBS enables a targeted analysis of potential risks. This helps to take proactive measures to minimise risks.
• Improved cost control: The WBS facilitates precise cost calculation by providing a detailed breakdown of costs for each work package. This helps with accurate budgeting and cost control throughout the project.
• Flexibility to make changes: The WBS provides a flexible structure which allows changes in project scope or requirements to be accommodated. This enables the project team to react quickly to changing conditions without jeopardizing the overall structure.
• Release and approval processes: The WBS also forms the basis for defining release and approval processes. Release and approval processes: The WBS also forms the basis for defining release and approval processes.

Who should use it?

The WBS is rarely used in small projects, as these projects can be well organised without such detailed planning. Of course, smaller projects should also be well-planned and structured, but this can also be done with simpler project management approaches. For larger, complex projects, however, the WBS can offer numerous advantages, as you can quickly lose track of the project without a good structure. In addition, WBS is often an important component of program management.
Our recommendation: If the bar chart of your project already takes up more than two screen pages, you should consider creating a work breakdown structure. This will make the project much clearer. In addition, a WBS should be limited to the elements necessary for project controlling and project management. For example, by not dividing work packages into many activities these can be controlled more efficiently in task management. Too many elements in a WBS reduce efficiency and flexibility about revisions and adjustments.

Basic principles of WBS

Some of the basic principles of WBS have remained unchanged from its beginnings to the present day. These are:

• Fragmentation as the most important tool: Breaking the project down into smaller units is the most important technique when creating work breakdown structures.
• Hierarchical structure: The WBS has a hierarchical structure and thus divides a project into clearly defined levels and sub-levels.
• Completeness and uniqueness: The WBS should cover the entire project and have no gaps or overlaps. Each element should be clearly and unambiguously assigned to a specific level in the hierarchy to ensure completeness and uniqueness. None of the individual elements must occur more than once.
• Separation of work packages and activities: Work packages are the lowest level of a work breakdown structure. The actual work tasks of a project are assigned to these work packages but are not themselves part of the WBS.

The components of a WBS

The components of a Work Breakdown Structure form the basic framework for breaking down complex projects into clear parts. The WBS is made up of three main components: Phases, Work Packages, and Deliverables.

1. Phases: The top level of the WBS consists of the project phases. These represent the main stages or milestones of the project. Phases are general categories that illustrate the progress and development of the project. For example, phases in a construction project could be the planning phase, the construction phase and the finalisation phase. These phases also serve as the basis for approval processes, such as phase completion and phase release.
2. Work packages: Work packages are defined below each phase. Work packages are specific tasks or activities that are required to complete the respective phase. These elements can be further subdivided into smaller, manageable units. In the context of a construction project, for example, a work package could be the laying of the foundation stone or the installation of electrical systems.
3. Deliverables: The lowest level of the WBS consists of the deliverables, the concrete results or products of each work package level. These are measurable and serve as a basis for reviewing the progress of the project. In the construction project, deliverables could be, for example, the approved construction planning, the completed foundation or the installed electrical systems.

The graphical representation of the WBS often takes the form of a tree diagram, which illustrates the hierarchical structure and relationship between the various components. This clear structure makes it much easier to plan, execute, and control projects by providing a detailed roadmap for all those involved.

How can a WBS be structured?

There are various structuring options for the WBS, which you can select according to your requirements:

1. Phase-orientated: The phase-orientated work breakdown structure is used particularly frequently, as it enables project managers to keep a close eye on scheduling while keeping track of all the deliverables.
2. Function-orientated: A function-orientated work breakdown structure, on the other hand, is useful when teams from different functional areas take on different aspects of a project and support each other. As the teams have their own areas, it is easier for them to keep track of their tasks within the project. At the same time, however, the dependencies between individual elements from one team to another are more difficult to recognize in such a WBS.
3. Object-orientated: If a project is about linking individual parts of the project with each other, an object-orientated work breakdown structure makes sense. This can be the case, for example, when it comes to the construction of a building.

A project manager needs to select a suitable form of structuring right from the start. Different structures may make sense depending on the industry, but also depending on the project. However, it is also possible to combine the various options, for example by dividing a project into phases and then subdividing these phases into objects.

From the company’s point of view, it also makes sense to work with project structure templates (e.g. templates for different project types). On the one hand, this makes it easier to set up a WBS for new projects. On the other hand, a certain harmonization of project structures helps with higher-level controlling.

Procedures for creating a WBS

Before you create a work breakdown structure, you should also be clear about which approach you want to use. There are the following alternatives:

• Top-down: In this case, you start with the top level of the WBS and slowly work your way down to detailed planning. The individual work packages are then the last logical step. This approach is particularly useful if you are already familiar with the aspects of a project and can draw on experience.
• Bottom-up: If your project has a more agile structure, then it makes sense to proceed in reverse, i.e. using the bottom-up method. Here you work your way up from individual work packages to higher levels. This makes it particularly easy to recognise relationships or dependencies between individual work packages.
• YoYo: If you find it difficult to decide between the two options above, the YoYo approach could be right for you. Here you alternate between top-down and bottom-up, for example by first creating a rough structure for the project, then defining the necessary work packages and then linking the two via the necessary intermediate levels in the next step.

Instructions for creating a WBS

Creating a Work Breakdown Structure requires careful planning and analysis. Here are the steps required to develop an effective WBS:

1. Project analysis: Start with a thorough analysis of the entire project. To do this, it is important to understand the project objectives, requirements, and scope in detail. Identify the main phases and milestones that need to be achieved.
2. Areas of responsibility: List the different areas of responsibility within the project.
3. Structure: Depending on the approach you have chosen, you can now structure the project. It is important that at the end of this step you have divided the project into phases, work packages and deliverables. Make sure each individual element helps to represent the entire project and is clearly defined. For each work package, you should define the corresponding deliverables, i.e. the specific results or products that are to be completed at the end of this work package. This will allow you to monitor the progress of the project at a later date.
4. Structuring: Structure the WBS so it follows a standardised pattern. If you are not using function-orientated structuring, you should ensure in this step that the respective responsibilities are correctly assigned to the work packages.
5. Scheduling: If scheduling is to be taken into account, you can now also add the necessary key data.
6. Validation and review: We recommend checking the WBS you have created again to ensure all necessary tasks and phases are clearly mapped and the hierarchy makes sense. You can then finalise the plan. You can also visualise the WBS graphically, for example in the form of a tree diagram, to make it even easier to keep track.
7. Regular updating: The WBS should not be regarded as a static document. Update it regularly during the realisation of your project, especially if the scope of the project changes or new information becomes available. This ensures that the WBS always reflects the current status of the project.

Best Practices

• Plan flexibility for changes: The WBS should be flexible enough to allow for changes in the scope of the project or in the requirements. A structure that is too rigid can impair the team’s ability to react.
• Involve the team in the creation: The project team should be actively involved in the process of creating the WBS. The knowledge and perspectives of the team members are valuable to ensure that all relevant aspects of the project are considered.
• Continuous communication: Use the WBS as a communication tool to convey the project status to the stakeholders of your project and enable them to understand the project structure.
• Alignment with project objectives: The WBS should be closely aligned with the overall project objectives. Each element of the structure should make a clear contribution to achieving these objectives to ensure that the project stays on track.
• Use of templates: Capitalise on the experience gained from projects where the WBS used has proven successful by providing and using appropriate templates.

Challenges when using WBS

• Complexity: For large projects, creating and maintaining a comprehensive WBS can become very complex. Managing the structure and updating it requires careful planning and clear processes.
• Team resistance: Team members may show resistance to using the WBS, especially if they do not fully understand the benefits. Therefore, it is important to involve the team in the process and communicate the importance of the WBS.
• Changes in project scope: In the course of implementing a project, there may be changes in scope that affect the project structure. It is a challenge to keep the structure flexible as requirements change without compromising its overall integrity.
• Continuous updating: The WBS should be continuously updated to reflect the current project status. If this is neglected, it can lead to misinterpretations and ineffective utilisation of resources.
• Difficulties in defining work packages: It can be difficult to create clear and complete definitions for work packages. However, ambiguities can lead to delays and misunderstandings.
• Overly detailed structure: A WBS serves to provide a clear overview of the structure of a project. However, an overly detailed WBS can also lead to information overload and thus do more harm than good. It is therefore important to find a balance between attention to detail and a clear structure so that you structure your project as leanly as possible.
• Overlook dependencies: Overlooking dependencies between work packages or phases can lead to problems with scheduling and implementation. The project structure should therefore be carefully checked for dependencies.
• Lack of integration with other tools: If the WBS is not seamlessly integrated with other project management tools, this can hinder the flow of information. Smooth collaboration between different tools is crucial.

Are WBS and agile projects compatible?

Agile projects are known for their flexible, iterative nature and often lack clearly defined objectives. This makes it difficult to create a work breakdown structure and the iterative nature of the work means that it has to be changed regularly. A WBS, which was originally developed for more traditional, sequential projects, is therefore unusual in agile projects. Nevertheless, it can be used beneficially in agile contexts if it is adapted accordingly. One example of this is feature-driven software planning, where the structure is as follows:

1. Feature: The requirements can be considered as the top level of structural planning.
2. Version: The version or the individual sprints of an agile project can be considered as separate phases of structural planning.
3. Epic: This is the thematic grouping of different user stories.
4. User story: In agile projects, the user stories, i.e. the user’s requirements, are fundamental. They can be seen as the “work package level” of the WBS, each representing a measurable functionality or result.
5. Task: Concrete tasks.
   Similar adaptations of the WBS could also be used in other industries or for other types of projects. Most agile teams work without such structures as they can be too rigid. However, the use of such structures is particularly useful in complex project environments.

Conclusion

The Work Breakdown Structure is an indispensable navigation aid in project management. Originally rooted in the military and now applied across industries, this structure has demonstrated its pivotal role in successfully executing complex projects. The clear hierarchy of the WBS not only enables efficient planning, management and control, but also promotes the precise allocation of resources, responsibilities and schedules. In a world where the complexity of projects is constantly increasing, the WBS remains a timeless tool for charting the course to project success.

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