by Josh
I wanted to share an email question I received through a Twitter contact of mine and my response. Feel free to chip in with your own insights!
photo by Tracy O
Question:
I hope you don’t mind me coming to you for advise and help with Project Management. I have this one question which I keep pondering on. In what way would you say that monitoring, planning and controlling project cost with a budget and organizing and planning a project using the WBS help or support one another?
Thanks!
My response:
Glad we connected on Twitter! In my projects, the WBS is one of the key things that helps me with planning and monitoring costs. The WBS is a prerequisite. When I have a WBS, I can look at it and see where I should have charge codes set up for project staff, and where I should be reporting project costs. Usually there is a specific level of detail that is relevant to various people. The sponsor may want to see costs at level 3 of the WBS, and I may be interested in a little more detail at level 4, and the other project managers who work with me may be looking at level 5. You may have specific stakeholders who only care about level 3 cost reporting for a particular element of the project, etc.
When putting estimates together, it’s important to first have a clear idea of what your scope is, and much of that comes from the WBS. Bucket your basis of estimates this way, schedule, etc. The iron triangle means that scope, cost, and schedule are integrated.
Monitoring and controlling your projects through status reports, EVM, etc. can really only done effectively by keeping in lock-step with your WBS structure.
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12 Comments
Dr. Paul D. GiammalvoApril 1, 2009 8:47 am
Hi Josh,
About the only fine point I would urge you to consider is the “iron triangle” is better known as the “Tetrad Trade Off” when you add quality along with time, cost and scope.
The reason for that should be clear enough. Quality has an impact on both time and cost. As in “you can have your project cheap and fast, fast and good or good and cheap, but you CANNOT have it fast and good and cheap”. Best example is taking your clothes into the dry cleaner…… 1 hour service can be done, but you are charged a premium and you won’t get any difficult stains removed. But if you can wait 24 hours, it will be cheaper and they can spend extra time on those tough stains…….
Given you are so keen on WBS and the link betwen costs, have you taken the time to investigate OmniClass yet? http://www.omniclass.org
Doesn’t mean much for IT guys, but with the proliferation of Building Integrated Modeling (BIM) it offers some pretty interesting challenges for the IT sector.
BR,
Dr. PDG, Heading to bed in Jakarta
Glen B. Alleman April 06 2009 20:46 pm
Paul,
The current release of the Earned Value Intent Guide (EVIG) uses Cost, Schedule, and Technical Performance as the three dependent variables of project performance measures. The intent guide can be found at many locations - http://management.energy.gov/documents/NDIA_PMSC_EVMS_IntentGuide_Nov_2006.pdf - is one.
The notion of Faster Better Cheaper is alive and well in many domains. Cost as an Independent Variable (CAIV) (http://www.dau.mil/pubs/arq/2000arq/kaye.pdf) and Schedule as an Independent Variable (CAIV) (http://seari.mit.edu/documents/preprints/RICHARDS_RS608.pdf) is the basis of program management processes in space and defense.
Glen B. Alleman
VP, Program Planning and Controls
Denver, Colorado
www.lewisandfowler.com
Travis AndersonApril 2, 2009 6:49 pm
There are different flavors of WBS and also serve different purposes. For example, PWBS is a project WBS and decomposes work to a certain level for a RFP. Organizations that respond to a RFP often develop a contractor WBS (CWBS), which decomposed the proposed scope to a lower level yet. A WBS can be oriented around but not limited to service, functionality, and systems.
A good WBS is a deliverable based structure. In software, the deliverable is often a release or a version of code. In construction, the deliverable could be foundation, sub-floor, walls, roof, etc. The WBS provides a focus based structure for the project manager. A WBS is a primary source of communication throughout the project life cycle and is reflected within the schedule, on all kinds of reports, charge number, risk registers, and invoices.
A good WBS will have a dictionary per control level, often called control accounts or cost accounts. The dictionary answers the “what” part of the scope. These accounts are where time, cost, quality, risk, performance, assumptions etc. are encapsulated and managed. Underneath these control accounts are the work packages and activities, which are statused during execution. The time and cost all roll-up into the control accounts and this is where monitoring and controls is performed.
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kelvinzhao (Kelvin Zhao)March 31, 2009 11:13 pm
Twitter Comment
#kzreading – Reader Q&A: The WBS and Cost – from @pmstudent [link to post]
– Posted using Chat Catcher