Bad Project Scope

Bad Project Scope - PMLinks.com

A bad project ‘Scope’ can leave a bad taste in everyone’s mouth. It is difficult to control / manage a project scope if it’s not well defined. There is an overall project scope and scopes of work within a project. All should be well managed / documented to understand impacts and ensure all project stakeholders are on the same page with impacts.

Simple change control processes and logs are essential for project management.

Manage the project and don’t let the project manage you.

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Are you ready to implement an Enterprise Project Management (EPM) or a Project Portfolio Management (PPM) solution?

To EPM or Not to EPM - PMLinks.com

Michael Davis, PMP, ITIL v3, GWCPM - PMLinks.com(PM Links OpPap (Opinion Paper) / Blog)
Topic: Enterprise Project Management (EPM) / Project Portfolio Management (PPM)
Author: Michael C. Davis, PMP (PMLinks.com), ITIL v3, GWCPM
November 17th, 2016

If you say you are ready to implement an EPM / PPM solution, let us define ready.  Ready can mean a lot of different things.  It could mean you or someone from your company heard the buzz words of EPM or PPM and thought it would be a cool thing to do.  It could also mean you have corporate / management support, understand the real benefits of enterprise project management or project portfolio management and what it takes to implement.  You may even be somewhere in the middle.

Before I get started, let’s make sure we are all on the same page when we talk about EPM or PPM.  I snagged both definitions of EPM and PPM from the trusty Wikipedia site.

Enterprise Project Management (EPM) – Source: Wikipedia, in broad terms, is the field of organizational development that supports organizations in managing integrally and adapting themselves to the changes of a transformation. Enterprise Project Management is a way of thinking, communicating and working, supported by an information system, that organizes enterprise’s resources in a direct relationship to the leadership’s vision and the mission, strategy, goals and objectives that move the organization forward. Simply put, EPM provides a 360 degree view of the organization’s collective efforts.

Project Portfolio Management (PPM) – Source: Wikipedia, is the centralized management of the processes, methods, and technologies used by project managers and project management offices (PMOs) to analyze and collectively manage current or proposed projects based on numerous key characteristics. The objectives of PPM are to determine the optimal resource mix for delivery and to schedule activities to best achieve an organization’s operational and financial goals, while honoring constraints imposed by customers, strategic objectives, or external real-world factors.

Now, on to the show…

Too many times a great sales person puts on an incredible show of bells and whistles of the latest ‘solution’ to real business problems dealing with high project workloads and resource management.  The problem is that for the most part, once the smoke clears from the fountains and sparklers, most people walk out saying ‘we have to have that’.  What they may have missed, or even it may have be omitted from the demonstration, is the amount of work that must occur by your IT department, resources, project managers, resource managers and executives to make ALL those pretty blinky lights blink and dashboards dash.  This is why I ask if you are ‘ready’.  To have a usable EPM or PPM solution you must put stuff in to get stuff out and that stuff must be good stuff.  Otherwise garbage in, garbage out.  That good stuff mentioned includes but not limited to:

  • Executives activating projects using a pipeline with appropriate budgeting data and customer completion expectations.
  • Resource managers properly balancing their resources and assigning to projects.
  • Project managers loading and maintaining project schedules with resources and baselines
  • Resources entering / tracking their time against the projects (if time tracking is required).

There are a bunch of back end things to consider as well. Who will gather the requirements of the solution that you want to implement.  In many cases I have seen consulting companies do this for businesses however this may become a never ending dependency (YAY FOR THE CONSULTING COMPANY).  Who will administer the solution (User management, infrastructure hardware and software, adding / changing the solution based on new or changing requirements).  Don’t freak out though, you just need to pick your starting point.  Start with identifying the business problems you are trying to solve?  Here are some typical business problems many businesses face when considering an EPM or PPM solution:

  • We need to be able to make accurate data driven decisions related to our projects.
  • We don’t have a good way of knowing if a project is truly on budget and / or on schedule.
  • We don’t have a good centralized way of knowing the health of an individual project the portfolio of projects.
  • We don’t have a good way to be able to prioritize projects.
  • We don’t have a good way to know a project is about to be in trouble until it’s too late.
  • We don’t know if our resources are over or under allocated.
  • We don’t know which resources are available for projects.
  • We don’t have an easy way to report on projects or the resources assigned to them.

I could go on and on based on my experience with several solution rollouts with different companies.  Just like when selecting a car to buy, it’s always best to know what kind of car you really need before a car sales person talks you into what they want you to buy.  So with that being said, MAKE SURE to define your business problems FIRST before you say you are ready for an EPM or PPM solution.  You also need to know what stuff you expect to get out of a solution before trying to determine what to make it look like…. BLINKY LIGHTS!  Don’t let yourself get caught up in all the ‘COOL STUFF’ a solution can do, because not all of it could be what you TRUELY need.

There are a lot of companies and solutions out there, so make sure to shop around with your business problem list and any requirements that you may have already gathered.

I am available to help with making that first step before you really make it. I’m kind of like a crawl instructor with graduation being that first step.  Please feel free to contact me using my contact form on PMLinks.com.

Thank  you for taking the time to read this OpPap from PMLinks.com (Michael C. Davis, PMP ITIL v3, GWCPM)

This post from this site cannot be reproduced, rewritten or used in any other way without permission (this excludes the sharing of unedited versions on social media or other websites with credit to PMLinks.com). You can request permission using our contact form – http://pmlinks.com/about-us/contact-us

ProjectManager.com – New Member

We would like to welcome ProjectManager.com to our directory and as a member.  You can see all of their project management related services using this link – http://pmlinks.com/directory/listing/projectmanager-com

If you are in the field of project management and would like to also be added to the directory, you can by going to the PMLinks.com website – http://pmlinks.com/directory/add-directory-listing

Strategies to Ensure Success for Your IAM Project

Strategies to Ensure Success for Your IAM Project
Source: Project Management White Papers

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Project Scope Creep and Project Portfolio Impact

PM Links - Project Management - Project Scope Creep and Project Portfolio Impact(PM Links OpPap (Opinion Paper) / Blog)
Topic: Project Management – Project Scope Creep and Project Portfolio Impact
Author: Michael C. Davis, PMP (PMLinks.com)
July 2nd, 2016

As any project manager knows, project scope is the foundation of a project.  It is the ‘expected result’ at the end of a project and the basis for the specifics (project requirements) that should be defined before determining the how (project work).  Project Scope creep haunts every project and management of that scope creep is crucial in order to accomplish a successful project.  This should always be managed using a process of project scope change control.

Throughout my experience in the field of project management, organizations seem to miss, ignore or aren’t aware of the impact that the portfolio of projects can have on the individual projects and their scopes.  How the project portfolio is managed or mismanaged can be more detrimental to a project than scope creep within the projects themselves.  Activation or deactivation of projects should always consider how it could impact all other projects within the portfolio.  The mismanagement of a project portfolio can at a minimum impact the triple constraint of one or all of the individual projects.  Ultimately, this can cause scope creep across the portfolio.

Prior to activation or deactivation of projects in a project portfolio, organizations should consider the impacts to any related project resources, schedules and budgets.  Predetermined questions should be defined for project portfolio management.  There are common questions that can apply to any organization but specific questions may apply based on the organization’s industry as well.

Before activating projects in a portfolio, some questions to consider may include:

  • Does this project align to any other project in the portfolio?
  • Does this project overload the resources currently assigned to other projects in the portfolio?
  • Can this project benefit or cause impacts to scope of other projects in the portfolio?
  • Is this project duplicating work already underway by other projects within the portfolio?
  • Should the project be delayed or prioritized ahead of other projects within the portfolio to avoid conflicts?

Other questions should be considered to help avoid pushing the individual projects into unexpected scope creep.

It’s always a good idea to have a pipeline assessment process and / or committee for project portfolio management to asks these questions for impact assessments, ranking and prioritization.  This can help avoid making a project manager’s job even more complex.

Thank  you for taking the time to read this OpPap from PMLinks.com

This post from this site cannot be reproduced, rewritten or used in any other way without permission (this excludes the sharing of unedited versions on social media or other websites with credit to PMLinks.com). You can request permission using our contact form – http://pmlinks.com/about-us/contact-us

5 Steps to Build Confidence in Your Team Members

In a previous post, 5 Tips to Build Confidence in Yourself As a Project Manager, we looked at how to build confidence in ourselves. In this post we change the focus and look at how to build confidence in others.

confidence

As project management professionals, one of our most important roles is to bring out the best in our team. This includes not just building a great team, but encouraging collaboration and empowering people around us. We achieve this success by helping individuals improve their confidence and make them see that their contributions and talents matter. The rewards are big—from improved employee engagement and performance to increased productivity. Here are five ways to instill confidence in your team members:

1. Help people learn and develop. Confidence and competence are closely related. If team members feel that they’re not developing professionally and that their skills are being under-utilized, they’ll quickly begin to doubt their abilities. To increase your team members’ confidence, you have to help them improve and learn new skills so they can play a stronger role in contributing to the project.

One way of doing this is to give your team access to courses, training and conferences. Another way is to give them time to study or to run a pet project they’re passionate about. You can also set up knowledge-sharing sessions to the benefit of the entire team, or even the entire department.

2. Delegate step-by-step. A great way to build up your team members’ competence—and thereby their confidence—is to delegate specific tasks that will help them grow in an area they’re interested in. Just be careful that you don’t delegate too soon or too quickly; and don’t leave people to their own devices when they’re in new territory. When someone lacks confidence and competence it’s far better to gradually give them more responsibility and to stick close by them until they no longer need you. Your job is to help you team members set reachable goals and to break difficult tasks into smaller steps. In that way people slowly but surely gain confidence as they start to master each step of the assignment.

building confidence

3. Focus on people’s strengths. As a project manager or team leader you’re likely to have a fair bit of influence over who does what. You can use that to actively build up someone’s confidence by giving them work that they’re genuinely good at and interested in. People’s confidence (and motivation) will generally grow when they’re given the chance to put their skills into practice and show mastery. The question you need to ask is: How well do you know each of your team member’s strengths. To learn more, check out Tom Rath’s best-selling book, Strengths Finder.

 

4. Be supportive. One of the most fundamental ways to boost people’s confidence is to actively support them and build them up emotionally. And one of the best ways to create a strong supportive foundation is to connect with individuals one-on-one. When you do, make space to sincerely listen to their concerns and help them realize how much they have to contribute. When you get to know the members of your team at a more personal level (e.g., what motivates them; what really matters to them) you’ll intuitively know how to best support them.

Another way to demonstrate your support is to actively praise a team member and provide positive feedback when someone does something well. We all like to feelappreciated and it takes so little to say “Thanks, that was a superb job you did.”

confidence in your plan

5. Embrace failureAnother great way to build people up is to let them know that it’s OK to make mistakes—as long as they don’t keep making the same ones. When you remove the fear of failure you make people feel safe. As a result, team members open up and are more willing to contribute and experiment. Knowing that they have the space to learn from their mistakes rather than being penalized for them builds their confidence and takes away an enormous chunk of negative energy and worry. Essentially, you free people up to pursue that which is truly important: The successful delivery of the project.

Can you add a No. 6 tip? Drop yours into Comments, we want to hear from you!

 

Related stories:
5 Tips to Build Confidence in Yourself As a Project Manager
11 Ways to Build the Strength of Your Team Members
5 Ways to Appreciate Your Team Members – and Why Acknowledgment Matters

Source: Project Management Articles

7 Steps to Improve Collaboration on Your Team

Effective collaboration achieves what no single team member can on her own. As business magnate Richard Branson said, “A business has to be involving, it has to be fun, and it has to exercise your creative instincts.”  The best collaborations do this—optimize each person’s skills by utilizing suggestions from around the table, inspiring cooperation and creative buy-in from all involved.

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Here are seven effective ways to create stronger team collaboration.

  1. Aggregate and adapt:  Any good project manager will bring ideas and plans to the table.  The most collaborative will be highly skilled at weaving in the suggestions, ideas and goals of their team for a best-of fusion. Complex, multidisciplinary projects need to employ agile methodologies, involving innovation from all stakeholders and parties to succeed. The use of real-time data to help participants understand what is and isn’t working allows adjustments to be made on the fly. Successful collaboration is an aggregate of the best ideas while remaining adaptive and flexible.
  2. Listen first:  An effective collaborator knows how to bridge differing ideas into workable solutions. Getting to the root of any new concept or suggestion involves active listening, and listening actively to everyone with a stake in the outcome before mapping a course.  Active listening includes giving feedback to confirm and clarify the information that was shared, and having a discussion in real time. A great collaborator will be able to respond most effectively once all parties have been heard. Team members want to feel valued, and being heard is where being valued begins.

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  1. Energize: The best collaborators assume that others are working smart and working hard. An effective and collaborative leader can bring inspiration and energy into a meeting room or conversation by helping team members feel valued. They sincerely express appreciation for a job well done.  When criticism is offered thoughtfully and in the spirit of “your work is important to this project’s success,” effective collaboration becomes second nature. Talking about issues that need to be addressed can be done in a way that gets the team motivated about what’s possible.  A motivated, energized team is a project’s strongest asset.
  2. Remain open: Great collaborators always keep an open mind and know that brilliant ideas come from the unexpected. Openness is also crucial in building an atmosphere of trust. Workplace relationships are successful when employees are comfortable enough to voice concerns and make suggestions.  Satisfied employees comfortably voice concerns and ask questions, and they know where to find the answers. Remaining open to new ideas, accomplishments and thoughtful critique empowers the entire team. The result: Faster problem-solving, healthier teamwork, greater trust and ultimately improved performance.
  3. Be transparent: The most effective collaborators are less concerned with titles and roles than they are with solutions. If a fantastic suggestion is made they give credit where credit is due, regardless of source. Furthermore, effective collaborators clearly define expectations and share information across the board. Clear and inclusive communication allows team members to know that they matter enough to be told the truth. Sharing details with the team increases a sense of workplace community, and adds to the spirit of collaboration. Teams thrive in environments that encourage trial and error and encourage participation project tracker.

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  1. Have fun! Plato is credited with saying that you can discover more about a person in an hour of play than in a year of conversation. An organization or project is more successful when morale, motivation and trust are high. Having fun together—from Tuesday lunches to a bowling night to meetings where humor and optimism have their place—make a positive difference in helping team members from different parts of any project feel connected. Healthy environments incorporate appropriate camaraderie-building events and attitudes, fostering a sense of connectedness and accountability that goes beyond schedules and deadlines.
  2. Transcend insularity: The most effective collaborators will know that the strongest parts make up the strongest whole. Workgroups have a tendency to silo.  But the workplace of today is best served by operating without boundaries. So instead, make collaboration the goal and hold each member of the team accountable for their participation.

Sustained dialogue, frequent opportunities to connect through technology and a mutual sense of purpose will help collaboration become second nature. Look for common ground and emerging issues of mutual interest, and encourage team members to connect and discuss.

What would be your #8 collaboration tip? Tell us in Comments.

Related stories:
What Top Performing Project Managers Do Differently
How Divergent Thinking Can Advance Your Career
The 7 Personality Types that Make a Well-Rounded Team

Source: Project Management Articles

SMAC technologies in 2014 and beyond

The increasing pace of change is rapidly driving customer, businesses and technology firms in a tight embrace, with the convergence of disruptive technologies eroding the boundaries separating them. Businesses are becoming more and more agile, and technologies such as social media, mobility, analytics and cloud computing are coming together to unleash unlimited opportunities for everyone involved. This convergence – also known as SMAC – will be the leading disruptor to the business-technology ecosystem over the next few years. 

SMAC


Social media

A social media strategy has become a must for all enterprises, be it banks, retailers or the government. With over one billion individuals logged on to various social networks, people are now using social media for advice on what products to buy, where to shop and even regarding what firms they want to work with. While most enterprises use social media for their customer service function only, many firms have now started using social media in tandem with their sales and marketing functions. This in turn enables firms to use data generated by the customers effectively to service their larger pools of customers.


Mobility

Mobile devices have changed the way people access digital content. Smartphones and tablets have brought rich, digital content to the fingertips of consumers. Mobile banking has emerged as one of the most innovative products in the financial services industry. Shoppers are increasingly using their mobile devices for everything from browsing to comparing to buying products. Governments are also reaching out to their citizens, using mobile devices as an efficient channel. Enterprises must also jump on to the mobility bandwagon, and ensure that their applications are mobile ready.


Analytics

Every year, companies and individuals generate billions of gigabytes of data. Data, which properly analyzed and used in time, can emerge as an unbeatable competitive advantage. Enterprises need to recognize the prospect analytics represents and should adapt their IT strategy to capture such opportunities’. Analytics can help retailers predict buying decisions of shoppers; it can help banks weed out fraudulent transactions; while governments can use analytics to provide services directly to their citizens. Predictive analytics has also been adopted across industries in various scenario building activities.


Cloud computing

The undeniable power of cloud computing to foster innovations and imprve productivity is now accepted by both IT vendors and their customers. While the financial services and government sectors are mostly moving to a private cloud model due to information security concerns, other industries like healthcare and retail have adopted public cloud. Moreover, their existing infrastructure has helped telecom players to emerge as providers of cloud computing, leading to erosion in boundaries between IT and telecom vendors.

 

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Experts predict that the confluence of SMAC — social media, mobility, analytics, and cloud computing — will be a potent and leading business-technology enabler of the next decade. They agree that the SMAC ecosystem will have a huge rub-off on IT services. Gartner estimates that India-centric IT services vendors will witness an 8-10% annual revenue growth from SMAC. 


SMAC may provide the much-needed boost for India’s $108-billion IT sector, which has had a jagged growth in the last couple of years on account of global economic challenges, falling consumer spending, and a Eurozone crisis in their main markets. Industry body Nasscom foresees a 12-14% revenue growth in the ongoing fiscal year. The adoption of disruptive technologies could further impel client spending. 

 

Typical SMAC Stack

Source: Project Management Articles

Risks don’t add up

The way PMI deals with risk in the PMBOK® Guide is simplistic. Calculating the effect of one risk using the suggested probability x severity calculation provides one value.  For example, if there is an 20% probability an estimate is under valued by $50,000 the Expected Monetary Value (EMV) for this event will be:
  -$50,000 x 0.2 = -$10,000   it is simple but its not a lot of use in the real world.

The first problem is the under-estimated value is not known and would be better represented by a range statement but as the values in the range alter so does the probability of and value occurring.  Thinking of your car for a moment:

  • There is a fairly high probability of an accident causing a minor scratch or dent occurring in any given year (particularly in shopping centre car parks) say a 20% probability of an accident occurring with the damage costing $500 or less to repair. 
  • There is a very low probability of an accident causing the car to be written off; say a less then 1% chance of an accident costing $50,000 or more.

Whilst there is only one car and it may have more then one accident in a year these parameters do not mean there will ever actually be an accident!  Even the 20% probability of a $500 accident occurring in any given year, does not mean there will be at least one accident every 5 years.  The maths are much more complicated.

The next issue is correlation – returning to the under estimate…… was the under-estimate a one-off factor (caused by a single unrelated external supplier) or is it a systemic estimating error affecting a number of related estimates (possibly caused by changes in the exchange rate).  This needs modelling to determine the overall effect.

Then we come to the purpose of this article – do risks add together or discount each other?  It depends on the situation.

 

Situation 1 looks at the probability of starting on time.

Consider three schedule activities each of 10 days duration, all of which need to be complete before their outputs can be integrated.

Activity 1 & 2 both have a 90% probability of achieving the estimated duration of 10 days.

Activity 3 has an 80% probability of achieving the 10 days.

The overall chance of starting the ‘Integration’ activity on schedule needs an understanding of how these three activities affect its start. Based on the percentages above:

  • Activity 1 has a 1 in 10 chance of causing a delay
  • Activity 2 has a 1 in 10 chance of causing a delay
  • Activity 3 has a 1 in 5 chance of causing a delay

 

There are 10 x 10 x 5 = 500 possible outcomes within the model and within this
9 x 9 x 4 = 324 ways of not being late (it does not matter how early any of the projects finish as long as they are not late).

Take the number of ‘not late’ outcomes from the possible range of outcomes;  500 – 324 leaves 176 ways of being late.

176/500 = 0.352 or a 35.2% probability of not making the start date.

Or a 100 – 35.2 = 64.8% probability of being on time.

The quicker way to calculate this is simply to multiply the probabilities together:

0.9 x 0.9 x 0.8 = 64.8%

For a more complete explanation see: http://mosaicprojects.wordpress.com/2013/01/18/whats-the-probability/

 

 

Situation 2 looks at the probability of finishing on or under budget.

In this scenario, money saved on one part of the project can be used to offset overspending on another. Assume you have 10 teams working on your project and they all estimate completing their section of the work for between $8,000 and $12,000; with the expected average of $10,000 per team. As the PM, you can aggregate these estimates to arrive at a project budget of $100,000.

However, your team leaders are unlikely to submit an estimate which has only got a 50% chance of being achieved, let’s assume they use the 90% probability benchmark common in oil and gas projects…

To achieve a 90% probability of the estimate being achieved, each of the individual team estimates will need to be increased to around $11,300 (assuming a normal distribution); which pushes the overall project budget up to $113,000 if you simply add up the risk adjusted estimates.

If you accept this approach, how much safety does this give the project manager?? The answer is a surprising 99.998% probability of not exceeding the overall project budget!

The effect of combining uncertainties into a ‘portfolio’ is to reduce the overall level of uncertainty in the portfolio; basically wins on the ‘swings’ can be used to offset losses on the ‘roundabouts’ generating an increase in the overall probability of achieving any given target for the portfolio.

So if your project needs to achieve a 90% certainty overall and there are 10 separate teams, the correct budget is around $104,000, not the $113,000 calculated by summing each of the teams ‘90% estimates’ (or the $113,000 required if the project is a single holistic entity).  For more on this see Averaging the Power of Portfolios: http://mosaicprojects.wordpress.com/2012/07/08/averaging-the-power-of-portfolios/

 

Confused or worried????

Hopefully this short article has made you think about getting serious help when you start looking beyond developing a simple risk register. This is not my core skill but I do know enough about risk to understand that the difference between an individual project risks, the overall risk of a project and the risks associated with a portfolio of projects are complicated. 

Source: Project Management Articles

Breakdown Structures Revisited

Breakdown structures are central to the practice of project management and have their origins in the industrial revolution.  In the ‘Wealth of Nations’ Smith advocated breaking the production of goods into tiny tasks that can be undertaken by people following simple instructions. ‘Why hire a talented pin maker when ten factory workers using machines and working together can produce a thousand times more pins than the artisan working alone?’  Similar ideas underpinned Newtonian physics. Newton saw the world as a harmonious mechanism controlled by a universal law. Applying scientific observations to parts of the whole would allow understanding and insights to occur and eventually a complete understanding of the ‘clockwork universe’.

These ideas fed into scientific management.  Scientific management focuses on worker and machine relationships and assumes productivity can be increased by increasing the efficiency of production processes. In 1911, Frederick Taylor, known as the Father of Scientific Management, published Principles of Scientific Management in which he proposed work methods designed to increase worker productivity.

This ‘reductionist’ approach to complex endeavours, supported by the division of labour is central scientific management as well as to many modern project management processes built around ‘breakdown structures’[1].

Some of the types of Breakdown Structure in use today include:

  • WBS (Work Breakdown Structure)
  • OBS (Organizational Breakdown Structure)
  • CBS (Cost Breakdown Structure
  • RBS (Resource Breakdown Structure
  • PBS (Product Breakdown Structure)
  • BoM (Bill of Materials)
  • RBS (Risk Breakdown Structure)
  • CBS (Contract Breakdown Structure)

Their functions can be briefly defined as follows:

Work Breakdown Structure[2] (WBS)

A work breakdown structure (WBS) is a tool used to define and group a project’s discrete work elements (or tasks) in a way that helps organise and define the total work scope of the project It provides the framework for detailed cost estimating and control along with providing guidance for schedule development and control.

Organisation Breakdown Structure (OBS)

The organisation(al) breakdown structure (OBS) defines the organisational relationships and is used as the framework for assigning work responsibilities. The intersection of the OBS and WBS defines points of management accountability for the work called Control (or Cost) Accounts.

Cost Breakdown Structure (CBS)

The cost breakdown structure (CBS) classifies the costs within project into cost units/cost centres and cost elements/cost types. The establishment of a cost structure aids efficient cost planning, controlling, and the introduction of measures to reduce costs. The CBS and Control Accounts are frequently aligned (see section below)

Resource Breakdown Structure

The resource breakdown structure (RBS) is a standardised list of personnel resources related by function and arranged in a hierarchical structure to facilitate planning and controlling of project work.

Product Breakdown Structure  (PBS)

A product breakdown structure (PBS) is an exhaustive, hierarchical tree structure of components that make up an item, arranged in whole-part relationship. The PRINCE2 project management method mandates the use of product based planning, part of which is developing a product breakdown structure.  In practice there is very little difference between a PBS and a WBS, both systems define the full extent of the work required to complete the project.

Bill of Materials (BoM)

Decomposes each tangible element of the project deliverables into its component parts and is often used for purchasing components.

Risk Break Down Structure  (RBS)

The risk breakdown structure (RBS) is a hierarchically organised depiction of the identified project risks arranged by risk category. The risks are placed into the hierarchical structure as they are identified, and the structure is organized by source so that the total risk exposure of the project can be more easily understood, and planning for the risk more easily accomplished.

Contract Breakdown Structure (CBS)

A hierarchal arrangement of head contractors, subcontractors, suppliers etc., to show the overall supply chain feeding goods and services into the project. The efficient functioning of the overall supply chain is critical for project success.

Aligning Cost Breakdown Structures and control Accounts 

As projects get larger it helps to have the overall budget broken down into smaller allocations. Cost accounts can be used to allocate the budget at a lower level and provide integration between the WBS and the cost control system. The budget is allocated to each cost account and the actual project expenses are reported at that same level.

Cost accounts can be established in different ways (not all of which tie into the WBS).

  • By WBS work package. Theoretically you could set up a separate cost account for each WBS element, but that does not make practical sense. Usually a number of work packages are assigned to a Control Account and cost management is undertaken at this level.
  • By resource type. In this approach, you may have a cost accounts for: internal labour, external labour, equipment, training, travel, etc.
  • By WBS by resource type. If you set up cost accounts for work packages on the WBS, you can also track the resource types within each work package. Each resource types can be tracked with sub-account numbers within the overall cost account (and consolidated separately is the code structure is consistent).

The more detailed your cost accounts are, the more work you will have setting up, allocating and tracking the cost account budgets, but the greater the potential for insight and control. For example, one area of the project could be over budget, but masked by another area that is under budget.

Probably the most significant element in applying Earned Value Management (EVM)[3] to a project is deciding the number and location of control accounts. How many? How large (budget)? Who will be the CAMs?

There is no clear cut process or algorithm. It depends on the work, the organization, the culture, the finance system, subcontract relationships, the scheduling system, the degree of risk in any one part of the project, the design for the WBS and OBS, and the project manager’s style and preference.

More Control Accounts means more EVM cost, more time collecting data, more detail, and maybe more accuracy. More Control Accounts also can mean more time spent in authoring, reviewing, approving, recording, and filing in forms.  Less Control Accounts means less EVM cost, less time collecting data, less detail, maybe more accuracy, fewer forms and less time processing those that remain.

So what is the right number of Control Accounts? It is a complicated and multidimensional problem with no ‘right answer’.  The only certainty is one size does not ‘fit all’ – pragmatic common sense is preferable to arbitrary rules.

Do all of these breakdowns really help? 

Traditional project management is based on these concepts.  However emerging disciplines, particularly complexity theory suggest that self organising systems such as a project team cannot be understood by studying the individual parts of the team[4].

As the late Douglas Adam once said “I can imagine Newton sitting down and working out his laws of motion and figuring out the way the Universe works and with him, a cat wandering around. The reason we had no idea how cats worked was because, since Newton, we had proceeded by the very simple principle that essentially, to see how things work, we took them apart. If you try and take a cat apart to see how it works, the first thing you have in your hands is a non-working cat.”

The way complex entities work cannot be understood by breaking them down into parts. Even at the simplest level, studying a fish cannot explain how a shoal of fish work; at a complex level understanding a project task in isolation will not explain the dynamics of a major project and its team of resources.

My personal view is the ‘breakdowns’ are still helpful ways to develop insights – but they no longer offer viable answers (if they ever did).  The path to increasing project success lays in the way the insights are interpreted and used within the complexity of a dynamic project delivery system.


[1] For a more detailed discussion see, The Origins of Modern Project Management:
http://www.mosaicprojects.com.au/Resources_Papers_050.html#Top

[3] For more on Earned Value Management see:

[4] For a brief overview of complexity see:
http://www.mosaicprojects.com.au/Resources_Papers_070.html

Source: Project Management Articles