WBS is already being used at Enexis as a way to subdivide the work that is needed for a project. From the literature, some important aspects that a WBS should have, or how a WBS should be designed, can be defined. In Appendix V, the aspects that are mentioned and explained in this paragraph can be found. The appendix shows the list of aspects, combined with a table that shows which authors mention which aspects in their literature.
Structuring the WBS
First of all, the WBS should be easy to understand (Kerzner, 2001). To make sure that it is, it should fit the way work on a project is done. Work performed, budgeted and scheduled is literally translated into the WBS.
By ‘summarizing’, it is meant that “the content and resource requirements of a work element are the sum of the activities and resources of related sub elements below it” (Sullivan et al., 2009). By mak- ing sure the WBS is designed like this, it can be provided that any level of the WBS also shows the costs of all elements below it. This ensures cost account traceability: each lowest subdivision will have a number of accounting codes, adding up to collect costs for each level (Heinze, 1996).
The explanation of the structuring of work states that accounting codes help to summarize costs. Therefore, each element in the WBS should have its own activity code. This code also shows in which level the activity is subdivided: usually, the level is equal to the number of characters indicating the element of work (Sullivan et al., 2009). How this works, is shown in figure 4.1.: each lower level has an additional number added. According to Oberlender (2000), code numbers help to use the WBS as the basis of a Project Management System: coding does not only make it possible to relate the breakdown of work to the breakdown of costs, but also to the organizational breakdown, so it can be used for the management of people and time (schedule).
• Each element in the WBS should have an activity code, these code numbers relate the WBS to costs
Figure 4.1.: Coding of elements within different levels of the WBS
Apart from the activity coding, figure 4.1. also shows how a WBS structure is build up: it goes further into detail for each lower level of elements. Kerzner (2001) and Turner (1993) emphasize that each element of work can only be assigned to one level of effort, and no more. Each of these work ele- ments have to be defined well, in terms of work definition as well as accountability (Heinze 1996).
• By providing an increasing level of detail, the WBS makes sure that each major and minor activity is accounted for; each item should be clearly and completely defined.
Work Packages
Clearly defining the activities needed helps to distinguish each work package (WP) from another. As stated before, the work package level is the critical level for managing the work. Therefore, WPs should be a natural subdivision of cost accounts, making managing the work easier (Kerzner, 2001). More importantly, WPs should specify the work budgeted in measurable units, like monetary terms or man hours: they are defined by their output, or the specific product that completes the task. The- se are called deliverables, or milestones, as mentioned before. Milestone planning helps to show how the individual deliverables help to reach the ultimate project objectives, setting a stable frame-
• Work packages show a natural subdivision of cost accounts and effort planned. They must have a definable deliverable that must be generated for the task to be completed.
While it is important that work packages show a natural subdivision, it is also advisable to make the WPs relatively short, for then little assessment of work-in-progress (which is difficult and time con- suming to measure) is needed. Arbitrary cutoff points that subdivide the work to a level as low as possible, are however undesirable, for they will make the system unnatural and more difficult to use (Kerzner, 2001; Oberlender, 2000). As an ideal measure for WPs, Kerzner (2001) mentions 80 hours or less than 2-4 weeks, while also stating that WBS elements at the lowest control level (which may or may not be the WP level) should range from 0.5 to 2.5 percent of the total project budget. In terms of time, every WP should have a definable beginning and end. At the same time, all work elements at a given level, and therefore all work packages, should be comparable in terms of both time and money (Kerzner, 2001; Heinze, 1996).
• Work packages should be relatively short, so that little or no assessment of work-in- progress is needed. They are comparable in terms of size, with a defined duration.
Levels of the WBS
So, we established what Work Packages should look like and at which levels they should be defined. There are, however, also guidelines for the number of levels a WBS should have in total. If the WBS does not have enough levels, the integration of activities becomes difficult, but when there are too many levels, unproductive time will be spent on controlling them (Kerzner, 2001). To make sure the WBS is designed properly, the lower level items should be reviewed: are they both necessary and sufficient for completion of the decomposed items (PMI, 2000)? Controlling at a high levels means costs can get out of hand before they are recognized.
• The amount of levels should fit the project: too many levels means too much time is spent on control, while too few levels make it hard to act timely in case of cost overruns
The higher (upper three) WBS levels are usually controlled by project managers. These managerial levels of a project are expected to be the same for all similar projects, and therefore, standardized methods may be used for these levels, making parts of the WBS reusable. Lower levels should be more project-specific, and responsibility over these levels should be clearly defined and communi- cated. As a matter of fact, it should be very clear for each item in the WBS who is responsible and accountable for them. “Doers” and “planners” must be in agreement about how the work is divided. For each work package, responsibility can be given to an individual party in the project team. Recog- nized experts on each item should be given this responsibility by project managers, preventing pro- ject managers having to tell people more technically skilled than themselves how to do the work.
• Higher levels of the WBS are controlled by the project managers, and can be reused if they are standardized. Lower levels should be more project-specific, and responsibility over the work needed for those levels should be clearly assigned and communicated.