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Project Breakdown Structure: More Than Your Average Work Breakdown Structure

Running large, complex projects is challenging with the increased number of tasks, costs and risk associated with it. Many companies need an efficient way to manage the operations and financials of their projects to maximize performance. Simply, using a work breakdown structure (WBS) to manage everything is not the way to run a company.

While many project managers use the term Project Breakdown Structure (PBS) and WBS interchangeably, they are not the same. Using the WBS as both the financial and operational hierarchy of a project is a major project governance flaw for project-based companies.

It’s important to detach the cost and work breakdown structure, especially for big, complex projects. If your project involves thousands of tasks, it will get to a point where it becomes impractical to manage the project financials based on the schedule. This is the point where you need to employ a cost breakdown structure (CBS) parallel to your WBS.

The PBS provides yet another level of hierarchy for which to manage large projects.

Download the Project Breakdown Structure feature brief to learn more and discover what it can do for your company.

Let’s break it down further.

WBS:The WBS only refers to the operational side of the project, with its primary purpose to plan the schedule for each project. In a WBS, each task duration is planned in conjunction with its required predecessors and following tasks. The WBS then provides an overall plan so that the project manager can see how the project should progress and manage the workflow appropriately.

CBS: The CBS represents the costs of the components in the WBS. It’s a critical tool in managing the project lifecycle, especially the financial aspects of any project by creating a structure for applying measurable cost controls. The CBS is required for any project-based company to appropriately manage the financial aspect of any project. Oftentimes, the CBS is missing completely in most project tools including project management, scheduling and ERP software. If a CBS is used, it’s typically created and managed in a spreadsheet.

PBS: The PBS incorporates both the operational (WBS) and financial (CBS) aspects of many projects in one project super-structure. The PBS manages the connection between the WBS and CBS, giving you the option to create more embedded projects that sit underneath a Parent Project, each having their own WBS and CBS. This hierarchical structure enables you to manage costs at an appropriate level and create meaningful, real-time financial analysis at any level or for any portion of the project while keeping it connected to the overall project.

Make Your Large Projects Easier to Manage

The PBS allows project-based companies to take their massive projects and break them down into more manageable components that can be run concurrently by separate project teams or managers. This means different departments and divisions can independently manage their own project components, while creating more transparency and accountability across the entire project for greater control.

A large project can be broken down into any number of embedded projects that each has its own WBS and CBS, including its own team, budget, timeline, resource pool, risk register, KPIs and more. Each embedded project automatically rolls up into a WBS title task and CBS title account in the Parent Project above it for higher-level visibility. This structure makes managing a large project significantly easier, enabling project-based companies to deliver more projects on time and on budget.