Work Breakdown Structure Baseline

PM Milestone Project Management Templates

PM Milestone 7000 Business Templates

Get Instant Access

For quantitative estimating purposes, we need a target to shoot at. It is better that the target be a static target, not moving during the time of estimation. The scope captured on the WBS at the time estimating begins is the project "baseline scope." Baselines are "fixed" until they are changed. Changing the baseline is a whole subject unto itself. Suffice to say that once resources are assigned to a baseline, and then that baseline is changed, the task of the project manager and project administrator is to map from the RAM in the baseline to the RAM of the changed baseline. A common practice is to consider all resource consumption from initial baseline to the point of rebaseline to be "sunk cost," or actuals to date (ATD), not requiring mapping. Expenditures going forward are either mapped from the initial baseline, or the WBS of the subsequent baseline is re-estimated as "estimate to complete" (ETC). Total project cost at completion then becomes:

Cost at completion = ATD of WBS Baseline-1 + ETC of WBS Baseline-2

The practical effect of rebaselining is to reset variances and budgets on the WBS. The WBS dictionary may also be modified for the new baseline. Considering the need for cost and performance history, and the connection to the chart of accounts, there are a couple of approaches that can be taken. To preserve history, particularly valuable for future and subsequent estimations, WBS Baseline-1 may be given a different project account number on the chart of accounts from that assigned to the WBS Baseline-2. The cost history of WBS Baseline-1 and the WBS Baseline-1 dictionary can then be saved for future reference.

A second and less desirable approach from the viewpoint of preserving history is to make a lump sum entry into the chart of accounts for the ATD of WBS Baseline-1. Then WBS Baseline-2 is connected to the chart of accounts in substitution for WBS Baseline-1 and work begins anew.

t2]There is no single "right way" for constructing a WBS of a given project, though there may be policies and standard practices in specific organizations or industries that govern the WBS applied therein. The only rule that must be honored is that all the project scope must appear on the WBS.

t3]A brief but informative history of the development of the WBS, starting as an adjunct to the earliest development of the PERT (Program Evaluation Review Technique) planning and scheduling methodology in the late 1950s in the Navy, and then finding formalization in the

Department of Defense in 1968 as MIL-STD-881, subsequently updated to MIL-HDBK-881 in 1998, can be found in Gregory Haugan's book, Effective Work Breakdown Structures. [4]

[3]Haugan, Gregory T., Effective Work Breakdown Structures, Management Concepts, Vienna, VA, 2001, chap. 1, pp. 7-13.

[5]Rolling waves is a planning concept that we discuss more in subsequent chapters. In short, the idea is to plan near-term activities in detail, and defer detailed planning of far-future activities until their time frame is more near term.

[6]The WBS is covered extensively in publications of the Department of Defense (MIL-HDBK-881) and the National Aeronautics and Space Administration (Work Breakdown Structure Guide, Program/Project Management Series, 1994) as well as A Guide to the Project Management Body of Knowledge, [7] among others.

[6]A Guide to the Project Management Body of Knowledge (PMBOK® Guide) — 2000 Edition, Project Management Institute, Newtown Square, PA, chap. 5.

[8]Editor, MIL-HDBK-881, OUSD(A&T)API/PM, U.S. Department of Defense, Washington, D.C., 1998, paragraph 1.6.3.

[9]A Guide to the Project Management Body of Knowledge (PMBOK® Guide) — 2000 Edition, Project Management Institute, Newtown Square, PA, chap. 2.

[10]See A Guide to the Project Management Body of Knowledge [11] for a discussion of project management organizing ideas and matrix management. For a strongly "projectized" approach, the cost accounts will be in the project view, summed vertically, with "project" managers assigned. For an organizational approach to the project, the cost accounts will be in the organizational view, summed horizontally, with an "organizational" manager assigned.

[10]A Guide to the Project Management Body of Knowledge (PMBOK® Guide) — 2000

Edition, Project Management Institute, Newtown Square, PA, chap. 2.

Team LiB

< previous next ^

Was this article helpful?

0 0
Project Management Made Easy

Project Management Made Easy

What you need to know about… Project Management Made Easy! Project management consists of more than just a large building project and can encompass small projects as well. No matter what the size of your project, you need to have some sort of project management. How you manage your project has everything to do with its outcome.

Get My Free Ebook

Post a comment