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Project Planning guidelines

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Guideline 1 – Define Work Scope (WBS)

a) Define the authorized work elements for the program. A work breakdown structure (WBS), tailored for effective internal management control, is commonly used in this process.

Define the authorized work elements for the project, as a Work Breakdown Structure (WBS) for effective management control. Each WBS element should represent a deliverable/asset/system required to make the project successful, i.e. assets required in the establishment of a functioning asset.

A Work Breakdown Structure (WBS) is a direct representation of the authorised scope of work of the project, documenting the hierarchy and description of the tasks to be performed and their relationship to the product deliverables. The WBS breaks down the scope into appropriate elements for planning, budgeting, scheduling, and cost control. The WBS should be extended to the level necessary for management action and control based on the complexity of the work. At a minimum, the WBS is extended to the level(s) at which Control Accounts are established for control purposes. A WBS dictionary is typically used to define the work scope for each unique element in the WBS.

Guideline 2 – Define Project Organization (OBS)

b) Identify the program organizational structure, including the major subcontractors responsible for accomplishing the authorized work, and define the organizational elements in which work will be planned and controlled.

The Organizational Breakdown Structure (OBS) displays the resource pool from which the project organization is assigned. It requires the same type of precise definition as the WBS and should include identification of contractors/sub-contractors or the work groups of a project.

Assign organizational responsibility for the project work. An OBS is used to facilitate the assignment of responsibility, accountability, and authority for all the work elements to be performed. An OBS is a direct representation of the hierarchy and provides a description of the organization established to provide resources, as well as to plan and perform the work tasks.

The OBS identifies the organization responsible for each segment of work, including subcontracted and intra-organizational effort. The assignment of lower-level work segments to responsible managers should provide key control points for management purposes. When effort is contracted, the applicable contractor is identified and related to the appropriate WBS element(s) and/or organization charged with acquiring the contracted item.

Guideline 3 – Integrate Processes

c) Provide for the integration of the company’s planning, scheduling, budgeting, work authorization and cost accumulation processes with each other, and as appropriate, the program work breakdown structure and the program organizational structure.

The integration of planning, scheduling, budgeting, work authorization, and cost accumulation management processes provides the capability for establishing the Performance Measurement Baseline (PMB), identifying work progress, and collecting actual costs, facilitating management analysis and corrective actions. The WBS and OBS allow summarization of cost data from the detail level through both the WBS and the OBS to the appropriate project level needed for management insight and control.

Guideline 4 – Identify Overhead Management

d) Identify the company, organization, or function responsible for controlling overhead (indirect costs).

Visibility into direct and indirect costs is essential for successful management of a project. Therefore, it is important to have a documented process and organizations established specifically to manage and control indirect costs.

Indirect costs are for common activities that cannot be identified specifically with a project/activity and should typically be budgeted and controlled separately at the functional/organizational manager level. Clearly identify managers who are assigned responsibility and authority for controlling indirect costs, and who have the authority to approve expenditure of resources. The process for management and control of indirect costs, including assignment of responsibility, is typically documented in the organization’s approved accounting procedures.

Guideline 5 – Integrate WBS/OBS to Create Control Accounts

e) Provide for integration of the program work breakdown structure and the program organizational structure in a manner that permits cost and schedule performance measurement by elements of either or both structures as needed.

The careful establishment of the control account structure ensures the proper level of management is established based on the complexity of the work and the capability of the organization. It also establishes the lowest level of performance measurement necessary for program management.

The Control Account is the point where the WBS tasks and OBS responsibility intersect. It is defined as the point where a single functional organization or integrated product team has responsibility for work defined to a single WBS element. There may be multiple Control Accounts assigned to an OBS element.

The establishment of multiple Control Accounts should be determined with consideration for planning and control of budgets, schedules, work assignments, progress assessment, problem identification, and corrective actions.

The Control Account is also the primary point for work authorization, work performance management, and work performance measurement; i.e. where Planned Value is established, Earned Value is assessed, and Actual Costs are collected.

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