by Laura Gurule
| August 10, 2016
While employed with the federal government as a cost estimator/analyst, I traditionally used a Work Breakdown Structure (WBS), more specifically, an 881C template, when doing a cost estimate. I was introduced to PRICE TruePlanning®, which uses a Product Breakdown Structure (PBS), a few years after I started with the Department of Defense as a Cost Estimator. Initial confusion and bafflement fell upon me—what is the difference and which breakdown structure should I use? My search for clarification created an opportunity to address this subject briefly in hopes that it helps others with the same questions and confusion I dealt with.
I will begin by explaining what a PBS is and how it is arranged in TruePlanning®. The PBS assists in reducing a main project product into manageable components. By using a PBS, the project manager and team can quickly gain a clear understanding of the product, its cost object components, and what activities and resources are required. In TruePlanning® the PBS comes in the form of a hierarchy wherein the Cost Objects are the basic building blocks for creating projects. A TruePlanning® Cost Object is defined by its set of Activities, Resources, and Cost Estimating Relationships. Each Cost Object functions as a predictive model which represents standard industry processes and activities. You can use the TruePlanning® PBS to assemble the Cost Objects (provided in the model) into a custom project representing the processes and activities of your organization.
The WBS, as defined by Project Management Book of Knowledge (PMBOK) is “a deliverable-oriented hierarchical decomposition of the work to be executed by the project team to accomplish the project objectives and created the required deliverables.” It is a cost estimating framework with a strong focus on labor, engineering, and hourly wages and is organized functionally, with four levels. It begins with the name of the project at the top level, then the phases such as planning, implementation, monitoring and control, etc., then the work package which is described as being the level where in the schedule, cost estimate, monitoring and control are managed. As previously mentioned the WBS is a more traditional approach, particularly in the Department of Defense wherein the 881C templates are is available to the cost estimator.
The main difference between PBS and WBS is that the PBS starts with the Cost Object (what is produced), the Activities (what is the work/task being done) and the Resources (what you spend money on when performing activities (labor/material). These elements entail the physical, conceptual, or functional elements of your product. WBS, on the other hand, incorporates the necessary data and service elements along with the physical product elements that the PBS provides. The bottom line is that the PBS focuses on the product whereas WBS focuses on the work required in a project.
The biggest challenge/problem I encountered in making the crosswalk from my PBS to WBS is that there was little information available to guide me through the process. Upon researching the differences, I learned that a PBS element is a “noun”, while a WBS element is a “verb”. The question of how do I export a noun into a verb or vice versa, what extremely consuming. These two challenges/problems, alone, were enough to deter me from actively trying to set up my cost estimates using a PBS. When I started using TruePlanning®, I was forced to figure this out…with the help of the PRICE Systems team, I was able to muddle through the process. I was excited and relieved when they introduced me to their software application, TrueMapper®, the effort of mapping the PBS to the WBS was a much easier undertaking. In addition to solving the challenge with exporting, when I begin exporting items from my PBS to the WBS, TrueMapper® helped me recognize items I might have missed.
TrueMapper® allows you to define a relationship between the PBS and a user defined view such as your WBS by assigning specific cost objects, activities, and resources to individual WBS elements. Ultimately, the breakdown structure your organization prefers is the one that is most suitable for you, the cost estimator. The advantage to using TruePlanning® is that with the release of TruePlanning® 16.0 and TrueMapper® 16.0, which includes 881C WBS templates, makes the effort of mapping the PBS to the WBS an even easy undertaking.