by Joe Bauer
| December 28, 2016
One of the most frequently asked questions from new users is: At what level should I be estimating my project in TruePlanning®? To be clear, the question involves how detailed the product breakdown structure should be. The answers can vary widely, as seen in the two examples below for an aircraft.
Figure 1. F-22 template available in TruePlanning® 2016
Note: subassemblies collapsed to fit PBS onto one page.
Figure 2. F-22 estimated as one hardware cost object.
The preceding examples might be extreme ends of a spectrum. In the first example, we have provided a template in TruePlanning® 2016 that models a fighter aircraft with over 90 separate cost elements. In the second example, we are modeling a fighter aircraft as one component. Which one is best? Is there a middle ground?
The most appropriate level to estimate a project in TruePlanning® is driven by two factors: time and data. Time is simply the amount time the estimator can devote to the estimate. Data is the amount of information available, as well as the level and fidelity of that information. Obviously, the more time and data the estimator has, the more detailed the estimate can (and should) be. If the estimator only has top level data and very little time, the product breakdown structure will be at a macro level.
The choice, however, is not binary. Very often, estimates begin at a macro level. As time goes on, the estimate is refined and gains more granularity as cost objects are divided into subassemblies with smaller hardware cost objects below it. The “cone of uncertainty” should continually reduce over time, again, as more information is obtained.
One final consideration is the level at which estimate results will be reported. For example, using the MIL-STD 881C cost element structure, one may be required to report estimate results at a one-level, two-level, or some other designation. Obviously, reporting requirements may drive the need to estimate at a higher or lower level of fidelity.
To summarize my answer to the often asked question on PBS structuring, the estimator should expect to evolve the product breakdown structure as time and data allows. Confining oneself to a static structure from the estimate initiation limits the ability to take advantage of additional information as it becomes available.