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Slicing and Dicing Your Data for TOC

By PRICE® Customer Success TeamMay 19, 2020

In a previous blog, we introduced the relationship between three “breakdown structures” commonly used in project management, and how cost estimates are linked to them and aid in their usefulness. In this blog, I’ll dig further into these relationships, and explain their impact on my Total Ownership Cost (TOC) solution in TruePlanning.

Let’s use an example of an aircraft being built for the Army. In this hypothetical example, the prime contractor is Boeing, and they have different departments working on various parts of the aircraft. Department 10 is responsible for the wings and the tail section of the aircraft.

Each slice in this direction represents an OBS “group”. If a person in charge of Dept. 10 wanted to examine this cost estimate and only see what Dept. 10 is involved in, they can view that slice of the cube. In this slice, you can see the WBS and CBS sections for the wing and the tail. You can view budgets and cost estimates for wing and tail components, and look at specific wing and tail deliverables.

The Dept. 10 user can get a complete view of the project from their perspective quickly and easily. Other departments would have this same capability, and Boeing as a whole could look at a larger slice that contains Dept. 10 and more. Any “group” could get a customized view.

You can also take a slice for any CBS element, such as Development Engineering. All information about the WBS tasks requiring development engineering, and which OBS groups are doing the work are available in this view. This is great for planning, budgeting and program execution and management, as you can examine any cost category (which often have separate budgets and dedicated managers) at the level of detail that’s right for you.

If you take a slice of the cube representing a specific WBS element, such as the Airframe, you can see how the funding is allotted for developing and producing the airframe, and which groups in your organization are doing the design and production work for each piece. Also, early on you can do quick and easy analysis of alternatives by substituting a WBS element with an alternative solution.

Assessing Total Ownership Cost (TOC) is a requirement for all major programs in the US DoD. This means each program cost estimate has a large set of stakeholders spanning multiple government and private organizations. The ability to slice and dice a TOC estimate to best suit any stakeholder’s point of view is crucial for informed decision-making. Using this structure ensures everyone has the same information, tailored to meet their needs. As a cost researcher at PRICE, these ideas have a major impact on the design of our solutions.