Standardized WBS

Standardizing the WBS is considered a best practice because it enables an organization to collect and share data among programs. Standardizing work breakdown structures results in more consistent cost estimates, allows data to be shared across organizations, and leads to more efficient program execution. WBS standardization also facilitates cost estimating relationship development and allows for common cost measures across multiple contractors and programs. Not standardizing WBSs causes difficulty in comparing costs from one contractor or program to another, resulting in substantial expense when collecting and reconciling contractor cost and technical data.

The standardized WBS should support the engineering perspective on how the program is being built. The WBS should be a communication tool that can be used across all functions within the program. To foster flexibility, WBS standardization should occur at a high level—such as WBS level 3—so that lower levels can be customized to reflect how the specific program’s work will be managed. For high-risk or costly elements, however, management can make decisions to standardize the WBS to whatever level is necessary to properly gain insight. Thus, the WBS should be standard at a high level with flexibility in the lower levels to allow detailed planning once the schedule is laid out. Furthermore, the same standard WBS should be used for developing the cost estimate and the program schedule, and for setting up the EVM performance measurement baseline. Relying on a standardized WBS can enable program managers to better plan and manage their work and helps in updating the cost estimate with actual costs—the final step in our 12 steps to develop a high-quality cost estimate.

A standardized product-oriented WBS can help define high-level milestones and cost driver relationships that can be repeated on future applications. In addition to helping the cost community, standardized WBSs can result in better portfolio management. Programs reporting to a standardized WBS enable leadership to make better decisions about where to apply contingency and where systemic problems are occurring, like integration and test. Using this information, management can take action by adjusting investment and obtaining lessons learned. As a result, it is easier to manage programs if they report in the same format.

Appendix VI provides examples of standardized WBSs developed by government agencies and private organizations. The standardized WBS should be tailored to fit each program. In some cases, the element structure contains built-in redundancies that provide flexibility in accounting for costs. For example, logistics support costs could occur in either investment or operations and support. However, it is important that the element structure not double count costs that could be included in more than one cost element. While the structure is flexible, children should be assigned to only one parent.