Budgeting Best Practices Part 3 of 6

Part 3: Create WBS


Determining your project budget has been discussed several times on this website. The reason is that many projects experience budget overruns. Many project managers are still having problems determining a good project budget. Based on these facts, I decided to run a series on budgeting best practices for the rest of this year.


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Step 3: Create WBS

In step 2 you defined your scope. The scope can be just one paragraph saying what has to be done. a one paragraph statement can be difficult to schedule and cost. So for practical reasons you have to breakdown your scope into smaller steps, you have to create a WBS (Work Breakdown Structure).

For example if you have to build a highway. What steps do you have to take to complete this project? Steps in building a highway could be:

  • Preparation Work
    • Survey
    • Clearing
    • Leveling
  • Construction
    • Gravel layer
    • Sand layer
    • Asphalt layer
  • Finishing
    • Lights

Note: this highway example is taken from my eBook Project Management Quick Start

WBS Best Practices

  • Your WBS elements should be tangible deliverables. Tangible deliverables are easy to schedule and to cost and will help you when doing your Earned Value Management later in your project.
  • The best way to create a WBS is to take your scope and then do a “mental work through” of all the things (tangible deliverables) you need to do to realize the project.

Next Steps

In Part 4 and 5 of this series (Schedule and Budget) you will then be able to schedule and cost each of the activities you have described in your WBS.


Related References

Budgeting Best Practices Part 2 of 6

Budgeting Best Practices Part 1 of 6

Determining Your Project Budget

Scope Control Best Practices

Project Management Quick Start

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