Let us take a detailed look at the concept of a work package to understand it better.
What are work packages?
Work packages are the components that are the lowest in the WBS. During the construction of a Work Breakdown Structure through Decomposition, the deliverables are broken down into smaller pieces. This process of deconstruction continues until the deliverables are small enough to be considered ‘work packages’. Each of these packages should be small enough to estimate the duration and the cost. These packages can be scheduled, cost estimated, monitored and controlled.
Why are they important?
Work packages allow simultaneous work to be done on a project
Work packages allow for simultaneous work to be done on many different components of a project at the same time by multiple teams. Each team follows the tasks defined for the work package and completes them by the specified deadline.
Once the teams have finished their individual work packages, the whole project comes together with seamless integration. Completion of a work package is most often overseen by a specific person whether it is a manager, supervisor, team leader, or a designated team member.
Costs of activities can be aggregated to the level of work packages so that they can be measured, monitored and controlled.
Even though costs are estimated at an activity level, these cost estimates are aggregated to the work package level where they are measured, managed and controlled. For each work package we can determine the direct labor costs; the direct costs for material, equipment, travel, contractual services and other non-personal resources; and the indirect costs associated with each of these work packages .
The individual costs of all the work packages are then aggregated to arrive at the authorized cost baseline or the authorized budget for the project.
Earned Value Measurement
The performance of a work package can be measured by Earned Value measurement which is a commonly used method of performance measurement. It integrates project scope, cost and schedule measures to help the project management team assess and measure project performance and progress. It requires the formation of an integrated baseline against which the performance of the work packages can be measured for the duration of the project.
Earned Value Measurement develops and monitors three key dimensions for each work package.
1.Planned Value: Planned value is the authorized budget assigned to the work to be accomplished for the work package.
2.Earned Value: Earned value is the value of work performed expressed in terms of the approved budget assigned to that work for a work package.
3.Actual Cost: Actual cost is the total cost actually incurred and recorded in accomplishing work performed for a work package.
Variances from the approved baseline is also monitored.
Cost Variance: It is a measure of schedule performance on a project. It is equal to the earned value minus the actual costs. Equation: CV = EV – AC
Performance indices are also useful for determining project status Cost performance index: The cost performance index (CPI) is a measure of value of work completed compared to the actual cost or progress made on the project.
Equation: CPI = EV / AC
These calculated CV and CPI values for work packages are documented and communicated to stakeholders.
Schedule performance of the project can be measured at the level of a work package
Variances in schedule can be measured for every work package.
Schedule variance: is a measure of schedule performance on a project. It is equal to earned value minus planned value. Equation: SV = EV – PV
Schedule performance indices can also be determined for every work package
Schedule performance Index: The schedule performance index is a measure of progress achieved compared to progress planned on a project.
Equation: SPI = EV / PV
These SV and SPI values for each work package are documented and communicated to stakeholders.
Work Packages allow team members to have a clear understanding of their roles and responsibilities.
For instance, the responsibility assignment matrix (RAM) is a matrix based chart which is used to illustrate the connection between work packages or activities and project team members. On larger projects a higher level RAM’s can be used to define what a project team group or unit is responsible for within each work package. Also, a lower level RAM can be used within the group to designate roles, responsibilities and level of authority for specific activities.
Risks can be managed at the level of work packages in a Work breakdown structure
General guidelines for creating work packagesWhile decomposing a WBS to the level of work packages, the WBS nodes could be decomposed to ridiculously low levels, wasting time and actually making the project difficult to understand, manage and change .There are many things to be considered when deciding how far to decompose the WBS or how best to create a work package, but some of the factors to be considered are:
- Work Packages should be small enough to be estimated for time and cost.
- The project manager and the project team should be satisfied that the current level of detail at the work package level provides enough information to proceed with subsequent activities.
- Work packages should be small enough to be able to be assigned to a single person or a group who can be accountable for results.
- Although it varies by projects, most project managers concur that the 8/80 rule can be applied to measure a work package. This rule says that no work package should be less than 8 hours and greater than 80 hours.
- Work packages can lie at different levels in the WBS hierarchy. Project managers should not artificially force their WBS into a structure where all the work packages live at the same level in the WBS hierarchy .This results in many problems down the line, like forced detail where you could have monitored and controlled specific parts of the work at a higher level or not enough scrutiny when you really need it.
Sample: WBS with work packages defined at multiple levelsLet us take a look at the following sample to get a better understanding of work packages .In this sample, the WBS is decomposed to the level of work packages which are defined at multiple levels in the WBS hierarchy.
Thus, all deliverables in a work breakdown structure are decomposed until they are small enough to be considered as work packages. Work Packages can be scheduled, cost estimated, monitored and controlled. This process of decomposing the deliverables into work packages offers a lot of benefits to the project manager in the long run.
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Work package is an important concept in project scope management and in the profession of project management, in general.