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.
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.
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.
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 package is an important concept in project scope management and in the profession of project management, in general.
Avantika holds a degree in Journalism, & writes on such topics of interest as PMP, Digital Marketing, Six Sigma, & Big Data. She also maintains a travelogue, blogs on media issues, and volunteers at a boarding home for stray dogs. She enjoys art & travelling, & loves outdoor activities like basketball, athletics, & swimming.
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