Resource Breakdown Structure - how to get your project done!

Resource Breakdown Structures (RBS) at a project definition level are very often overlooked, however the simple process of creating an RBS is a good way to structure the development of how you are going to get your project delivered successfully.  Read on…


The Resource Breakdown Structure for a project should be considered similar to a Work Breakdown Structure, but the RBS focuses on the resources needed to deliver the project.

The Work Breakdown Structure (WBS) identifies how the project’s deliverables can be structured into groups and broken down to a level of detail suitable for defining the project scope and for controlling project workflows.

Having established what needs to be done (WBS), we also need to establish the resources needed to deliver all the work packages.  All ‘resources’ have a cost associated with them, so it’s easy to see that by identifying the resources needed and the respective quantities required to deliver the project’s scope, we are working towards establishing a base cost for the whole project.



Project ‘Resources’

A RESOURCE is any ‘physical’ or ‘virtual’ entity of limited availability that needs to be consumed to obtain a benefit from it.Source Wikipedia.

We are only going to consider ourselves with ‘physical’ resources, and we are also going to assume ‘skills’ are physical resources, since skills are manifested in people, who are ‘physical’ entities.  Those delivering the project will be anyway!

There are three main types of resources to consider when developing our Resource Breakdown Structure:

•    People
•    Materials
•    Equipment

At the end of the day, in the early 21st Century: projects are delivered by PEOPLE using EQUIPMENT to work, form or assemble MATERIALS into the tangible (measurable) deliverables defined by a project’s scope.

It’s worth noting that not all resource types above are needed for all projects.  An IT project, for example, may need to deliver a software solution.  Hence the delivery of that project will mainly involve people developing software by using equipment (computers), hardly any material resources will be required.


PEOPLE – it’s pretty obvious what this type of resource is, but the type of person you will require will depend on the skills needed, so it’s common to think of human resources in terms of skills and skill sets.

MATERIALS – are those physical items to be used to produce, or incorporate within the tangible deliverables required by the project.  By ‘used’ we refer to component items at some level, for example: steel, concrete, lights, wood, cables, paint…

By ‘incorporate’ we refer to assembled or manufactured items needed as a project deliverable.

How you think of a material item will depend on where in the project’s organisational structure you are.  If I am part of a managing contractor’s team and we are responsible for free-issuing items to a workface for others to install and connect up, then a material item could be something like a computer hardware package or a steam boiler.  No need for me to worry about what needs to be done in order to produce these items, that’s the supplier’s responsibility.

Likewise, a material item could also be a service-based contract: we’ll need to place a contract for someone to connect up the computer hardware package or the boiler.  It’s a definable work package with a scope associated with it.

Now, if I was part of the project team responsible for supplying the steam boiler, the ‘materials’ I would have to consider would comprise steel plates, valves, burners, tubes, control panels etc.



TIP! So it’s important to think of MATERIALS resources ONLY at the level of detail with which you are engaged in the project.  Though it is important that somewhere in the project supply chain, the more higher levels of detail are being managed properly.



EQUIPMENT – is used by the ‘people’ to bring all the ‘materials’ together which constitute the tangible deliverables of the project - “the tools of the job”.  Examples here might be: cranes, welding sets, computing time, access equipment, mobile offices…



The Resource Breakdown Structure, then, is a means of organising and structuring the resources required of a project in a hierarchical manner, and can be represented in tree-diagram manner similar to that of a WBS.









You will notice from the two examples the hierarchical nature of the Resource Breakdown Structure.  Each resource type (node) is also allocated a unique identifier code.  Since later we will be assigning quantities and cost rates to each resource type, it makes sense to assign a unique code to each resource type.  In the examples we have used a simple hierarchical numbering system.


How far do you continue breaking down resources?

The simple answer!  Only produce your Resource Breakdown Structure to a level of detail required to efficiently and effectively control the areas of the project you are responsible for, or to allow you to estimate resource quantities within the level of accuracy required.

Others will need to breakdown resource levels further, but they, like you, will only need to produce their Resource Breakdown Structures to levels of detail reflecting their effective control of those work packages they are responsible for.

And so on…the detail increases as needed, all the way down the project supply chain.

IMPORTANT! Someone somewhere on the project has to have the finer detail covered!



Link to the Project Budget Cost.

Having developed your Resource Breakdown Structure reflecting the level of the project you are managing, your next step will be to assign cost rates for the lowest level resources of each branch in your RBS, that is, how much will each unit of resource cost the project?

CAUTION! These values can be taken from a variety of sources, but be conscious of their differing levels of accuracy depending where you obtained the data from.  Sources could be:

•    previous similar projects
•    published industry norms
•    previous quotations for similar items
•    budget quotations sought for this project

If in doubt, consult someone with experience in this area.  Contact us if you are unsure of how to make use of your existing information without introducing budget risks to your project.

It should now be quite clear that as the project definition work proceeds and the work packages associated with the Work Breakdown Structure get quantities of RESOURCE allocated to them, it is straightforward to calculate the estimated cost of a work package, and subsequently build up the overall estimated cost for the project as a whole.

WBS (the deliverables) + RBS (the resources) = total project direct cost



Conclusion

So now you’ll appreciate what a Resource Breakdown Structure is and how an RBS, at the project definition stage, is a great way for structuring your project planning around the development of your human resourcing strategy and your outsourcing and procurement strategy.

Developing a Resource Breakdown Structure forces you to consider the skills needed to deliver the work packages identified by the WBS, whether they are available within the existing team or not – but they will be needed!  This then drives the outsourcing and procurement strategy for the project, an important element of the overall project management execution plan.

Producing a Resource Breakdown Structure further forces you to consider how best to procure your materials and materials related services, which is also part of formulating your procurement strategy and overall project management execution plan.

And a little bit later on…

By being able to assign the resource requirements to relevant activities within the project scheduling system, you are able to resource schedule the timeline and understand how to make most efficient use of resources in delivering the project.

Using associated resource costs, you will also be able to understand the cost profile of work packages and the project overall, which drives the commitment and cash flow requirements for the project – important for controlling the project!



Should you feel you would benefit from further advice on developing your Resource Breakdown Structure or understanding the accuracy of costs used within it.

Then please get in touch for a fully confidential discussion, at no cost or further obligation to yourself. We are passionate about Best in Class Project Management and Project Delivery, and seek to help others achieve success in the delivery of their projects.

So why not drop us an initial line via our Contact Us page? We are here, ready to listen and share.



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