The Complete ‘Breakdown Structure’ Guide: PMP Exam Concepts

breakdown structure guide for PMP exam prep concepts

If you are preparing for your PMP exam, this one’s for you.

Does RBS stand for ‘Resource Breakdown Structure’ or ‘Risk Breakdown Structure’?

There are plenty of breakdown structures you need to study for the PMP exam.

And one of the confusing aspects is the acronyms that float around.
These are various Hierarchical Chart types of Data Representation Format.

In this short guide, you will learn about each one of these in its own context.

by the end of this article, you would have mastered all the breakdown structures needed for PMP exam preparation.

And some more, maybe. 😀

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We will look at 6 of them:

Organizational Breakdown Structure (OBS)

This is part of the Integration Management Knowledge Area (study notes here).

OBS is a hierarchical model that shows your organizational framework for planning, allocation, management, and reporting of resources, work, costs, and revenue.

Here as well we have OBS at two levels –

  • project organization
  • performing organization

Your project may have internal stakeholders across different departments, business units, cost centers, or operational units. Everyone on your team needs to understand their positions in the organizational structure, expectations from them, and their contribution to the project.

Here’s a representation of the OBS by uplandsoftware.com

Organizational breakdown structure OBS

Figure 1: Organizational breakdown structure example

This information is visually shown using the OBS.

The project activities or work packages from each department, BU, or team are listed in this chart.

Work Breakdown Structure (WBS)

The PMBOK defines WBS as “WBS is designed to show how project deliverables are broken down into work packages and provide a way of showing high-level areas of responsibility.”

WBS is typically part of the Scope Baseline, along with its associated WBS dictionary, which is used as a basis of comparison.

A WBS typically has two types of ‘packages’:

  • Work package
  • Planning package

A work package is the lowest level of the Work Breakdown Structure, with an identifier that is unique across the entire WBS.

These identifiers provide a structure for the hierarchical summary of costs, schedule, and resource information in the project. Every work package is part of a higher-level entity called a Control account, which is a management control point.

A Planning package, on the other hand, is a WBS component below the Control account and above the Work package with known work
content but without detailed schedule activities. As the name suggests this is used for planning purposes.

When you complete the work from all of the Work packages, you can be certain that all of the documented requirements have been implemented.

Here’s an example of WBS from workbreakdownstructure.com

Deliverable based WBS

Figure 2: Example of Deliverable-based WBS

You can base your WBS in terms of project phases, or deliverables. This classification is done in the first level of the WBS itself.

And this forms the basis for further breaking down into multiple lower levels.


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Product Breakdown Structure (PBS)

Product Breakdown Structure is defined as a hierarchical visual representation capturing a project’s physical products that are necessary to deliver success.

PBS starts with the final deliverable, which is then broken down into a hierarchical structure to the smallest products that start the chain. It helps to understand the product flow and thus, leads to a more complete project plan.

Here’s a sample PBS from productbreakdownstructure.com:

product breakdown structure

Figure 3: An example of Product Breakdown Structure

The primary difference between PBS and WBS is that the Product Breakdown Structure shows the output of Scope Management, and the Work Breakdown Structure shows the work required to produce those products.

In PBS, the differentiation between internal products and external products is clearly made. The former type of products are those created by the product team and the latter one is either supplied by another project team or an external vendor.

Resource Breakdown Structure (RBS)

The Resource Breakdown Structure is a hierarchical list of teams (that is, people) and physical resources (equipment, servers, machinery, etc) related by resource category and resource type. that is used for planning,

RBS is a great tool for planning, managing, and controlling project work.

This is one of the outputs of the Estimate Activity Resources process.

Here’s an example of a Resource Breakdown Structure –

resource breakdown structure

Figure 4: Example of Resource Breakdown Structure (courtesy: online.visual.paradigm)

Each of the lower levels in the hierarchy represents an increasingly detailed description of the resource – until the information is small enough to be used in conjunction with the work breakdown structure (WBS) to plan, allocate, monitor, and control each of the identified project activities.


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Risk Breakdown Structure (RiBS)

A Risk Breakdown Structure is a hierarchical breakdown of all the identified that can impact the project’s scope, schedule, and cost. The risks can be internal to the project or external, identified, or even unforeseen!

Risk management is the responsibility of each and every stakeholder, including the sponsor and customer.

For a comprehensive RBS:

  • Identify categories of risks, such as technical, organizational, or external – while ensuring that these are not overlapping areas.
  • Get the key stakeholders and risk management experts to identify the risks in these
  • At regular intervals have risk assessment meetings with the team and identify any new types of risks

Here’s an example of a Risk Breakdown Structure:

Risk Breakdown Structure

Figure 5: Example of Risk Breakdown Structure (RBS) – courtesy, fool.com

RBS can be used in:

  • Risk identification exercise
  • Risk response analysis
  • Risk related reports
  • Post-project review and retrospection exercise

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Cost Breakdown Structure (CBS)

A Cost Breakdown Structure is yet another way of a hierarchical representation of the project, and this one focuses on the different cost components of the project.

This is a valuable tool when identifying and managing the items on a project budget and helps apply measurable cost controls. The Cost Breakdown Structure represents the costs of the components in the Work Breakdown Structure (WBS).

Here’s a sample Cost Breakdown Structure diagram from sciencedirect.com

cost breakdown structure

Figure 6: A sample Cost Breakdown Structure

To create a CBS, you identify the major types of costs such as research costs, production costs, operations costs, and so on. Then break it down into further classification that makes it easier to identify, manage, control, and report them.

Usually, the lowest level of this chart can be assignable to a team or team member.

Summary

On the PMP exam, it is not uncommon to confuse various breakdown structures.

I hope this article has made it clear as to which is what. 😀

If you have any questions, drop them in the Comments.

And if you are getting closer to your already scheduled PMP exam, I highly recommend going over this unique FAQ page to nail a few mission-critical PMP concepts.

Hero photo courtesy of cottonbro studio.

 

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