Organization Breakdown Structure (OBS)

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Organization Breakdown Structure or OBS is a hierarchical model describing the established organizational framework for project planning, resource management, time and expense tracking, cost allocation, revenue]]/profit reporting, and work management. The Organization Breakdown Structure groups together similar project activities or “work packages” and relates them to the organization’s structure. OBS is used to define the responsibilities for project management, cost reporting, billing, budgeting, and project control. The OBS provides an organizational rather than a task-based perspective of the project. The hierarchical structure of the OBS allows the aggregation (rollup) of project information to higher levels.[1]

An organization breakdown structure (OBS) is a tool used in project management to define the hierarchy of an organization. It is also known as a work breakdown structure (WBS). The main purpose of an OBS is to provide a clear and concise view of all the tasks involved in a project, who will be doing them, and what deliverables are expected at each stage.

The OBS can be used for projects of any size or complexity, and it is especially useful for large projects with many stakeholders.

An OBS is a valuable tool for project managers because it helps to:

  • Define the scope of a project
  • Identify who is responsible for each task
  • Understand the interdependencies between tasks
  • Plan and schedule tasks more effectively

What is Organization Breakdown Structure (OBS)?

An Organization Breakdown Structure (OBS) is a hierarchical tool used to organize and relate project activities to an organization's structure. OBS provides a way of breaking down complex projects into more organized representations, allowing for the appropriate resources and responsibilities to be assigned. The hierarchical nature of OBS helps improve communication and coordination between departments, while also improving productivity. It can be used in budgeting, billing, control, and other areas of project management as well. Further examples, processes, templates, PMP applications, construction uses, and automation tools are available for those wishing to learn more about how OBS works.

What are the different uses of OBS?

1. Identifying project control requirements

It is important to identify project control requirements when using OBS so that the software can be used effectively. This includes scoping the project management environment and key stakeholders, developing an effective execution strategy, as well as linking the WBS to the OBS and creating responsibility assignment matrices. Identifying these requirements ensures that all project information is properly organized and tracked from start to finish for best performance.

2. Developing the organization breakdown structure (OBS) for the project

It is important to develop an OBS for a project in order to ensure that all departments and team members involved are properly organized and assigned tasks. The OBS will also help determine the relationships between departments and members, as well as provide more transparency and coordination within the project team. By creating an OBS from the most responsible department down, with performing departments filling in the gaps, it will ensure that no tasks are missed out on or overlooked. Finally, creating a Responsibility Assignment Matrix which lists all tasks and their assigned parties is essential for successful project completion.

3. Developing the responsibility assignment matrix

The purpose of the Responsibility Assignment Matrix is to provide a tabular format which can be used to illustrate the relationships between different tasks and their assigned responsibilities. This can help organizations understand how specific tasks are delegated among various stakeholders, as well as what costs may be involved in completing those tasks.

4. Linking the OBS and the WBS

The purpose of linking the Organization Breakdown Structure (OBS) and the Work Breakdown Structure (WBS) is to provide a better framework for managing and organizing projects. By connecting the OBS, which focuses on the micro perspective of a project, with the WBS, which captures all elements in an organized manner, it allows for powerful analytics to be performed. The link also allows for project responsibilities to be defined by deciding which organization performs each work package.

5. Optimizing the WBS, OBS and the Control accounts

The optimization of the WBS, OBS, and control accounts is an essential part of project management. It is important to ensure that all work packages are properly organized and allocated with the right resources in order to complete tasks on time and within budget. Optimizing these organizational systems helps to accurately align a project's scope, schedule, and cost which can result in ultimate success for the entire endeavor. Optimization also helps teams make well informed decisions about objectives needed for successful completion by providing clear guidance on responsibilities throughout the process.

6. Scoping the project management environment and key stakeholders

It is important to scope the project management environment and key stakeholders before beginning a project in order to gain an understanding of the context within which the project needs to be completed. This knowledge can help identify potential conflicts, determine what goals need to be achieved, develop an Organization Breakdown Structure (OBS) tailored for the given project, ensure proper management of the project that meets all control requirements, link OBS with WBS, develop RAM and optimize WBS, OBS and Control accounts.

7. Developing the project execution strategy

It is important to develop a project execution strategy in order to properly manage and control a project. This strategy helps to mitigate interface and timing risks, optimize the OBS, assign responsibilities, make informed decisions about which methods to use during the project, reduce delays and penalties by learning from other project managers' experiences, shorten the schedule by distributing work across multiple teams, reduce risks by addressing most issues upfront and ensure success through implementation of a good execution strategy.

See Also