Resource Breakdown Structure

Resource Breakdown Structure

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) deliverable's 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.
In project management, the resource breakdown structure (RBS) is a hierarchical list of resources related by function and resource type that is used to facilitate planning and controlling of project work.[1] The Resource Breakdown Structure includes, at a minimum, the personnel resources needed for successful completion of a project, and preferably contains all resources on which project funds will be spent, including personnel, tools, machinery, materials, equipment and fees and licenses. Money is not considered a resource in the RBS; only those resources that will cost money are included.[2]

Assignable resources, such as personnel, are typically defined from a functional point of view: "who" is doing the work is identified based on their role within the project, rather than their department or role within the parent companies. In some cases, a geographic division may be preferred. Each descending (lower) level represents an increasingly detailed description of the resource until small enough to be used in conjunction with the work breakdown structure (WBS) to allow the work to be planned, monitored and controlled.




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

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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!