Project Management

In the case of organizations or companies that earn their
money through project work, profit would be another necessary
component of the project estimate, although not expected to be
spent!

Other Nifty Uses for the WBS

Remember our discussion on nifty uses for the WBS? Well, here
are two more. The WBS can be used as an estimating work-
sheet and as your primary structure for displaying the break-
down or allocation of costs within the overall project budget.
Let’s examine both uses.
Figure 7-13 illustrates how the WBS can be modified to cre-
ate a fill-in-the-blank worksheet for estimating costs. Its greatest
beauty lies in the way it helps you capture the types of project
costs, as described above.

Figure 7-14 illustrates how the WBS format serves as an
excellent way to show the breakdown of costs. This example
takes the WBS to level 3. You’ll have to use some discretion in
determining whether this is more detail than your management
or stakeholders wish to see.

What About Project Management Software?

I’ve included this topic because it’s obviously important.
However, I’ve put it at the end of this chapter for a reason. I
believe there’s too much emphasis and too much reliance on

Preparing a Detailed Project Plan: Step by Step 135

Project

XYZ

$785,00010X-Design$70,900 101-Mechanical

102-Electrical

103-Software

WBS Activities with Cost Subtotals

$18,700

$19,900

$26,400

Internal

Labor

$16,500

$17,700

$26,000

$1,000

$1,400

$2,200

Material ContractLabor

$0

$0

$3,400

Equipment

Rent/Lease

$1,200

$800

$300

Facility

Rent/Lease

$0

$0

$400

Figure 7-13. Using the WBS for cost estimating

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