Hi everybody,
I´m quite now to PM. I started at my company a few months ago and they already had a project plan with a WBS in use. The contractor has to reffer to a task in his bills, so that I know what they were doing and if the time they bill matches the time planned. I use this to monitor our costs. We now have quite often singular meetings with our external contractor that have not been planned beforehand in the wbs and for which I don´t have any task in the wbs. I don´t want to set up one as it only is a short meeting with 2-3 hours of extra work for the external contractor. Also,the contractor bills socalled administrative work, which he needs to manage the team on his side, do some administrative work etc. How do you include these efforts in your cost calculation? Do you handle them as overheads in a special task in your wbs?
Thanks,
Carsten Saving Changes...
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Peter RapinSubject Matter Expect; Project Delivery| Independent ConsultantOntario, Canada
I am of two minds on this and have done it both ways, as a WBS task and as overhead. In some ways it depends how deep you want to go into the weeds. Do you really want to track and manage to that level of detail?
Pros of WBS tracking:
- actual effort recognized (including preparations)
- becomes a project deliverable
- commits the participants including contractors
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Cons:
- additional administrative effort (costs)
- makes meetings too important
- demands excessive attendance
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I prefer to see meetings as ad-hoc events - call them when required. Too many pre-planned meetings have nebulous agendas, loss of interest, poor preparation and attendance. A meeting should only be called when the effort is justified to enhance project delivery.
The project should not be about meetings - meetings should be about project delivery.
Bottom line: I see meetings as part and parcel of the main project WBS tasks with the effort charged to the task. Its not a separate effort or task nor task overhead. If a meeting is necessary to undertake, complete or deliver a task then it is a direct task cost. If it is not necessary in the undertaking, completion or delivery of a task then there should not be a meeting. Saving Changes...
It is definitely not overhead as the time is spent working on the project so it is billable to the project. Within the project budget however, administration does get treated a lot like overhead.
I add items to the WBS for "supplier coordination" and look for that in my WBS reviews of all teams. You could break it down by time period or by type of coordination if you want more EVM visibility. Team members including yourself do need to plan for the unplanned coordination or you will usually exceed your plan.
How much time you budget for that depends on your knowledge level of the project details, and how much coordination is typically required. It will depend on the level of complexity, and the unknowns. I might expect anywhere from 10-40%.
We don't actually bill it to each individual WBS item though. Groups charge most things to a general project budget. The discrete activities get credit once they release, and the coordination activity might be 50% credit once started, and 50% when you close out the activity in your planning system.
Management sometimes picks at those estimates, so some teams may just factor their coordination in other tasks. That makes it less visible, but the CPI tends to track better to plan then periodically taking credit for weeks of coordination. Which way you choose depends on your stakeholder analysis (what does your management expect?). Saving Changes...
From a cost tracking perspective, I've generally had such costs allocated at higher level nodes in the WBS rather than at the work package level. Otherwise, you'll end up spending more effort in planning and tracking the work than the value such detail will bring.
Kiron
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1 reply by Keith Novak
Jan 05, 2022 4:53 PM
Keith Novak
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Agreed, and I normally use the "zeros" in the WBS for the integration. If Team 4 has tasks 4.1, 4.2, 4.3, etc. in their WBS. 4.0 Is the integration bucket.
Thanks a lot for your feedback. It´s great to have your opinions on that: So what I will do now is - take care that meetings have a connection to a wbs so that I can add the effort there - and for the administrative work of the external consutants I will create a new task in the WBS. Saving Changes...
From a cost tracking perspective, I've generally had such costs allocated at higher level nodes in the WBS rather than at the work package level. Otherwise, you'll end up spending more effort in planning and tracking the work than the value such detail will bring.
Kiron
Agreed, and I normally use the "zeros" in the WBS for the integration. If Team 4 has tasks 4.1, 4.2, 4.3, etc. in their WBS. 4.0 Is the integration bucket. Saving Changes...
Stéphane ParentSelf Employed / Semi-retired| Leader MakerPrince Edward Island, Canada
I agree that meetings should be charged to the most relevant activity, rather than a meeting activity.
As for contractor billing, I would not expect to pay for contractor's administration and overhead. It is their job to build that into their rates. Saving Changes...
Sergio Luis ConteHelping to create solutions for everyone| Worldwide based OrganizationsBuenos Aires, Argentina
If you are using the method to track cost with a WBS then what is not inside the WBS then do not exists in terms to justify something. In the WBS model we use we have items related to time off, administrative tasks, baseline tasks, etc but it seems is not your situation. Then, in my understanding, there are two possibilities: 1-change the WBS by adding what you need just in case it is not there. 2-somebody will approve the invoice regarding to this activities without any reference to the WBS and it will be posted as contingence. Saving Changes...
Thomas WalentaGlobal Project Economy ExpertHackenheim, Germany
Carsten,
schedule activity types may include the type of effort for the activity be
- discreet effort (8 days to create a deliverable),
- level of effort LoE (no deliverable, just work, like for meetings) or - - apportioned effort (a % of discreet efforts for an activity like QA)
- from PMBoK ed5, 6.2.3.2 activity attributes. They still mentioned type of effort in PMBoK ed6 without the details.
I often had a LoE activity (and WBS element) called project management and charged any efforts from meetings on this.
