On any given project, there is always the conversation on who is responsible for the accomplishment of certain segments of work. During the initial planning stages (often times during the proposal) of a program you develop a Work Breakdown Structure (WBS), identifying a logical breakout of the work down to manageable segments.
Additionally, you will develop an Organizational Breakdown Structure (OBS). This structure can be a corporate organizational chart or a programmatic organizational structure whose main purpose is to identify the organizations (i.e. Programs, Engineering, Testing, major Subcontractors, etc.) that are responsible for executing the program and have management responsibility.
The cross section of the WBS and OBS identifies the control account and the responsible organization; a person from within this organization is assigned as the CAM (Control Account Manager). This individual is responsible for the execution and management of the cost, schedule and technical performance of the segment of the WBS.
It’s important to note that does not mean all work within the WBS is completed or done by that organization and may also mean that not all resources who work on that WBS are from the CAMs organization either. It is possible that some work packages on the control account may be completely done by another organization, and this is called the performing organization.
This can be a difficult transition for a company who has dissected the program work in the past by performing organization as opposed to breaking out the work in a deliverable or product based approach. When work is logically broken out, whether it’s by deliverable or product based, there needs to be a sole individual/organization responsible to answer for the cost/schedule/technical performance of a specific segment of work.
The issues when using performing organization vs. responsible organizations:
- No clear ownership of the budget
- No clear ownership of deliverable performance
- No clear responsibility for management and customer interaction
This is why during the initial program set up it is so important to develop an Organization Breakdown Structure that focuses on responsible organizations and clearly delineates the work into manageable segments.
Organizations new to this concept can have trouble adjusting to an approach which breaks out work by a deliverable or product. This can be compounded by the need to assign an individual or organization responsible to answer for the cost, schedule and technical performance of a specific segment of work.
There are clear benefits for organizations that adopt this approach listed in the three bullets above.
Spending upfront time on creating a robust Work Breakdown Structure and an Organizational Breakdown Structure is critical. The resulting structures should focus on responsible organizations with their work defined in manageable segments.