What are the best practices for creating and maintaining a CBS in your projects?

1 Define the scope and objectives

Before you start creating a CBS, you need to have a clear and agreed-upon scope and objectives for your project. This will help you identify the main deliverables and work packages that will form the basis of your CBS. You can use a work breakdown structure (WBS) or a product breakdown structure (PBS) as a starting point, and then add the cost elements for each component. The scope and objectives will also help you define the level of detail and granularity of your CBS, depending on the size, complexity, and risk of your project.

2 Use a standard coding system

A standard coding system is a set of rules and conventions that assign unique identifiers to each element of your CBS. A standard coding system helps you organize, track, and report your project costs in a consistent and transparent way. It also enables you to integrate your CBS with other project management tools, such as schedules, risk registers, and change logs. You can use a common industry standard, such as the Uniformat or the MasterFormat, or create your own custom system, as long as it is logical, clear, and documented.

3 Align your CBS with your budget and estimate

Your CBS should reflect your project budget and estimate, which are based on the scope, schedule, resources, and assumptions of your project. Your budget is the authorized amount of money that you can spend on your project, while your estimate is the expected cost of completing your project. You should align your CBS with your budget and estimate by ensuring that they have the same structure, level of detail, and cost elements. You should also update your CBS whenever there are changes in your budget or estimate, such as scope variations, schedule revisions, or contingency adjustments.

4 Review and validate your CBS

Once you have created your CBS, you should review and validate it to ensure that it is accurate, complete, and reliable. You should check that your CBS covers all the costs of your project, including direct, indirect, fixed, variable, and contingency costs. You should also verify that your CBS matches your scope, objectives, schedule, and resources. You can use various methods to review and validate your CBS, such as expert judgment, benchmarking, historical data, or sensitivity analysis. You should also involve your project team, sponsors, and stakeholders in the review and validation process, and solicit their feedback and approval.

5 Monitor and control your CBS

After you have reviewed and validated your CBS, you should monitor and control it throughout the project lifecycle. You should compare your actual costs with your planned costs, and measure the performance and variance of your project using key indicators, such as the cost variance (CV), the schedule variance (SV), the cost performance index (CPI), and the schedule performance index (SPI). You should also identify and analyze the root causes of any deviations or issues, and take corrective actions to bring your project back on track. You should report your cost status and progress to your project team, sponsors, and stakeholders regularly, and document any changes or lessons learned.

6 Use a software tool

A software tool can help you create and maintain your CBS more efficiently and effectively. A software tool can automate some of the tasks involved in creating and maintaining your CBS, such as generating codes, calculating costs, updating data, and producing reports. A software tool can also provide you with features and functions that can enhance your CBS, such as templates, dashboards, charts, graphs, and alerts. A software tool can also facilitate the integration and communication of your CBS with other project management tools and systems, such as schedules, risks, changes, and quality. There are many software tools available for creating and maintaining a CBS, such as Microsoft Project, Primavera P6, CostX, or Planisware.