WBS and Risk

The Project Management Institute defines a WBS as “A deliverable-oriented grouping of project elements that organizes and defines the total work scope of the project. Each descending level represents an increasingly detailed definition of the project work”

There are three reasons to use a WBS in your projects.  Firstly it, helps to more accurately and precisely define and categorise the scope of the total project. This is usually done by means of using a hierarchical tree structure. Each level of this structure breaks the project deliverables or objectives down to more specific and quantifiable chunks. The second reason for using a WBS in your projects is to help with assigning responsibilities, resource allocation, monitoring the project, and controlling the project. The WBS makes the deliverables more precise and concrete so that the project team knows exactly what has to be accomplished within each deliverable. This also allows for better estimating of cost, risk, and time because you can work from the smaller tasks back up to the level of the entire project. Finally, it allows you double check all the deliverables' specifics with the stakeholders and make sure there is nothing missing or overlapping.

For example please see below the WBS for a football tournament

In order to understand which areas of the project might require special attention, and whether there are any recurring risk themes, or concentrations of risk on a project, it would be helpful if there were a simple way of describing the structure of project risk exposure.

 Simple list of risk sources does not provide the richness of the WBS since it only presents a single level of organization. A better solution to the structuring problem for risk management would be to adopt the full hierarchical approach used in the WBS, with as many levels as are required to provide the necessary understanding of risk exposure to allow effective management. Such a hierarchical structure of risk sources should be known as a Risk Breakdown Structure (RBS). Following the pattern of the WBS definition above, the RBS is defined here as “A source-oriented grouping of project risks that organizes and defines the total risk exposure of the project. Each descending level represents an increasingly detailed definition of sources of risk to the project.” The RBS is therefore a hierarchical structure of potential risk sources. The value of the WBS lies in its ability to scope and define the work to be done on the project; similarly the RBS can be an invaluable aid to understanding the risks faced by the project. Just as the WBS forms the basis for many aspects of the project management process, so the RBS can be used to structure and guide the risk management process.