PAMANTASAN NG LUNGSOD NG MAYNILA

Graduate School of Engineering

Master of Engineering Management Construction Management

GEM 832 Project Planning and Control

GROUP NO. 4 REPORTER NO. 2

ORGANIZATIONAL BREAKDOWN STRUCTURE

Prepared By:
Engr. Romen P. Real
Submitted to:
Dr. Antonio V. Sobrevias, Jr.

August 16, 2016

Organizational Breakdown Structure is a hierarchical relationship of the organization,

including subcontractors, responsible for managing a designated scope of work within the
work breakdown structure (WBS).
The Organization Breakdown Structure groups together similar project activities or work
packages and relates them to the organizations structure. OBS is used to define the
responsibilities for project management, cost reporting, billing, budgeting and project control.
The OBS provides an organizational rather than a task-based perspective of the project. The
hierarchical structure of the OBS allows the aggregation (rollup) of project information to
higher levels. When project responsibilities are defined and work is assigned, the OBS and
WBS are connected providing the possibility for powerful analytics to measure project and
workforce performance at a very high level (e.g. business unit performance) or down to the
details (e.g. user work on a task).
To develop an Organization Breakdown Structure:
1. Draw of the entire organization as a hierarchy
2. Define all departments and project teams.
3. Specify functional (where cost for the work the user does is allocated to) and approval
(who approves the work the user performs and any leave time approvals) groups for every
user.
Companies have different organizational structures and the OBS for a given project can be
designed to accommodate any of the following structures.
1. Functional organization: This structure is quite common. Individuals are assigned to work
according to a function such as engineering design or accounting services. Individuals within
these groups can be assigned to support different projects but they remain part of the
functional organization.
2. Clientbased organization: A common example of this type of organization is where an
engineering company is organized to handle projects based on different types of clients:
transportation, water, energy, and government for example. Organizations may also be
structured along geographic lines, such as North America, Latin America, Middle East and
North Africa (MENA), etc. however, the OBS structure must hierarchically decompose down

to the control account level to allow for identification of a responsible party for WBS for
EVM purposes.
3. Dedicated project/program organization: A project or program manager is assigned to a
large project or program and is given a budget, scope, and schedule. The manager hires and
manages the human resources required for the project or program.
4. Matrix organization: In this type of an organization, the project team member remains a
member of their functional organization, but is assigned to a specific project, and is given
assignments by the project manager rather than by the functional manager. Control account
managers (CAMs) on a project can also fulfill a role as functional managers.
Organisational Breakdown Structures are a good way of organising and communicating the
overall structure of the Project Team.
When coded effectively, the OBS can be combined with the WBS to communicate who is
responsible for which work package or group of deliverables.
A combination of WBS code and OBS code can also be used to identify project budget areas
(cost centres) which then get fully costed once resources are assigned from the Resource
Breakdown Structure.
This then, can become the basis for controlling project cost as well.

References:
http://www.aacei.org/toc/toc_83R-13.pdf
http://www.thecourse-pm.com/Library/OBS.htm
http://www2.lbl.gov/Ops/assets/docs/PMO/PMO%20Procedures/PMO-1.3%20Project
%20Organizational%20Breakdown%20Structure.pdf
http://www.free-management-ebooks.com/dldtem/dltmpm-obs.htm