The scope and benefits of a product breakdown structure

By Indeed Editorial Team

Updated 16 September 2022

Published 30 April 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Many project management tools can assist a company in managing its projects and coordinating teams towards a shared objective. A product breakdown structure (PBS) is one of these tools, a chart that can help project managers and other supervisors effectively oversee the completion of a large project. Understanding the functions and benefits of this tool can help you use it effectively. In this article, we define a PBS, explaining how it works and how it differs from a work breakdown structure, with a detailed list of how it can benefit your organisation.

What is a product breakdown structure?

A product breakdown structure is a part of the product based planning technique, a visual mechanism for examining, recording and conveying the outcomes of a project. It offers a comprehensive, hierarchical tree network of deliverables that make up the project, organised in a whole-part relationship. This diagram illustrates project outcomes, providing a detailed description of what the project plans to provide.

Project managers may supervise the formation of a PBS, but making this document is often a collective process involving every team member. Clients, executive management and various departments can also assist in developing the elements of a PBS. Teams may decide to include product descriptions to create a more detailed diagram or make a small, concise document without product descriptions.

Related: Product management best practices (with soft skills)

What is the objective of a PBS?

The PBS divides a product into its required components to provide a visual representation of the hierarchy of each one and how they relate to each other. It gives product planners a visual model for a coherent interpretation of what the end product requires. The PBS also makes every team working on a project aware of the role of each group and individual. This transparency can help you oversee a project's timetable and calculate when team members complete individual tasks.

How is a PBS created?

A team often helps create a PBS by developing and offering relevant ideas. Each team member can contribute their thoughts on what a product requires. Holding an inter-departmental idea development meeting is a helpful approach that allows diverse perspectives, resulting in a more exhaustive set of components. Teams can start with a paper copy of their PBS and eventually generate a final copy employing a project management software program.

The Product Development Meeting can begin with teams and other relevant stakeholders brainstorming components of a product and writing them down. Then, the list each individual generates gets consolidated and reviewed to eliminate duplicates. Afterwards, you group the remaining items on the merged list into related groups and develop the PBS diagram. You can repeat the steps as required until everyone feels they have identified all the product elements.

Related: Project scheduling: definition, benefits, formats and steps

Product breakdown structure vs. work breakdown structure

A PBS shares some resemblances to a work breakdown structure, but they differ in how they function. Understanding the functional differences between each tool can help you choose the required diagram when it's appropriate. The crucial distinction between these two structures is that a PBS only focuses on a product's physical elements, while a work breakdown structure focuses on the work required in a project.

A PBS works with the physical, conceptual, or functional components of a product. The work breakdown structure comprises the necessary data and service components and the physical product elements that the PBS provides. You can begin by developing the PBS to understand the project outcome and requirements. You can then apply the work breakdown structure afterwards to arrange the construction of products as a set of work packages. Once completed, the work breakdown structure can guarantee that you understand all the work required to deliver the outcomes.

Related: A comprehensive guide to four team effectiveness models

Benefits of using a PBS

Here are ten benefits of using a PBS:

1. Defines and organise the work required

Operating a PBS allows you orderly categorise the task required according to the deliveries of a project. With this structure, the execution of a project becomes perfectly organised, with every team and individual knowing their role and when to execute them. With such orderliness, your team can perform efficiently with clarity and understanding of the requirements and expectations.

Related: Product owner responsibilities within a development project

2. Facilitates the rapid development of a schedule

The process of making a PBS provides your team with an opportunity to generate a plan on how to execute a project. After breaking down a project into the various outcomes required, it becomes easy to identify the tasks you can complete to produce the identified deliverables. Also, you can create a work breakdown structure and schedule for completing the project when the PBS is complete.

3. Identifies and defines the goals and objectives

Knowing the outcomes a project requires provides you with the scope of your operation and helps you understand what your client expects from you. The PBS assists you in defining and identifying these outcomes ahead of time. It makes the goal and objective clear to you and your team and provides a benchmark for every activity geared towards completing a project.

Related: Project scope: definition, importance and how to develop it

4. Provides a visual of the entire scope of outcomes

Visuals can be effective in making ideas clear, concise and remarkable. The PBS provides visuals that help your team define, understand, connect and associate the various components a project requires. The document reinforces the understanding of the outcomes and readily reminds you of them. This comprehensive diagram can also become an easy reference point that guides the activities involved in completing a project.

5. Offers a tool for team brainstorming and collaboration

Making a PBS promotes collaboration from the beginning of a project. The contribution of every team member and stakeholder is crucial in brainstorming every possible outcome in a project and ensuring that no component get neglected in the process. The structure development meeting allows teams, staff and stakeholders to communicate and understand each other before the commencement of a project.

6. Shows the connection between various components of a project

The PBS illustrates how each component of a product outcome relates to each other, emphasising their significance in completing the project. When you outline every element of a project, it becomes easy to recognise the impact of deliverables falling behind. This knowledge can motivate you to execute tasks according to schedule and keep your team up to date with the project timetable.

7. Helps in tracking the progress of a project

The PBS can help you supervise the activities of your team. The diagram shows what the team may achieve and when they can achieve them. With these goals visualised, it becomes easy for you to track the progress of a project and ensure that every element gets accomplished accordingly. Also, knowing the deliverables a project requires allows you to create a checklist of what you have achieved and what you haven't.

8. Facilitate the efficient management of a project

Using a PBS can also help you coordinate a large project as a team leader. Different components can include distinct timelines and some team members can work on several sub-components throughout the project. A PBS can allow team members to perform their tasks to meet the outcomes of a project. Separating deliverables into distinct categories enables project managers to organise the activities of their teams.

Related: Project management skills and how to improve them

9. Provides a way to estimate and allocate project costs

By clearly understanding the physical products a project intends to focus on, you can optimise the financial resources allocated to the project. A PBS can help you identify whether a particular task advances a project closer to completing a deliverable and which task a project doesn't require. This knowledge assists you to allocate resources effectively to the appropriate activities in the right proportion. It can also help you eliminate assignments and expenses that don't add value to a project.

Related: Project controls: definition, importance and skills

10. Ensures transparency in executing a project

Employing a PBS can promote a culture of transparency in your organisation. When team members can see the staff responsible for a given portion of a project, it may be easier to monitor progress and offer and receive assistance. A PBS can be a good reference point in communicating about the project with clients and supervisors to offer a comprehensive analysis of results. This practice can help confirm expectations and create an opportunity for feedback and evaluation.


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