When it comes to EIC Horizon project, the concept of work packages is central. Work packages are important when preparing the Horizon Project Proposal and the budget and are a key area that is being assessed by project evaluators.
What is Work Package?
A work package is the smallest unit of a Work Breakdown Structure. When preparing a Work Breakdown Structure using the decomposition technique, deliverables are generally broken down into smaller, more manageable chunks of work. Therefore, the packages should correspond to the Gantt plan of the undertaking.
This process of deconstruction continues until the deliverables are small enough to be considered work packages. Each of these packages should be small enough to help the innovation Project managers estimate the duration and the cost. Work packages can be scheduled, cost estimated, monitored, and controlled.
Why Are Work Packages Important?
By breaking a project down into work packages, the development of Work Breakdown Structures becomes easier—and project managers will have a finer level of control over assignments. The project is easier to be held consistent to objectives set and impact targeted.
Other benefits include:
- Packages help understand whether a certain set of tasks or assignments leads to a stand-alone milestone achievement.
- Help plan for the identification of risks and their mitigation.
- Work packages allow for simultaneous work to be done on different components of an Innovation project in parallel by multiple teams and subcontractors. Each team follows the tasks defined for the work package and completes them by the specified deadline.
- Once the teams have finished their individual work packages, the entire project comes together with seamless integration. Completion of a work package is most often overseen by a specific person: a manager, supervisor, a team lead, or a designated team member.
- Even though costs are estimated at an activity level, these cost estimates are aggregated to the work package level, where they are measured, managed, and controlled.
- For each work package, we can determine the direct labour costs, the direct costs for material, equipment, travel, contractual services, and other non-personal resources, as well as the indirect costs associated with each of these work packages.
The individual costs of all the work packages are then aggregated to arrive at the authorized cost baseline or the authorized budget for the project.
How to Prepare a Work Package?
When breaking a Work Breakdown Structures down to the level of work packages, the WBS nodes could be decomposed to extremely granular levels, wasting time and actually making the project difficult to understand, manage, and change. There are many things to be considered when deciding how far to decompose the WBS or how best to create a work package, but a few important factors to consider are:
- Work Packages should be small enough to be estimated for time and cost.
- The project manager and the project team should be satisfied that the current level of detail at the work package level provides enough information to proceed with subsequent activities.
- Work packages should be small enough to be assigned to a single person or a group who can be held accountable for results.
- Work packages can lie at different levels in the WBS hierarchy. Project managers should not artificially force their WBS into a structure where all the work packages lie at the same level in the WBS hierarchy. This results in problems as the project progresses, like forced detail – where you could have monitored and controlled specific parts of the work at a higher level- or not enough scrutiny where you really need it.
Measuring Work Package Performance with Earned Value Management
Once an innovation project is approved and execution starts the performance of a work package can be measured by the earned value management measurement technique, a commonly used performance measurement metric. It integrates project scope, cost, and schedule measures to help the project management team assess and measure project performance and progress. It calls for the preparation of an integrated baseline against which the performance of the work packages can be measured for the duration of the project.
Earned Value Measurement develops and monitors three key dimensions for each work package:
- Planned Value: Planned value is the authorized budget allocated to the work to be accomplished for the work package.
- Earned Value: Earned value is the value of work performed expressed in terms of the approved budget assigned to the work package.
- Actual Cost: Actual cost is the total cost actually incurred and recorded in accomplishing work performed for a work package.
Variances from the approved baseline are also monitored.
Our Value Added
At Andriotto Financial Services we have a complete set of tools for checking the relevancy and self-sufficiency of work packages. We also map WP towards the objectives and assignments laid out in the project plan to make sure the whole picture is consistent. Altogether there should be a complete agreement between innovation project objectives and work packages and if set goals are not covered by a WP, the issue should be addressed. We stand ready to provide guidance and even audit packages so that they become relevant, accurate and adequate to the overall vision of the Innovation start-up.