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Work breakdown
structures
White paper
Rupa Mantravadi
June 2014
This document describes how you can use work
breakdown structure (WBS) enhancements in
Microsoft Dynamics AX 2012 R3 to meet your
requirements for estimating and tracking.
www.microsoft.com/dynamics/ax
Send feedback.
Contents
Work breakdown structures
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Creating a WBS
Work decomposition
Project root task
Summary or container tasks
Leaf node tasks
Schedule estimation
Task dependencies
Task scheduling in Microsoft Dynamics AX
Cost estimation
Estimating labor costs
Estimating expense and material costs
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Planning view
Effort tracking view
Project managers re-projection of effort
Modified effort on summary tasks
Cost tracking view
Project managers re-projection of cost
Projection revision of cost on summary tasks
Earned value management
Planned value
Earned value
Actual cost
How to use the concepts of planned value, earned value, and actual cost
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B. You can change the default calendar for a specific project. Click the projects details page, and then, on the
Project team and scheduling FastTab, update the Scheduling calendar field by selecting another calendar.
The following illustration shows the setup of a projects scheduling calendar.
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2. Set up standard working hours and working days. The calendar that is set as the working calendar for your project
will be used in the WBS to determine the following information:
Working days and holidays
The number of working hours in a day
To set these for a calendar or to create a new calendar, go to Organization administration > Common > Calendars.
The following illustration shows the setup of working hours for a day.
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The following illustration shows the setup of working days and holidays.
Creating a WBS
Creating WBSs involves the following three activities:
1. Work decomposition Create a breakdown of work into manageable chunks or tasks.
2. Work schedule Estimate the time required to complete a task, set task interdependencies, and select the start and
end dates for tasks.
3. Cost estimation Estimate costs for each task.
Lets see how Microsoft Dynamics AX WBS capabilities can help with each of these activities.
Work decomposition
Creating a breakdown or decomposition of work is usually the first step in creating a WBS. The WBS functionality in
Microsoft Dynamics AX supports the following basic constructs of work breakdown or decomposition.
of the constituent tasks. The name of a summary task can be edited, but the scheduling properties for effort, dates, and
duration cannot. Deleting a summary task deletes the task and all its constituent tasks.
Schedule estimation
Schedule estimation is usually the second step in creating a WBS. As a best practice, complete schedule estimation after
you create the tasks. The Work breakdown structure form in AX 2012 R3 has two sections. The top section is designed
for schedule estimation, and the bottom section includes an Estimated costs and revenues tab that you can use for cost
estimation.
Task dependencies
In a WBS, you can create a predecessor relationship between tasks. When you assign predecessor tasks to a task, the
task can start only after all its predecessor tasks have been completed. The planned start date of the task is
automatically set to the latest date of all of its predecessors.
The start date of a leaf node task that does not have predecessors is automatically set to the projects scheduling start
date. The duration of a leaf node task is always calculated as the number of working days between its start and end
dates.
Scheduling rules
When automatic scheduling assistance is turned on, the following rules apply to task scheduling for leaf node tasks:
The start and end dates of a task must be working days according to the projects scheduling calendar.
The start date of a task that has predecessors is automatically set to the latest end date of its predecessors.
The effort for a task is automatically calculated as Number of people * Duration * Hours in a standard working day
of the project calendar.
In some cases, you might want to deviate from these rules. You can turn off automatic scheduling to stop the system
from automatically setting or correcting any of the properties on leaf node tasks. When you enter information for a task
that causes a violation any of the scheduling rules, a scheduling error icon is shown for the task.
The following illustration shows a task that has a scheduling error.
If you dont want scheduling errors to be displayed, you can click Scheduling errors are shown to turn off the feature.
The following illustration shows the location of the Scheduling errors are shown button.
Note: The values for a summary or container task continue to be calculated as the sum of the values of the constituent
tasks, regardless of whether automatic scheduling assistance is turned on or off.
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Cost estimation
As mentioned earlier in this document, the cost estimation for each leaf node task is entered by using the Estimated
costs and revenues tab in the lower (Line Details) section of the Work breakdown structure form.
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Note: You cant modify the cost estimation for a summary or container task. The cost estimation for a summary task is
equal to the sum of the cost estimation for its leaf node tasks.
The estimated total cost for each task is calculated as the sum of the estimated cost amounts for the following
transaction types:
Labor
Item or material
Expenses
A Fee transaction type is used to estimate fee-based revenue. This transaction type does not have a cost component
and is therefore not considered for estimating costs.
An On-account transaction type is used to recording the contracted sales value in a fixed-value type of project. This
transaction type is also not considered for estimating costs.
When estimating costs for labor, material, and expenses for each task, you must assign a project category to the
estimated cost.
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Planning view
The Planning view displays the planned or baseline estimate of the schedule and cost information. Although there are
no features to track the version and baseline for a project WBS, the values in this view are meant to represent the
baseline version. The Schedule estimation and Cost estimation sections of this white paper describe this view and how it
is used to create a WBS.
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Planned value
EVM theory states that the planned value plot represents the rate at which the projects team planned to earn value on
the project.
AX 2012 R3 uses the 0:100 earning rule when plotting planned value. Under this rule, the value of the task is posted to
the task as of its end date. No value is posted until the task is 100 percent complete.
In Project management and accounting, you enter the end date of the leaf nodes and the planned cost for it. When the
graph of planned value is displayed by week, planned value is summarized by week for all leaf node tasks for the
duration of the project.
Earned value
EVM theory states that the earned value plot represents the rate at which the projects team is actually earning value on
the project.
AX 2012 R3 uses the 0:100 earning rule when plotting earned value. Under this rule, the value of the task is posted to
the task as of its end date. No value is posted until the task is 100 percent complete.
When earned value is calculated, the progress percentage of each task is considered. In the 0:100 earning rule, only
tasks that are complete in a given period are considered for the calculation of earned value as of the end of that period.
Earned value on the project is calculated for all tasks that are complete when the graph is created.
Note: As of the AX 2012 R3 release, the system for WBS tracking does not have data structures to store historic progress
percentage on each task. Therefore, earned value can be reported only as of the time that the cube is processed.
Process the cube regularly to update values in the earned value data shown on the Role Center.
Actual cost
EVM theory states that the actual cost plot represents the rate at which money is being spent on the project.
Transactions posted to a project are used to plot the actual cost line. The costs are summarized by date. This data is
then used to graph the actual costs by week or by month on the earned value chart.
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How to use the concepts of planned value, earned value, and actual cost
Schedule variance
During planning, you create a forecast for work on a timeline. Therefore, planned value is the rate at which project
planners thought work would be completed on the project. After a project is in process, work is completed and the
project earns value. By comparing planned value to earned value, you can view how work on a project is progressing.
This is called schedule variance.
If the planned value for a period is more than the earned value, the amount of work done on a project is less than what
was planned. Therefore, the project is behind schedule. Because planned value and earned value are expressed in
monetary terms, the lag time on the project is also given a monetary value.
If the planned value for a period is less than the earned value, the amount of work done on a project is more than what
was planned. Therefore, the project is ahead of schedule. This lead time is also given a monetary value.
Cost variance
Because earned value uses the cost price as the multiplier, earned value indicates the cost of the work done on the
project. As a project progresses, the transaction log provides a record of money that is actually spent on the project.
When you compare earned value to actual cost, you can view the amount of money being spent compared to the value
earned. This is called cost variance.
If the actual cost spent for a period is more than the earned value, the amount of money spent is more than what was
earned. Therefore, the project is over budget.
If the actual cost spent for a period is less than the earned value, the value earned was more than what was spent.
Therefore, the project is under budget.
The following illustration shows the earned value chart on the project managers Role Center.
You can create a WBS template from the WBS of an existing project, so that knowledge and best practices gathered
during the planning of that project can be reused on similar projects in the future. However, sometimes, it might not
make sense to save the whole WBS as a template. Therefore, you can also create templates from portions of the WBS
for a project.
After a template has been created, it can be imported into a new projects WBS under the root node or under any task
in the projects WBS.
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The following illustration shows how to import a WBS template into the WBS for a project.
The tasks in WBS templates do not have start dates and end dates.
The working and non-working days are not set for WBS templates.
WBS templates always use the scheduling calendar that is set up as the default calendar for all projects.
The default scheduling calendar is used only to find out hours in a standard working day.
Predecessor relationships are not copied to a WBS template.
Because WBS templates do not have dates, the start date logic that is based on a predecessors end date is not
necessary.
A labor cost estimate line is automatically created when a task is created in a WBS template.
The sales price and cost amount are copied from the selected worker.
Expense and item costs can be created manually, just as they can on a projects WBS.
Scheduling errors are displayed when there are deviations from the following formula:
Effort = Number of resources * Duration * Hours in a standard working day
You can correct all scheduling errors at the same time by clicking the Fix all scheduling errors button. Alternatively,
you can correct scheduling errors individually using clicking the warning icon for each task.
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