Organization Breakdown Structure (OBS)

Term Definition

Organization Breakdown Structure (also known as Organizational Breakdown Structure) or OBS is a hierarchical model describing the established organizational framework for project planning, resource management, time and expense tracking, cost allocation, revenue/profit reporting, and work management.

Work Breakdown Structure (WBS) captures all elements of projects in an organized fashion. Breaking down large, complex projects into smaller project pieces provides a better framework for organizing and managing current and future projects. WBS facilitates resource allocation, task assignment, measurement and control of project cost and billing. The WBS is utilized at the beginning of the project to define scope, identify cost centers and is the starting point to developing project plans/Gantt charts.

The Organization Breakdown Structure groups together similar project activities or “work packages” and relates them to the organization’s 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 (example business unit performance) or down to the details (example 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.

The following is a sample OBS:

Organization Breakdown Structure (OBS)

Area of Application
Project Management
Workforce Management
Work Breakdown Structure

Related Terms
Work Breakdown Structure

“We needed a professional services automation system that would consolidate our databases, improve our billing and expense processes, and that would be an essential platform for moving us forward for the next five years. That’s why we chose Tenrox.”

Senior Project Manager

The benchmark report, which surveyed 150 service executives in the technology sector, takes a revealing look at performance metrics of embedded and pure consulting technology services organizations ...

During this webinar you will learn how CRM and project management software can integrate and exchange information to provide sales and project teams ...