What Is an Organizational Breakdown Structure (OBS)?

Successful project management requires detailed planning and an organized structure. Before you start, you have to identify the tasks making up the project and decide who will carry out the work. The organizational breakdown structure is an intermediate step in this process. It helps identify the employees who will be responsible for project work. When you complete the entire project-planning process with regard to tasks and responsibilities, the OBS deals with the organizational side of the project.

Project management uses specific tools to complete the required work on schedule and with the necessary functionality. One of the key project management functions is to assign responsibility for tasks to particular employees, departments or teams. Typical project management tools to accomplish this include a work breakdown structure, an organizational breakdown structure and a responsibility assignment matrix. These tools work together to allow you to ensure that each project task has a corresponding organizational unit that is responsible for it.

Project managers use the work breakdown structure to identify the work that the project team must accomplish and to break it down into individual tasks. The process works backward from the work that is required to achieve the project goals. It separates the work into individual activities such as purchasing and testing. The WBS process divides these activities further, into tasks such as purchasing the accounting software or testing specific equipment. The goal is to break down the work into tasks that allow project management to assign a cost, a duration and a responsible party.

The preparation of the OBS uses a process similar to that of the WBS but for the organizational structure instead of the work. Project management breaks down the project team into organizational units that will take on specific responsibilities. The key is to have an organizational unit ready to carry out each task of the WBS. When the WBS includes a task such as the purchase of accounting software, the OBS must have an organizational unit for purchasing.

Project management has to ensure that the OBS has an organizational unit for each task of the WBS but the OBS does not assign responsibilities. Project management creates a responsibility assignment matrix for this purpose. The RAM is a table that lists each task of the WBS and the organizational unit that is responsible for carrying it out successfully. When there is a problem in other sections of the project, you can refer to the RAM to see who is responsible for finding a solution.