A control account is an intersection between an OBS element and a WBS element. The OBS Elements and WBS elements are shown in the control account matrix on pages 86 to 88.You will need to identify 5 intersections for Control accounts in case study 4.1 and discuss the assumptions you used and why you recommend them as a control account.

Here are some guidelines that are usually followed to create control accounts.

https://wsdot.wa.gov/sites/default/files/2021-10/ControlAccountGuidelines.pdf

Example:

Control Account - Intersection of Organizational Element/Purchasing and WBS Element 1.1.1.1 Engine Block. The first intersection in the control account matrix on page 86.

Assumptions - Purchasing Department will be responsible for control accounts for purchased materials. Figure 2 shows that Casting Machine will need to be purchased for WBS 1.1.1.1.

Recommendations - The purchasing department is best equipped to manage purchasing of materials since they have skilled staff and will be knowledgeable of all the organizational purchasing policies and processes to be followed for purchasing the required category of materials. They could also have knowledge of prior vendors who have sold the same materials to the organization during a prior project. They will adhere to policies while selecting the best supplier without compromising on pricing and quality of resources.

Chapter 4 Relating Organizations, Responsibility, and Work Scope 83 have been raised to a higher level, reducing the amount of insignificant subdivisions and the asso- Using this approach implies that it is more import- ciated planning and administration costs. ant to plan and control the lowest level organiza- tional elements rather than to know the perfor- However, there can be a corresponding loss of mance details of the Condenser WBS element. visibility. Variances that may be readily identified Control Account Example 4 in Figure 4-10 shows in Control Account Example 1 (Figure 4-7) are ob- the impact of eliminating a level of OBS detail scured in combination with other efforts in Control while maintaining the original WBS elements. Account Example 2 (Figure 4-8). While recognizing This approach results in 10 control accounts for that there may be less visibility than in the previous the Condenser WBS element and may represent case, the judgment must be made as to whether or the best tradeoff between visibility and detail. If the not this additional visibility is warranted. Managing Condenser WBS element were defined to a lower at too low of a level of detail is not cost effective. level of detail than the other Condensing System Reducing the number of control accounts may elements because of higher perceived risk, this result in decreased reporting visibility but it does approach would maintain the needed visibility. not eliminate information from the project manage Additionally, most company labor accumulation ment system. This is because a control account is systems include the lowest level organizational composed of work packages, which are defined in element code in the time reporting source docu- Chapter 10, "Measuring Accomplishment." ments, so the OBS actual cost data should exist in the accounting system if needed for detailed anal- Work packages are detailed, short duration tasks ysis. that are part of the control account's identified scope of work. Higher level control accounts can Work Turbine Generator Equipment still have visibility into the details by planning an Breakdown Condensing System increased number of work packages within each Structure Condenser Vacuum Tube Cleaning lys control account. When a variance is identified at Connections Condenser System System rol the control account level, it is still possible to trace Organization Breakdown Tube Sheets Transitions , Waterboxes lotwells it to its source element of cost at the work package necks Tubes Structure level. Supt Better Control Account Example 3 in Figure 4-9 shows Gupt-Goattelly Supt . X X X X X the impact of eliminating a level of WBS detail Gupt Astillly General Superintendent Gupt Fire prot General Contracto while maintaining the original OBS elements. This Supt Piping approach results in seven control accounts for the Coolin System Gupt Condenser X Condenser, which falls between Control Account SupL Supervisor Goofing Towers Examples 1 and 2. Figure 4-10 Control Account Example 4 Work Turbine Generator Equipment To summarize Control Account Examples 1-4, Breakdown Condensing System any of these examples could be an appropriate Structure| Condenser acuu Condenser Tube Cleaning Connection System System approach for a project. The point often compro- Organization mised by many company systems or project con- Breakdown Fube Sheets Fransitions, Waterbore trol practitioners is that lowest level elements in necks Tubes Structure the WBS do not have to be defined at the same Supt. Boller level. Similarly, the lowest level OBS elements do Boller Supt Coal hdig not have to correspond to the same organization- Supt. 4- 7 Supt. Ash hdig X al level. One organizational element may assign General Contractor General Superintendent In Supt. Fire prot. x a Vice President as the control account manager Supt Piping ing Cooling while another organizational element may assign System | Supt Condenser Supt ac Supervisor a line supervisor as the control account manager. Cooling Towers for Figure 4-9 Control Account Example 3 Control account dollar value and duration should also be considered in the establishment of con- ac- trixSection 1 Earned Value Project Management and Organization 84 the system application. If the control accounts trol accounts. While there is no absolute rule for at a very summary level, adequate manager typical" control account size and duration, expe visibility will not exist. If control accounts are rience has shown that a control account is usually numerous, the cost of operating the 9 to 12 months in duration and represents at least creases dramatically and the data produced . $1,000,000 of direct budget for a research and overwhelm the users and be less effective development project. Those dollar values include project management. Guidelines for selecting labor, material, subcontract, and other direct costs. proper level of detail for control accounts indy For a production or construction project, control technical, schedule, cost, risk, and information accounts tend to be longer (13 to 18 months) and jectives. represent at least $3,000,000 of budget in direct costs. While budget value is not the only consid Review Questions eration in establishing control accounts, it is a val- ue that is readily available and very helpful in the 4-1 . Explain the role of the Responsible establishment of control accounts; however, the Assignment Matrix, or RAM, in the project scope and the cost element content needs to be management process. considered. High dollar material items or subcon- 4-2. What is the fundamental difference be tracts often result in larger control account values. tween a WBS and an OBS? Conclusion 4-3 What is the role of the control account? the project management process An important element of project management is the identification of who is responsible for the 4-4. What is the primary tradeoff to be consit accomplishment of specific work items. The ered in the establishment of control ac Organization Breakdown Structure (OBS) defines counts? the project's organization. Assignment of responsi- 4-5 Name at least five factors that go into the bility for the products and services to be provided determination of the proper level of detail as part of the scope of work is then accomplished for control accounts. by creating a matrix from the intersection of the Work Breakdown Structure (WBS) and the project True or False Organization Breakdown Structure (OBS). This 4-6 Since the Responsibility Assignment matrix is known as the Responsibility Assignment Matrix (RAM). The intersection points between the Matrix can be maintained in an automated WBS and OBS are called control accounts. system that indicates which accounts are The control account is the basic building block of valid charge num " numbers , there is not mud the project management process. It is the control cost impact if there were a large number of point where technical scope, schedule, and cost control accounts. parameters are integrated. It is also the focus for 4-7 planning, monitoring, and controlling because all The project Organization Breakdown aspects of the system come together at the control Structure (OBS), is really just another name acount level. This includes schedule planning and 4- 8 for the company's organization chart. status, accomplishment measurement, actual cost collection, variance analysis and corrective action, Use of a Responsibility Assignment Matrix and estimating costs at completion. (RAM) helps to ensure that someone The selection of the proper level of detail for the responsible for all elements of work while simultaneously control account is a key factor in the success of sly ensuring 1-9. duplication of responsibility. A control account is the lowest west level in the WBS/OBS matrix.85 CONTROL ACCOUNT CASE STUDY DEFINITION PART 1 4.1 Background The Wheelie Corporation was awarded the MOR-DED Motor Scooter Phase A Contract. Mr. James Wagner was appointed the Project Manager. One of the contract clauses required the contractor to use an Earned Value Management System. Mr. Wagner had been to a seminar on Earned Value Management, and he thought the next step was to integrate the Wheelie Organization with the CWBS to identify control accounts. Wagner recognized the excellent job that the special WBS development team did in its first assignment and felt that their familiarity with the WBS would help them in recommending the control ac- counts for the MOR-DED Phase A Contract. Problem Statement Your team is to identify a recommended set of control accounts for the MOR-DED Motor Scooter Phase A contract. Use the "Assumptions for Control Account Selection" (Figure 1) and "Make or Buy Plan" (Figure 2) to develop your recommendation and the Control Account Matrix to record your analysis. Identify individual intersections on the matrix that you think represent control accounts by marking with an "X". If you wish to gather more than one intersection into a single control account, mark each one with an "X" and then circle those that go together. Choose a team spokesperson to describe your control account selections.Section 1 Earned Value Project Management and Organization 86 FIGURE 1 Assumptions for Control Account Selection 1. Purchasing Department will be responsible for control accounts for purchased materials. 2. Tooling is only needed for Engine Block, Fuel Air System and Lubrication System during Phase! 3. The frame will be developed in the Model Shop. 4. Assembly Department does only final vehicle assembly. Component subassembly is performs by Shops. 5. Production Control, Manufacturing Engineering, and Quality Control activities related to the ve cle components are too small to be individual component level control accounts. Control account for these activities are placed in Integration and Assembly. 6. All Computer Services effort on this project will be part of any Engineering Data delivered to the customer. 7. All Drafting efforts are consolidated into either Engineering Data or Integration & Assembly. 8. The Project Manager will be responsible for the Management Data, Systems Management, an. Program Management. 9. Reporting elements required for the customer performance reports are identified with an ". control accounts must summarize into these elements. 10. Some organizational elements may be considered as indirect and/or G&A. No control account should be identified for these elements.Chapter 4 Case Study 4.1 Control Account Definition Part 1 87 FIGURE 2 Wheelie Corporation Make or Buy Plan Project: MOR-DED Motor Scooter Phase A WBS NO. TITLE MAKE BUY 1 .1 .1 .1 Engine Block REMARKS X Fuel-Air System Purchase Casting/Machine In-house 1.1.1.2 X 1 .1 .1 .3 Ignition System X In-house Specifications/Subcontract 1.1.1.4 Lubrication System X 1 .1 .1.5 Instrumentation X In-house Specifications/Subcontract 1.1.2.1 Clutch X Purchase Components/In-house Sub-assembly 1 .1 .2 .2 Trans Assembly X Purchase Components/In-house Sub-assembly 1.2.1 Frame X 1.2.2 Seat X 1.2.3 Fenders X 1.2.4 Foot Pegs X 1.3.1 Shock Absorbers X 1.3.2 Wheels X 1.3.3 Axles X 1.3.4 Steering Assembly X In-house Specifications/Subcontract 1.4 Integration Assembly X 2.1.1 Test Planning X 2.1.2 Reliability Tests X 2.1.3 Road Test 2.2 Test & Evaluation Support X 3.1 Technical Manuals X 3.2 Engineering Data X 3.3 Management Data X 4.0 Depot Test Set Phase 'B' Decision 5.0 Initial Spares & Repairs Project Management 6.2 Systems Management 6.3 X Quality Assurance88 MOR-DED Motor Scooter Control Account Matrix (Part 1) MOR-DED MOTOR SCOOTER Work 1.0 Vehicle Breakdown 1.1 Power Source & Transmission 1.2 Frame Assembly * 1.3 Suspension Structure .1.1 Engine 1.2 Power rans Organization IntegrationAssembly Steering Assembly Shock Absorbers 1.2.4 FootPegs Breakdown 1.1.1.2 Fuel-Air 1.1.1.3 Ignition 1.2.3 Fenders Trans Assembly 1.1.2.1 Clutch 1.3.2 Wheels Instrumentation Engine Block 1.3.3 Axles 1.2.1 Frame Lubrication 1.2.2 Seat worst wests 1.3.4 1.1.2.2 1.1.1.5 1.1.1.1 Structure 1.3.1 1.4 Procurement *| Purchasing Director Subcontracts Finance Controller Accounting Section 1 Earned Value Project Management and Organization Director Administration Legal Marketing Director Electronics Design Design Group Power Design Branch Mechanical Design Branch Engineering LEWO - OWZH Director Test & Evaluation Drafting Branch Engineer Computer Services Design Group Model Shop * Production Control Group Manufacturing Engineering Group Director Tooling Manufacturing Shops Assembly Quality RAM Group Director Quality Assurance Department Quality Engineering Group Assurance Quality Control Department Project Management* MOR-DED Project Manager . CUSTOMER REPORTING LEVEL