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Cost Breakdown Structure (CBS) Generation

Pitch

Automatically generate a Cost Breakdown Structure (CBS) from a plan, mapping scope to cost categories, subcategories, and line items with assumptions and confidence levels.

Why

Most plans mention costs but do not structure them. A CBS enables:

  • Comparable cost estimates across plans.
  • Immediate visibility into cost drivers.
  • Faster budgeting, funding, and procurement decisions.

Problem

Without a CBS:

  • Cost claims are vague or non-auditable.
  • Missing categories create hidden risk.
  • Downstream financial models are inconsistent.

Proposed Solution

Implement a CBS generator that:

  1. Parses plan scope and milestones.
  2. Maps scope elements to standard cost categories.
  3. Produces a multi-level CBS with assumptions and ranges.
  4. Assigns confidence and missing-info flags.

CBS Taxonomy (Default)

Level 1 categories:

  • Labor
  • Materials
  • Equipment
  • Software and Licenses
  • Facilities
  • Professional Services
  • Compliance and Legal
  • Operations and Maintenance
  • Contingency

Level 2 examples:

  • Labor: engineering, project management, field staff
  • Materials: raw materials, components, consumables
  • Facilities: rent, utilities, site prep
  • Compliance: permits, audits, regulatory fees

Generation Process

1) Scope Extraction

Identify:

  • Deliverables (what will be built or delivered)
  • Work packages (tasks and milestones)
  • Dependencies and external services

2) Mapping Rules

Apply mapping from scope to cost categories:

  • Physical deliverables -> materials + equipment + labor
  • Software deliverables -> labor + cloud + licenses
  • Regulated projects -> compliance + legal

3) Cost Estimation

Use a combination of:

  • Benchmark ratios (per unit, per employee, per square meter)
  • Historical PlanExe costs
  • User-provided or inferred quantities

3.1) Multi-Currency Handling

Plans may involve multiple currencies (e.g., cross-border bridge projects). The CBS should:

  • Capture line items in their native currency.
  • Store a reporting currency for rollups (default to plan base currency).
  • Record FX assumptions (rate, date, source, volatility band).
  • Allow dual-currency rollups when contracts are split by jurisdiction.

4) Confidence Assignment

  • High: explicit quantities and pricing provided.
  • Medium: benchmark-based estimates.
  • Low: inferred or missing data.

Output Schema

{
  "cbs": [
    {
      "category": "Labor",
      "subcategories": [
        {"name": "Engineering", "estimate": 420000, "currency": "EUR", "confidence": "medium"},
        {"name": "Project Management", "estimate": 120000, "currency": "EUR", "confidence": "medium"}
      ]
    },
    {
      "category": "Compliance and Legal",
      "subcategories": [
        {"name": "Permits", "estimate": 30000, "currency": "DKK", "confidence": "low"}
      ]
    }
  ],
  "total_estimate": 570000,
  "reporting_currency": "EUR",
  "fx_assumptions": [
    {"pair": "DKK/EUR", "rate": 0.13, "as_of": "2026-02-10", "volatility": "medium"}
  ],
  "contingency": 0.12,
  "assumptions": [
    "Engineering team of 5 for 12 months",
    "Permit costs based on regional averages"
  ]
}

Integration Points

  • Feed into top-down and bottom-up finance modules.
  • Use as a checklist for missing cost categories.
  • Provide input to bid pricing and risk analysis.

Success Metrics

  • % plans with a generated CBS.
  • Reduction in unaccounted cost categories during review.
  • Alignment between CBS totals and final budget.

Risks

  • Over-simplified categories: mitigate with domain-specific mappings.
  • False precision: provide ranges and confidence labels.
  • Missing quantities: require user clarification prompts.

Future Enhancements

  • Domain-specific CBS templates.
  • Automated cost library updates.
  • Integration with procurement and supplier pricing feeds.

Detailed Implementation Plan

1) Canonical CBS taxonomy service

Create a versioned taxonomy module: - global categories (L1) - domain-specific subcategories (L2/L3) - mapping aliases (e.g., “permits” -> compliance/legal)

This avoids inconsistent CBS labels across plans.

2) WBS-to-CBS mapper

Implement deterministic + ML-assisted mapper: 1. Rule-based first pass from task metadata and keywords. 2. LLM-assisted classification for ambiguous tasks. 3. Confidence score and explanation per mapping.

Store mapping artifacts: - wbs_task_id - cbs_path - mapping_confidence - mapping_reason

3) Cost line generation

For each mapped task, generate cost lines: - quantity - unit - unit rate - currency - low/base/high estimate - source (user input, benchmark, quote, inferred)

Represent uncertainty explicitly; avoid single-point false precision.

4) Assumptions and provenance registry

Every cost line should reference an assumption record: - assumption text - evidence source - owner - last update timestamp

Provide “assumption drift” detection if benchmarks change.

5) CBS outputs and exports

Generate: - hierarchical CBS table - WBS↔CBS crosswalk table - top cost drivers with sensitivity - export to CSV/XLSX/JSON for finance tooling

6) Integration with top-down and bottom-up finance

  • Top-down uses CBS categories for ratio application.
  • Bottom-up consumes CBS line items as task-level cost ledger.
  • Reconciliation reports highlight CBS categories causing variance.

7) API contract proposal

{
  "plan_id": "...",
  "cbs_version": "v1.0",
  "currency": "USD",
  "items": [
    {
      "wbs_task_id": "3.2",
      "cbs_path": "Labor/Engineering/Backend",
      "estimate": {"low": 50000, "base": 70000, "high": 95000},
      "confidence": "medium",
      "assumption_id": "asm_42"
    }
  ]
}

8) Rollout phases

  • Phase A: rule-based mapping + static taxonomy
  • Phase B: confidence scoring + assumption registry
  • Phase C: export + integration with finance modules
  • Phase D: live vendor pricing and automated refresh

9) Validation checklist

  • Coverage: % WBS tasks mapped to valid CBS nodes
  • Consistency: repeated runs produce stable mappings
  • Auditability: every line has source + assumption
  • Usability: finance users can edit/approve CBS quickly

Detailed Implementation Plan (Finance Integration)

Domain Template Strategy

  • Start with 5 templates: software, infra, manufacturing, nonprofit, public sector.
  • Fallback to generic taxonomy when domain confidence < threshold.

Editing Workflow

  1. Auto-generate CBS draft.
  2. User reviews low-confidence lines first.
  3. Finance reviewer signs off final CBS baseline.

Change Control

  • Every CBS edit creates a diff record with rationale.
  • Lock finalized CBS version for downstream reconciliation.

Export Targets

  • CSV for analysts
  • XLSX for procurement/accounting
  • JSON for API consumers