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My general answer to these types of questions is this… It depends on the level of reporting and control you need.
If you need to report and manage multiple layers of work at each server level, then more detailed tasks are required. For example, there maybe hardware build out, network integration, software installation, and final testing as major sub-phases, each with as many tasks as needed to provide the correct tracking level and the needed resource management levels. But if all you need is a simple tracking mechanism that a server is either not started, in progress, or done then construct the tasks at this level.
One additional item to consider is resource management. If there are many different resource skills involved and you need to know more specifically when these certain skills are needed, then lower level tasks should be used. For example, if you schedule one server upgrade task per server with all needed skills/resources assigned to that one task, then resource usage will show that all skills are needed on the first day of the server upgrade, even though a skill like software configuration may not actually be needed until the 3rd week of the upgrade. Defining more detailed tasks at a skill type level will allow you to more accurately schedule (and set team expectations) about when specific skill will be needed for each server.
Unfortunately, I don’t see that there’s one “best way” to do it. It depends on what you need for tracking, scheduling, and management reporting out of the back end reporting that should drive how you need to establish the schedule
Hope that helps