What is a Baseline in Project Management?

While not living life by a rule book is often revered–even glamorized, the same theory cannot be applied to the world of project performance. A project manager understands the importance of using the scope, deadlines, budget, etc., to a project. In other words, they live and swear by project baselines.

This brings us to the next question:

What is a Project Baseline?

A project baseline is the starting point of your project plan. Period. You use this 'fixed' reference point to analyze the progress and performance of your project over time. In simple words, if you wish to understand how knee-deep you are in the project, you should look at your project baseline.

Clearly, this is metric is important to project success or project failure. Let's move on to understand the components of a project baseline that together are referred to as the performance measurement baseline (PMB).

What are the Three Components of a Project Baseline?

A project baseline worth its salt comprises of three components, collectively known as the performance measurement baseline:

  • Schedule baseline
  • Cost baseline
  • Scope baseline

As you might have guessed, all these components are monitored and reported separately to ensure that every component is on track.

So why is PMB useful?

1. It allows you to understand the effect one component has on other components if there is any change.

2. It paves the way for an integrated view of important elements such as project schedule, costs, etc.

The learning? Integrating the three baselines with the necessary tools and processes plays an instrumental role in driving project success.

Why is Baseline in Project Management Important?

A project baseline literally lays the foundation for project success. It acts as a key tool for:

  • Providing visibility into every team member's core tasks
  • Driving productive outcome
  • Monitoring project progress as well as performance
  • Figuring out potential issues and areas for change

In other words, not having a clearly defined project baseline can lead to scope creep, cost shoot- ups, deadline delays, and inevitable project failure. This is why all partners, customers, and stakeholders must be aligned, aware, and supportive of the project baseline during the project lifecycle.

What are the Advantages of a Project Baseline?

Having a well-structured and approved project baseline offers the following seven-fold advantages:

1. Get access to insightful information: Project baseline helps you measure your actual cost, schedule, or scope against a set benchmark, right from the very beginning of the project. This data, if extracted correctly, can throw light on whether your project is underperforming or over-performing. Making use of this knowledge in real-time ensures that all your project plans and estimates are future-proof.

2. Calculate earned value: You can calculate your earned value (EV). EV is a performance assessment tool that allows you to compare actual performance against the project plan. Additionally, you can analyze project trends, forecast, and issues, and tread in a more informed capacity.

3. Optimization of resources: Your project baseline allows you to plan your schedule around available resources and assets, and ensure seamless project delivery.

4. On-time project delivery: Project baseline can empower you to work ahead and proactively prepare for material availability, resource availability, etc., weeks or even months in advance.

5. Ace deliverable quality and boost customer happiness: A well-organized, detailed, and clear scope baseline can ensure that your end product's quality does not get compromised. At the end of the day, it is the attention to detail that matters, which a project baseline offers project managers in abundance. This ultimately results in productive project performance and happier customers, stakeholders, and partners.

6. Streamlined change management: Baselines allow you to track and manage changes in a streamlined capacity. They act as a powerful yardstick to measure changes (and expectations) in case the project seems to be going off track.

7. Accurate and reliable progress documentation: Since project baselines factor in critical components such as scope, cost, and schedule, you can document data correctly, holistically, and reliably.

How to Set a Project Baseline?

If you're wondering about how to set a project baseline, follow this easy six-step process:

Step 1: Nail Your Scope Baseline

Start by identifying the scope of your project. Ask yourself the following questions such as:

  • What are the expected project goals?
  • What business needs/problems does the project solve?
  • What are the key milestones?
  • What does your delivery approach look like?

Using the answers from above, you can chart out a scope statement, which includes your project goals and deliverables.

Step 2: Break down and categorize the inputs into a work breakdown structure

Your work breakdown structure should:

  • Outline all the work that needs to be done to reach the end-goal and the resources required to get the work done.
  • Categorize bigger deliverables into smaller ones, so that the path to completion is simplified and easily understood among all team members.
  • Divide the work into individual tasks and subtasks. Do not forget to add detailed descriptions so that there's no room for error or guesswork.

Step 3: Create your project schedule

Do this by factoring in the milestones, due dates, and a final deadline. You can use a Gantt chart to predict the timelines for each task and then allocate resources as needed.

Step 4: Plan the total cost of your project

Make sure to include key elements such as hourly rates, available resources and assets, and PPC costs.

Step 5: Link your budget to your schedule

Do this so that the two are in sync, at all times.

Step 6: Work towards stakeholder buy-in

Fix a meeting to discuss your plan, cater to any queries or concerns your customers/stakeholders may have, and keep making the changes in real-time. If drastic changes are happening, make sure to answer the following questions:

  • Who needs to be alerted
  • What processes and systems will need to be followed
  • How will the changes be funded?

The end-goal here is to single out potential flaws and roadblocks in your plan and address them– before your project even kicks off the ground.

Is it Possible to Change a Project Baseline?

Well, the answer is yes and no. No, because:

  • Changes to your project baseline should be controlled, as making modifications too frequently can make it challenging to measure progress.
  • Making changes without a formal change control procedure can drive confusion. For instance, people might not be aware of new deadlines if real-time updates are not provided. To discourage, frequent changes, make sure to have a change request form and a strict approval process in place.

So when should you be making changes? You can re-baseline your project when a significant change occurs. However, make sure to save the older baselines so that you do not lose track of historical data and lessons learned by analyzing the project efficiency later on.

Wrapping Up

Here's the long and short of it: Your project baseline is essentially your project’s cornerstone. Every collaborator on the project–from the project manager and team members to the stakeholders and customers–need to understand, approve, and support it to ensure high-quality project deliverables and everlasting success.