Wouldn’t it be wonderful if all our projects ran smoothly, with minimal input from project managers? From conceptualizing scope, assigning resources, creating tasks and delivering desired results on time and within the budget – the client would be so happy. And, imagine if, before we even wrap a project up, we’ve started another project, fully prepared to ace it again.
But, unfortunately, this is a far-fetched dream, far different from the reality most project managers experience. In real life, projects often don’t deliver the expected results, miss scope, and fail in the middle. According to a report published by the Project Management Institute, around 33% of projects fail globally. This can be attributed to various things, like inaccurate requirements, low estimates, shifting project objectives, uninvolved project sponsors and more.
Among all the tasks involved in a project, the one component that has the most significant impact on a project’s success is the project baseline.
So what do you need to know about baselining a project? And what can you do to ensure a successful project baseline? Read on to learn all about project baselining, and how to avoid the pitfalls that can lead to a project disaster.
What Is a Baseline In Project Management? (Project Baseline)
A project’s baseline is its predefined starting point. It is decided at the beginning of your project after deliberation with a client or project manager. More specifically, it is an initial plan you create to determine the project expectations, deliverables, scope, schedule and budget.
The project baseline lets you monitor your project’s performance, assessing whether it’s on track and within the defined budget. Further, it helps you spot potential problems and recognize areas for improvement. Without a project baseline, you can face missed deadlines, cost overruns, scope creep or even project failure.
What Are the Components Of the Project Baseline?
The project baseline consists of three major components: scope, schedule and budget. Usually, these three elements are individually monitored, controlled and reported to ensure the project is on the right track. When unified, these are referred to as the performance measurement baseline (PMB).
Let’s review each component in more detail:
1. Scope Baseline
The scope baseline is the approved scope statement. It comprises all project requirements divided into tasks, sub-tasks and milestones. It is a detailed snapshot of all project deliverables. Scope baseline is used as a basis for comparison between approved project deliverables and the actual project deliverables.
Further, it encompasses of three elements:
- Scope Statement: It is the synopsis of the entire project with characteristics, objectives and deliverables
- Work Breakdown Structure (WBS): This is the breakdown of the project into smaller projects or milestones
- Work Breakdown Structure Dictionary: This provides detailed information about the activities and deliverables of the work breakdown structure
2. Cost Baseline
This is the total cost for a project or the approved budget; It determines how and when money should be spent.
3. Schedule Baseline
This is the project’s timeline, which helps ensure project completion on or before the deadline and within the allocated budget. It consists of start and end dates, assigned roles, and a rough estimate, which you decide before the project begins.
The project baseline is an integral part of project management that helps evaluate the project’s health throughout its life cycle.
Why Is the Project Baseline Important?
A project baseline allows you to efficiently oversee the entire project, keep track of milestones, spot problems, and understand delays or cost overruns. Further, it aligns all stakeholders on objectives and key results (OKRs).
For instance, if you compare a project’s progress to its baseline and notice that the project is running behind schedule or exceeding its budget, you can modify the project by assigning more resources or extending its deadlines, as per the client’s suggestion.
To understand this better, let’s take a closer look at all the benefits of setting a project baseline:
1. Provides a Performance Evaluation Standard
The most important benefit of having a project baseline is that it provides a standard measure of performance and progress. It equips you with standards you can compare actual progress to. It also helps you identify problems that may arise in the future. The project baseline shows when everything is on track and within the approved budget and deadline, and warns you if it isn’t.
2. Provides Refined Estimates
A project baseline helps in measuring and comparing schedule, cost and scope. It also provides deeper insight into whether the project is on the right track and progressing well. This information is used to improve future plans and estimates for a project.
3. Allows Calculation of Earned Value
A project baseline allows you to calculate the project’s earned value. This is a way to measure the actual performance and compare it to the projection. It also helps compare actual work hours and costs with planned ones.
A project baseline enables you to analyze project trends and performance, to predict if a problem is likely to arise in the coming days.
4. Helps Avoid Project Bottlenecks
If anything goes wrong in your project, the project baseline helps you spot the problem early and take corrective action. This saves time and money in the long run, as issues are easier to fix if they are identified early.
Applying risk assessment allows teams to identify potential problems that could arise, analyze their likelihood of occurring, take action to prevent avoidable risks, and minimize the risks they can’t avoid.
How To Set a Project Baseline?
To set a baseline, you must create a detailed project plan. This plan will act as a foundation for the project. The common components of a project baseline are as follows:
Synopsis of all the tasks and deliverables for the project.
These are the significant tasks that must be completed, which will be considered checkpoints throughout the project life cycle.
How much time will be required to complete each task listed in the WBS.
The estimated date of each task, activity and deliverable.
Amount allotted to carrying out the project. Having an approved budget is critical for tracking expenses and comparing actual costs.
Below are the steps to creating a project baseline:
Document all necessary requirements
There are many things to manage in a project, from product development to lining up skilled resources to monitoring daily progress. This means a lot of information will be captured, shared and discussed.
The project baseline helps document deliverables, project requirements, milestones, challenges and adherence to deadlines. To ensure the project runs smoothly, you need a professional service automation tool that can reflect the correct data at any time.
Set a realistic budget
A realistic budget is another crucial step for project success. It is important since it defines how much the client agreed can be spent during each milestone of the project, as per their contract.
However, no matter how carefully you plan every detail, you should understand that your project may run into trouble. Thus, leave room for error in cost estimates and for any modifications the client may ask for at a later stage.
Create a Project Schedule Baseline
This step is a benchmark to monitor the project’s progress. It is also used to address any change in the scope of work. A project schedule baseline is created after all the tasks, activities, milestones and deliverables are identified during the planning phase.
The schedule baseline comprises a start and end date and a list of tasks to be completed, while adhering to the deadlines. The schedule of tasks is represented as a Gantt chart making it easier to monitor.
Create tasks and allocate resources
During this step, you’ll create project tasks and assign resources to them, considering whose skill set matches best for each project and task.
Allocating resources helps you determine which resource has the bandwidth to take up a new project and who is fully utilized. Further, it equips you to monitor the capacity of each individual and of the entire team to complete the project successfully on time.
Set up a meeting with stakeholders
A meeting with stakeholders helps keep everyone on the same page. During the meeting, explain the plan for executing the project successfully. This meeting helps stakeholders understand the project, key milestones, deliverables, expected costs, and necessary approvals.
Execute the project
Once the baseline is created, the next step is to start executing the project. Assign tasks to available resources and start tracking their progress and the cost involved.
As the work progresses, update your tracking tool regularly to monitor factors impacting adherence to budgets and deadlines.
Example Of a Project Baseline
Imagine, a client has asked you to create an app for its existing website. You have been allotted a budget of $200,000, and your goal is to complete the project within the allocated budget and time.
Thus, the project baseline would be similar to this:
- Scope/Deliverables: An app
- Cost: $200,000
- Schedule: Three months
In this project baseline example, let’s say we spend $145,000 within 30 days of the project kickoff. What would it conclude? Maybe a trend toward cost overrun.
But, if the budget is $300,000 and things are progressing on time, and the last phase of the project is nearly complete, you would likely conclude that the project is on track and within the defined budget.
Can a Project Baseline Be Changed and When?
Typically, a project baseline is documented and should not be changed. However, if needed, it can be altered through a change management process based on a change request.
For instance, if a client wants to add an extra feature, they need to submit a change request. After that, the request would be evaluated for its impact on the project timeline. And, finally, the project should be re-baselined.
Frequently changing a project baseline will make it hard to use as a measurement of the project’s progress.
If a significant change is inevitable, a project can be re-baselined. This means issuing a newly updated baseline. However, be sure to save the first baseline so that the project’s historical data isn’t lost.
What Problems Can Result From Having No Baseline?
As we know, having a project baseline helps to keep a project on the right track. But what if you don’t establish a baseline? Some of the following problems could occur:
1. Insufficient Resourcing
If a scheduled resource is absent, you may not be able to identify what type of resource you require and when.
2. Schedule Delays
Without a proper baseline, schedule delays are more likely to happen. According to the Project Management Institute, inaccurate time estimates lead to 25% of project failures.
3. Problems of Quality Management
An unclear scope may result in deliverable quality failing to meet client expectations, since those expectations were never defined.
4. Improper Change Management
It’s complicated to track and manage changes without a proper baseline. Since the baseline serves as a benchmark, without a baseline, it is impossible to understand whether the deliverable meets expectations.
5. Inaccurately Monitoring Project Progress
No project baseline will result in errors when monitoring project progress, since no reference point is available. This is why a deadline should be set for all deliverables.
6. Poor Client Satisfaction
All the problems listed above will result in poor project performance, ultimately leading to poor satisfaction among clients, stakeholders and sponsors.
Frequently Asked Questions
What is a project baseline?
A baseline in project management is the starting point for a project. It is a reference point to measure and compare the project’s progress within the scope, scheduled time and budget.
How do you set a project baseline?
To set a project baseline, define a detailed scope, cost and schedule for the project. The combination of these three is considered the project’s performance measurement reference. Then, break down all the deliverables into individual tasks and subtasks with comprehensive descriptions and deadlines.