Project managers are responsible for ensuring their project is executed according to plan. To do this effectively, they must establish a baseline that clearly describes the project scope, cost, and schedule. If deviations from the baseline become necessary, project managers must follow an agreed-upon protocol for communicating issues, determining next steps, and making changes to the plan. PMs are then tasked with revising the baseline to outline their new plan moving forward.
Understanding Project Baselines
The project baseline is simply a version of the plan that is created once the plan is stabilized—it’s the original plan plus all of the approved changes that occur throughout the life of the project. The baseline for a project consists of the scope baseline, the cost baseline, and the schedule baseline. These baselines will provide a way to measure the project's performance and analyze a project’s value. During the planning phase of a project, project managers must take care to describe the work and resources that will be required to deliver the project and achieve the project goals. The result of the planning phase is a baseline that includes your objectives, the project scope, the resources needed to complete the project, the details about the cost involved, and the project schedule.
To understand how baselines work and why they are important for any project, we'll consider the following scenario.
Scenario:
We have been assigned a new project to set up a training classroom with 50 computers, including all installed software. The stakeholder has provided a budget of $30,000 and is looking to complete the project within the next 3 months. It was agreed that the project manager would meet with the stakeholder once a week to update the project's progress. At the week 3 meeting, you communicate to the stakeholder the computer shipments are delayed by 1-week. In addition, the building rules will not allow any construction until after 5:00 PM. As a result of these conditions, it looks like the project may extend over the 3-month timeline and the workers will have to perform work on overtime, which will increase the budget. Below is a quick overview of the project parameters:
Scope: Setting up the new classroom with 50 computers including all installed software
Schedule: 3 months
Budget: $30,000
Capturing and Revising the baseline(s)
Based on the progress reported by the project manager, it’s likely that this plan will need to undergo a few changes which will impact scope, cost and time.
Before a baseline can be altered, the stakeholder must approve the changes. This process, known as performing integrated change control, ensures that all changes to the project plan follow an agreed-upon protocol. Unapproved changes should never to be added to the baseline(s). We’ll discuss this in greater detail in future posts.
Based on the current situation, the stakeholder has agreed to approve a budget increase of $10,000 as well as a extend the completion date of the project by half a month. Now that these changes have been approved, it’s time to capture those changes and alter the baseline. When performing a baseline revision, changes are made only from the current moment forward, and no revisions are made to details from the past.
Revising the baseline consists of documenting the changes to the baseline, adjusting the baseline, and keeping an accurate record of those changes. Going forward, any project performance will be measured against the new baseline. It is crucial to keep an accurate record of all revisions for lessons learned, which will eventually become part of the overall historical information once the project has been completed. In our example, we would record the change to the project budget as well as the project schedule.
Remember, the purpose of the baseline is to keep track of all variances or deviations between what actually occurs in the project and what was planned. Accurately tracking variances through proper use of baselines is paramount to project success.
Benefits of Establishing and Maintaining a Project Baseline
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The ability to measure the actual cost of a project against a baseline provides a clear understanding of where the project deviated from the plans. The basis of these differences can serve as a suggestion as to how you can improve your planning process in the future.
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Comparing the actual project results against the baseline provides an understanding of your success in executing the project. Project managers should consider how the different types of deviations (in cost, scope, and schedule) may have contributed to overall project success.
- An earned-value category can be gleaned from the baseline, which allows project managers to compare a cost performance against a plan. This enables managers to analyze project trends, determine the cause and impact of various problems that arose, and forecast issues that may arise in the future. From this information, project managers can take steps to avoid project pitfalls in the future.
Problems that arise from failure to create and maintain adequate baselines:
When companies fail to properly establish and update the project baseline, several problems may result:
- Without a baseline, it can be difficult to determine what resources are needed.
- Companies that lack the proper materials often experience schedule delays.
- In many cases, unclear baselines will undoubtedly affect the quality of the project.
- Managing and tracking changes is difficult, and often inadequate, without a baseline.
What’s Next?
Now that we’ve covered baselines, let’s talk about enrolling in one of our project management classes. Creating and managing a baseline is just one of the many elements of project management. To learn the skills that are involved in project management, many people find it helpful to enroll in one of our training classes. Take a look at our class listings today to determine which one of the classes best meets your needs.
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