Project Baseline: How to Create and Manage

To track project success without a clear reference point is like navigating without a map, moving forward, but not being able to determine if the project is heading in the correct direction. I have seen numerous projects fall apart simply because they cannot answer a fundamental question. Are we on track?

A project baseline describes project performance. It is measured against the captured scope, schedule, and budget, which are defined at the beginning of the project. Project managers pursue PMP certification training because they understand the importance of using baselines for better project control and performance measurement. According to statistics from the Project Management Institute, only 29% of projects are completed on time, and only 59% are completed within the budget. Managing baselines correctly improves these figures substantially.

A project baseline refers to something that has not changed. It is the originally approved version of the project describing its scope, schedule, and budget. It is established before work begins and serves as the standard for measuring performance against the plan. It tracks its progress against the plan and identifies any deviations as a result of changes, delays, or cost overruns. The importance of this concept is emphasized throughout PMP training, where professionals learn to apply baselines as a core performance control mechanism.

Project Baseline vs Project Plan

A project management plan is comprehensive, serving as a roadmap for the entire project. The baseline is a concise tracking document that makes the work easier for you and your project team.

Scope Baseline

The scope baseline explains the stakeholder-approved project deliverables you plan to achieve. Within your project baseline document, you need to specify what is included in the project's scope of work. This should be a concrete breakdown of tasks that can be monitored at an individual level.

According to PMI, about 35% of projects suffer from scope creep. Project baselines are an ally in maintaining firm boundaries against undesirable scope additions. By regularly referring to your project baseline, you are able to make adjustments and stay aligned with the initial plan.

Schedule Baseline

Each task within the project schedule has planned start and finish dates. These dates help define a project moveable schedule baseline. Although in a project schedule there are three main components (scope, time, and cost) the time component gives the most flexibility in making project changes. Project time management becomes even more important when taking into consideration the fact that only 29% of projects finish within the time frame originally planned, thus suggesting that there is plenty of room for improvement if more precise time estimates are provided. Within project management, understanding project budgets and budgeting in project management helps managers see how time estimates and costs interrelate throughout the project lifecycle.

Cost Baseline

For each of the tasks in your scope list, the cost baseline is created by estimating the cost associated with completing the task. These estimates should include all expenses, ranging from personnel and other resources to materials. For each task, document the budget already created so that throughout the project, you can track the spending against the budget.

PMI states that 59% of all projects meet the defined budget. It is a reasonable projection to say that if you create and manage the project's baselines, you can avoid the budget-blowing group for your project.

The Wellingtone report, published in 2020, states that 50% of project managers utilize schedule baselines for tracking project progress. Here's why:

Monitor Progress Towards Goals

• Gauge progress versus goal.
• Determine the area of deficit
• Evaluate the efficiency of team members
• Stakeholder communication

Scope Creep Management

• Politely refuse to accept additional deliverable requests
• Avoid schedule and budget disruptions
• Prevent team burnout
• Stay on course with the original deliverables

Facilitate Reallocation of Resources

• Identify blocked progress
• Channel resources to critical tasks in jeopardy of falling behind
• Be an optimal resource management tool

Manage Schedule Delays

• Keep interdependent tasks on track
• Ease the complexity of the project
• Avoid negative impacts

Keep Budgets Under Control

• Avoid overspending on particular tasks
• Stay within the agreed budget
• Spot deviations from the budget early
• Shift budget between tasks

Anticipating and understanding types of project risks will help you identify potential deviations from baselines in the future and prepare accordingly.

Step 1: Select Your Project Management Software

Before setting baselines for your project, select a software that allows for sufficient recording, monitoring and editing of tasks. Along with the necessary features to set timeframes and budgets for tasks.

For every type of project and workflow management, there are tons of available software tools, most of which try to make tracking and implementing projects more seamless and effortless.

Step 2: Set Your Project Scope Baseline

Setting your project scope baseline entails identifying which project scope items have been signed off on by your clients or stakeholders.

Your Work Breakdown Structure (WBS) is your best resource for compiling this list. The WBS is a visual representation of all of the tasks and activities that have been planned. You can use this to quickly move items into the scope section of your project baseline.

Step 3: Build Your Project Schedule Baseline

Now it is time to build your project schedule baseline. For each scope item, use your project plan to set a start and end date.

If you have not done so yet, include a buffer period for each task. That way, you'll have the ability to make up for delays without impacting the due date. Using project schedules from previous similar projects may help you make more accurate predictions.

Step 4: Defining Cost Breakdown Baselines

Attach a projected budget or planned expense for each scope item, so you have a number next to each deliverable. Consult previous projects to estimate costs. If you have past project records that include the cost of resources and materials for the tasks that comprise the deliverable, use that to calculate an accurate project estimate.

Cost estimation is one of the many skills and competencies acquired by professionals undertaking PMP certification training that contribute to the effective management of project baselines.

Step 5: Share and Track with Stakeholders

Once you have established your project baseline, you may share it with your clients or stakeholders, depending on how you intend to manage the project. Otherwise, you may keep it as a private reference document for monitoring and tracking performance, updating clients separately.

When clients and stakeholders are allowed to interact with the baseline and are able to see it as the project progresses, it promotes transparency and fosters greater trust. Having baseline access eliminates back-and-forth emails that are usually requested for status updates.

Project baselines can only be changed by formal change control procedures when scope changes have been approved. Making changes to project baselines frequently defeats the purpose of loosening the fixed reference that the baseline is meant to provide.

When there are appreciable changes, one needs to do some variance analysis to frame the scope, outline the impact on objectives, and evaluate the need, if any, for re-baselining. With performance indicators and status reporting, there is, along with baseline integrity, the status control of the projects.

Project leadership nuances are significant in guiding the stakeholder discussions as baseline changes become necessary.

1. Establish Baselines That Are Achievable

• Engagement of all team members in the estimation is critical
• Use existing data if applicable
• Contingencies should be allocated properly
• Stakeholder engagement is indispensable.

2. Set Change Control Parameters

• Approval control levels should be clarified
• Prepare templates for change requests
• Establish timelines for reviews
• Document all changes that are approved

3. Set Change Control Parameters

• Review progress periodically
• Dashboards for visualization
• Use data trends for forecasting
• Identify problems before they become serious

4. Set Change Control Parameters

• Provide all stakeholders with a copy of the baseline
• Provide updates on the current status
• Explain any variance
• Praise and recognize achievement as necessary