Project Baseline in Project Management: A Starting Point to Monitor Performance

When managing a project, it’s hardly possible to stick to the original plan without making any changes to it throughout the entire project lifecycle. In most cases, changes are inevitable and even necessary, as they allow the project team to deliver a product that will meet the customers’ needs to the fullest extent. However, we know that uncontrolled changes can put the successful project delivery in doubt. So, we need a certain reference point to be able to track the project’s progress and make sure that the project hasn’t taken the wrong turn. This is where the project baseline comes into play.​

What Is a Baseline in Project Management?

A project baseline can be defined as an approved project plan with or without any approved changes. In other words, it’s a starting point that allows a project manager to measure the progress of a project and overall performance as well as compare the actual state of things with what has been planned. It’s a very important element that makes it possible to distinguish between a successful and failed project, so it shouldn’t be overlooked.

The baseline plan is usually set in between the planning phase and the actual start of the project. The most common project baselining mistake is replanning it every time a variance occurs. In this case, there won’t be any original baseline to return to and it will be equal to having no baseline at all. However, major changes to the project such as significant delays or cost overruns require re-baselining.

What is a baseline project plan?

A baseline project plan is a validated version of a project plan that serves as a reference point for monitoring project progress and performance. The key components of a baseline project plan are scope, schedule, and cost baseline, i.e., it’s a document that unites all the baselines.

Types of Baseline in Project Management

Project baselines fall into three types according to the triple constraints: scope, schedule, and cost. All of them must be approved by key stakeholders and monitored regularly to ensure that the project is kept on track: problems with one of the types can affect the other ones or even the project outcome if no necessary actions are taken. Let’s consider the three types of baselines in project management in detail.

Scope baseline

A project scope baseline is an approved version of a scope statement, work breakdown structure (WBS), and related WBS dictionary. It also involves all the requirements to the project and provides an overall vision of what the project is going to deliver in the end. The initial scope may change over time for various reasons (e.g., when customers requested adding some new features), but it’s important that every change must be approved according to the change control process, i.e., the decision on making changes is made after a thorough analysis of its possible consequences.

Schedule baseline

Project schedule baseline is the planned project schedule approved by stakeholders, which is also a component of a project plan. The basic purpose of a schedule baseline is to make sure that the project won’t miss the deadline. Also, a schedule baseline makes it possible to monitor the project’s progress as long as you can compare the delivered work over a certain period with what has been planned. Typically, developing a schedule baseline consists of the following activities:

• Identifying project tasks,
• Determining their duration,
• Setting milestones,
• Determining dependencies between the tasks,
• Adding resources.

Project management software usually makes this procedure much easier: Gantt Chart is the right tool for creating a project schedule that can be saved as a schedule baseline.

Cost baseline

A cost baseline in project management can be defined as the approved variant of the time-phased project budget, which doesn’t include any management reserves. Being the basis for any change management process, it cannot be changed without going through a formal change control process. Also, the costs are distributed across the approved project schedule.

A cost baseline is the basis for comparing actual costs with the planned ones. This baseline combined with change requests makes it possible to keep track of increasing project costs.   

Why Is a Project Baseline Important?

As long as any project is likely to be exposed to changes, it’s a good idea to use a project baseline to observe how these changes affect the schedule, scope and budget (e.g. a delay in the schedule will affect the project budget and can even change the scope) as well as identify potential problems. It’s like establishing certain borders of a project that cannot be crossed without agreeing upon the feasibility of these actions. A lack of a project baseline can lead to uncontrolled changes which in turn result in scope creep and even project failure.

Also, a project baseline has the following benefits.

• Better performance assessment.

A baseline in project management works like a standard for assessing a project’s progress to make sure whether you’re on track or not.

• Earned value calculation.

This PM technique is used to compare actual project performance against the initial plan as well as to forecast future problems: you can monitor a project plan, actual and completed work to know if the project is on track. In addition, this information can be used to avoid project bottlenecks in the future.

• More accurate estimates.

Comparing actual costs, schedule, and scope against the baseline enables project managers to analyze the project’s strong and weak points. Therefore, this knowledge can improve planning and estimates of future projects.

• Monitoring project progress and performance.

A baseline project plan is used to compare the actual project performance over time (e.g., the time or budget spent) with what have been approved in the beginning. This helps track deviations from baselines.

• Managing changes.

If any change requests occur, you can assess their impact by referencing project baselines. This will allow you to manage changes more effectively.

• Providing data for performance reporting.

The project baseline plan can be used to provide stakeholders with insights into project performance.

Finally, a project baseline is one of the necessary components of successful project management, which helps project managers navigate the flow of changes and drive projects towards successful delivery.

When Do You Need to Revise the Baseline?

Sometimes, nothing is going the way it’s been planned: for example, unforeseen circumstances may lead to significant changes that impact the project performance and the baseline in particular. In this case, it’s better to change the original project baseline, as it becomes irrelevant. In response to a certain situation, a significant change can be approved by a key stakeholder (e.g., extending the initial budget), consequently, the initial baseline will require revision.

Revising the baseline involves documenting the changes to the baseline, adjusting it, and keeping a record of those changes. This reviewed baseline will be used to measure the project performance. Recording baseline revisions can become a helpful experience for future projects.

Below are examples of when the baseline should be revised:

• When following the current schedule makes it clear that the due dates will be missed,
• When half of the scheduled targets have been missed,
• The critical path changes as a result of scope changes and major delays,
• The project falls behind the schedule by more than 10% of the duration,
• When external circumstances impose new conditions that are inconsistent with the initial baseline.

Obviously, there are more reasons for revising the baseline, and the decision made for every particular project will be different. What remains important is that rebaselining can be a good solution when the flow of changes washes away your initial project baseline.

To manage project baselines effectively, especially when you have multiple projects in the pipeline, you may require the assistance of a robust project management tool. Let’s consider its capabilities assisting with baselining a project in the section below.

Managing Project Baselines with Epicflow

Epicflow is a multi-project resource management solution that has a diverse functionality for easy and effective management of simultaneous projects with a shared resource pool. Here’s how Epicflow deals with baselines.

• Baseline tracking and monitoring.

Epicflow enables real-time tracking of the actual progress of a project against baselines (e.g., tracking remaining time and budget), which helps project managers ensure that their teams are on track.

• Data-driven baselining.

Unexpected changes and risks can cause deviations from the original project baselines. Epicflow’s What-if analysis feature allows project managers to simulate various scenarios and assess their potential impact on the project baseline. As a result, they can establish realistic and accurate baselines or adapt them effectively if necessary.

• Proactive risk management.

Effective baseline management requires active risk mitigation. Epicflow helps forecast potential risks and bottlenecks so that project managers can address them before they impact the project baseline. Being prepared for risks proactively allows managers to minimize disruptions that could derail the project.

• Flexibility.

Projects aren’t immune to changes and uncertainties. Epicflow facilitates flexibility of the workflows by setting priorities and recalculating them when necessary. In addition, our approach involves protecting key milestones and the due date with buffers. This flexibility gives you an opportunity to respond to changes effectively and at the same time not go beyond the project timeline and budget limits.

In addition to the above-mentioned capabilities, Epicflow offers powerful features for seamless resource and multi-project management. Contact our experts to learn more about our approach to achieving resource efficiency and delivering concurrent projects successfully.

Conclusion

As we can see, creating a project baseline is an important part of managing a project that shouldn’t be overlooked: it allows project managers to track the project’s progress by means of comparing its actual state with what has been planned, see how changes affect the project’s scope, schedule, and budget, and take these changes under control. Regular monitoring of a project baseline (including scope, cost, and schedule baseline) helps keep the project on track.

Frequently Asked Questions

What are the benefits of project baselines?

Project baselining is the basis for planning and monitoring project execution. It helps monitor project progress and performance, manage change, improve time and cost estimates, and set realistic stakeholder expectations.

When is the project baseline established?

A baseline plan in project management is created during the planning phase: as soon as the project’s scope, schedule, and budget are approved and before the actual start of project execution.

What are the 3 different types of baselines in project management?

There are three types of project baseline corresponding to the triple constraints of project management: scope, schedule, and cost. The baselines formalize these key parameters for further project work; changing them is only possible through the formal change control process.