Project Management guide
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What is a Baseline in Project Management (Project Baseline)?

A baseline in project management is a clearly defined starting point for your project plan. It is a fixed reference point to measure and compare your project’s progress against. This allows you to assess the performance of your project over time.

For example, let’s say your project is on target to finish in six weeks. Is that good or bad? If your schedule baseline has a four-week completion, you can tell that there is a problem and your team may need to make adjustments to speed up your progress.

A project baseline typically has three components: schedule, cost, and scope. Often, these three baselines are separately monitored, controlled, and reported to ensure each is on track. When fully integrated, it may be referred to as a performance measurement baseline (PMB).

A PMB provides you with the ability to efficiently monitor and manage how a change in one component affects the others. For example, when your baselines are integrated, you can quickly tell how a schedule delay will impact project costs. However, many organizations do not have the tools and processes required to fully integrate the three baselines.

A baseline should be documented and controlled. It should not be changed without following formal change control procedures, such as using a change request form and following a documented change approval process. Changing a baseline frequently will make it difficult to use as a measurement for progress. The baseline may even become meaningless. However, when a significant project change occurs, a project may be re-baselined.

This means you’re issuing a new, updated baseline to measure against. If this happens, it’s recommended practice to save the old baseline first. Then create the new one as a new plan, so you do not lose that historical data.

The Project Management Institute (PMI) refers to a project baseline as the touchstone of a project. This is because it's vital that all stakeholders understand, and support, the project baseline. Plus, the lack of clear baselines is one of the seven causes of project failure.

Three benefits of having a project baseline

  1. There are three main benefits of having an approved project baseline:Improved estimates. The ability to measure your actual cost, schedule or scope against a baseline can help provide insight into where a project under- or over-performed. This knowledge can then be used to improve future project plans and estimates.
  2. Better performance assessments. As mentioned above, a baseline provides a standard to measure a project’s progress. Without one, it is difficult to compare how a project is performing.
  3. Calculating earned value. Earned Value (EV) allows you to compare actual performance against plan. But, it’s more than a simple performance assessment tool. It also allows you to analyze project trends and forecast whether a project is expected to run into problems in the future. We go into Earned Value much more in depth here.

Six problems caused by not having a project baseline

  1. There are at least six possible problems that may occur when a strong project baseline is absent:Inadequate resourcing. If you don’t have a planned schedule, you may not know which resources you will need when.
  2. Schedule delays (due to mistimed procurement, material delivery, etc.) Without knowing when you need material, it’s difficult to ensure it’s ordered on time. Especially if it’s something that needs to be ordered weeks or months in advance.
  3. Issues with quality management. An unclear scope baseline can result in substandard quality. For example, if you know paint is needed, but not what color or thickness, the outcome may not meet the customer’s quality standards.
  4. A lack of proper change management. Without baselines in place, it’s difficult to track and manage changes. In other words, you have no yardstick to measure against, so it can be challenging to know if your outcome is different than originally expected.
  5. The inability to accurately report progress. As with the earlier example, it’s difficult to tell if you’re running behind schedule if you don’t have a baseline to compare against.
  6. Customer and/or sponsor dissatisfaction. Any of the five problems just mentioned can result in poor project performance, which will mean unhappy stakeholders, including your customer and/or sponsor.

Further Reading: