Understanding Project Baselines and Their Importance In PM

Understanding Project Baselines

One of the keys to successful project management is establishing and maintaining accurate project baselines. Without these, assessing whether a project is on track and will eventually hit the desired goals becomes difficult.

The correct project baselines also ensure everyone understands expectations and can work together to meet them. On the other hand, the wrong baselines can cause problems, such as scope creep and cost overruns.

In this article, we’ll take a closer look at project baselines and their importance in project management.

Let’s get right into it.

What is a project baseline in project management?

A baseline in project management is a vital part of the planning process. It’s a snapshot of the project at a specific time, including the planned schedule, budget, and scope. Any changes that occur throughout the project can then be tracked and monitored against the baseline.

Moreover,  the baseline serves as a point of reference for project progress. By comparing the project’s current status against the baseline, you can quickly identify any areas that are behind schedule or over budget.

Why is project baseline important?

The project baseline is critical because it provides a reference point for all future project activities. It’s the starting point from which all project management decisions are made and serves as a benchmark against which the project’s progress will be measured.

Without an accurate and up-to-date baseline, it would be tough to assess whether a project is moving in the right direction.

Along with project milestones, the baseline allows project managers to see if a project is ahead or behind schedule. By comparing the current state of the project against the baseline, project managers can quickly identify any issues that need to be addressed.

In addition,  if you’re trying to improve products within an organization, the project baseline can be used as a point of comparison to see if the new processes have the desired effect. Here, you’ll need to measure Y=f(x) to see the impact of your changes.

What do project baselines do?

Among other things, project baselines help you to do the following.

1. Communicate the What, When, How, and Who of your project

A good project baseline includes enough detail to enable anyone reading it to understand what the project is about, what needs to be delivered, when it needs to be given, how things are moving, and who is responsible for which parts of the project.

2. Gain agreement on what constitutes a completed deliverable

A clear and agreed baseline enables everyone involved in the project to understand what they are working towards and what constitutes a successful outcome. This can help avoid scope creep and ensure everyone pulls in the same direction.

3. Measure progress against what was initially agreed

Measuring progress against a baseline gives you an objective way to assess whether your project is on track. If targets are not being met, this gives you an early warning sign that something is wrong and enables you to take corrective action.

4. Identify whether schedule or cost targets are at risk

If your project is behind schedule or over budget, this will be immediately apparent when you compare actual progress against the baseline. This provides an early warning sign that corrective action may be needed.

5. Understand the difference between risk and issue

Finally, managing project baselines is about steering away from the potential negatives. As such, project baselines allow you to work around risks and issues.

A risk could happen in the future and hurt your project. An issue is something that has already happened and which is breaking your project.

Identifying risks early and implementing mitigation plans can help avoid them becoming issues. Understanding the difference between risk and issues can also help you focus on the areas most likely to cause problems.

Types of project baselines

Four main types of project baselines are used in project management. These are as follows:

  • The project scope baseline is the approved version of the project scope. It includes a description of the work that needs to be done and the expected deliverables.
  • The schedule baseline is the approved project schedule. This includes each task’s start and end dates and the milestones that need to be met.
  • The cost baseline is the approved budget for the project. This includes all the costs associated with the project, such as materials, labor, and overhead.
  • Finally, the product baseline is the approved version of the product. This includes all the requirements that need to be met and the Acceptance Criteria that need to be satisfied.

Benefits of project baseline

There are many benefits to having a baseline in place for your project, and the following are some of the most significant ones:

  • Prevents scope creep – One of the primary purposes of having a baseline is to avoid scope creep, which is when the scope of a project starts to increase beyond what was initially agreed upon. If you consider any business idea you can use to make money, you need a clear baseline to track your progress and ensure that you’re not going off course. By having a baseline in place, you can more easily identify when scope creep is starting to happen and take steps to prevent it.
  • Facilitating effective communication – Another benefit of having a baseline is facilitating communication between the various stakeholders in a project. When everyone knows the baseline, it will be easier to discuss deviations from it and agree on what needs to be done.
  • Encourages teamwork – Next, the right baseline encourages collaboration. When everyone knows the baseline, they will be more likely to work together to achieve it.
  • Improves estimation accuracy – A clear baseline ensures a team is less likely to underestimate the time or resources required to complete a task.
  • Provides a point of reference for future projects – If you have a successful project with a clear baseline, you can use it as a model for future projects and ensure they are also successful.

How to setup project baseline in Nifty

Nifty is a project management software that helps you to manage your projects, deadlines, and to-dos in one place. It also allows you to create and track project baselines.

Creating a baseline in Nifty is easy. Here are the steps to follow.

Step 1: Create project milestones

A milestone is a significant event or phase in the project timeline. Creating project milestones helps you track progress and identify when specific tasks need to be completed.

step1- Create project milestones

Step 2: Add tasks

Add Tasks within Milestones so that when they’re completed, the Milestone reflects the percentage of progress across all Milestone Tasks.

step2 - Add tasks

Step 3: Set task duration

Tasks are small sections of the overall project. Indicate how long Tasks should take with Start and Due dates.

step3 - Set task duration

Step 4: Set dependencies (optional)

In some cases, Tasks or Milestones cannot start until other tasks are completed. This is called dependency. Knowing which Tasks or Milestones depend on others helps you better understand the project flow and set a realistic baseline.

step 4 - Set dependencies

Step 5: Set baseline

The baseline is the foundation of the project management plan. It is the starting point from which all programs and changes are measured. After the project baseline is set, any deviations from the baseline should be carefully analyzed and explained.

step 5 - Set baseline

Step 6: Assign team members

To complete a project, you will need a team of people to work on it. Control of what everyone is doing helps you track progress and ensure the project moves forward as planned.

Example of a project baseline in action

Let’s look at a couple examples of how a project baseline can be used in action.

Example 1:

Imagine you are the project manager for a construction project. The contractor has completed the excavation work and is ready to pour the foundation. To do this, they need your approval to continue.

You consult the project baseline and see that the approved budget for this phase was $100,000. You also see that the approved schedule called for the foundation to be poured by May 1st.

The contractor tells you that due to unforeseen circumstances, they will need an additional $20,000 to complete the work and will need until May 15th.

You review the situation and decide it is acceptable to approve the additional funds and time. You update the project baseline with these newly agreed values and give the contractor the green light to proceed.

If, at any point during the project, the contractor comes back to you asking for more money or more time, you can refer back to the baseline and remind them that these are the only changes that have been approved. This helps keep the project on track and holds everyone accountable.

Example 2:

In this case, we are going to use a local criminal attorney as an example:

Let’s say that the attorney is involved in a project involving many stakeholders. Detailed case research, reviewing evidence, and consulting with experts are just a few of the tasks that need to be completed for the project to move forward.

The attorney understands that there will be some ebbs and flows throughout the project, but they cannot afford the project to get off schedule or over budget. To keep everyone accountable and on track, the attorney creates a baseline plan that includes all of the approved tasks, budget, and timeline.

Suppose a task takes longer than expected or an expert consultation costs more than what was initially budgeted. In that case, the attorney can refer to the baseline plan to see if these changes have been approved. If they have not, the attorney knows they need to re-evaluate and make adjustments as necessary.

Project baselines are an essential part of any project manager’s toolkit. They help keep everyone accountable and on track by providing a clear and concise plan that can be referred back to when changes need to be made.

Conclusion

Project baselines provide stakeholders with a clear understanding of what is supposed to be delivered when it is supposed to be paid, and how much it is supposed to cost. Baselines also provide a point of comparison for measuring progress and performance. When used correctly, baselines can help project managers keep their projects on track and within budget.

Sign up on Nifty to create project baselines with ease!