Whether you’re developing a new app or training for the high jump, having a benchmark for success is key. It shows you how you’re progressing and whether you need to adjust your current game plan. But it needs to be well thought out: aim too high, and you’ll stress yourself out trying to reach an impossible goal. Go too low, and you’ll underperform.
In the world of project management, this benchmark or target is known as the project baseline. Essentially, it’s a fixed point against which you measure progress and future performance.
It’s an essential concept to understand. So, to help you get to grips, we’ll run through the what, how, and why. When it’s time to start your next project, you’ll know exactly what it involves and what you need to do. Let’s get into it!
What is a project baseline in project management?
A baseline in project management is simply a set of measurements used to track progress and performance against specific objectives. You can also use it as a reference point for future decision-making.
Let’s say you have a project that’s due to finish in six months. At the two-month mark, you check in to see how things are going. You compare your current progress against the project baseline, and you can see that you’re ahead of schedule. This gives you some options:
- You could relax the schedule a little bit, and give yourself some breathing room.
- Or, you could use the extra time to add some features that weren’t originally planned.
On the other hand, if you’re behind schedule, the project baseline can help you understand where you need to make up for lost ground.
In short, it’s a valuable tool for keeping projects on track and making decisions about how to move forward.
The core components of a project baseline
A baseline is usually made up of three components:
- The scope baseline: this includes the project objectives, deliverables, and requirements.
- The schedule baseline: this covers the project timeline, milestones, and deadlines.
- The cost baseline: this outlines the project budget, costs, and funding.
Imagine being tasked with developing a new software application. Some key metrics you might use to establish a baseline could include:
- The amount of time it takes to develop the app
- The number of defects or errors in the code
- The level of customer satisfaction with the final product
Once you have these benchmarks established, you can track your progress against them throughout the project. If at any point you start to deviate from the baseline, it can be an indication that something is going wrong.
Top tip: once you’ve established these three elements, consider them more or less set in stone. Changing them would make it difficult to accurately measure progress — so, hands off!
What are the benefits of having a project baseline?
There are five key reasons why having a baseline is so important in project management:
- It provides a clear target for the project team to aim for. Without a baseline, it can be difficult to measure progress and know whether or not you’re on track. By having specific goals, everyone knows what they need to do and can work together to achieve them.
- It helps identify issues early on. If something starts to go wrong, a project baseline can help you spot the problem early and take corrective action. This can save time and money in the long run, as problems are much easier to fix when they’re first identified.
- It allows you to track progress. A baseline provides a clear way to measure how well the project is doing. This information can then inform decisions about the future of the project, such as whether or not to continue with it or make changes.
- It makes it easier to estimate future projects. Once you have a baseline in place, you can use it to estimate the time, cost, and resources needed for future projects. This can be a valuable tool for planning purposes, as it can both save time during the planning stage and help you secure and allocate resources more effectively.
- It helps you calculate earned value. Earned value is a measure of how much work you’ve completed so far against your original plan. This information can help you make decisions about the project, such as whether or not it’s on schedule and within budget.
- Check out our guide to earned value management
What problems might you encounter without a project baseline?
If you don’t have a baseline in place, you might encounter a few issues, such as:
- Difficulty measuring progress: without a baseline, you won’t have a clear way to track how well the project is doing. This can make it difficult to identify issues early on and take corrective action.
- No clear target for the team: without a baseline, it can be hard to know what they need to do and by when. This can lead to confusion and frustration amongst the team and, ultimately, impact the quality of the final product
- Decisions based on inaccurate information: if you don’t have a baseline, you may find yourself led astray by dodgy data, which will impact your ability to make informed decisions about the project’s future. This could lead to wasted time and money down the line.
- Inadequate resourcing: no baseline means you could struggle with accurate resource allocation. This can impact the quality of the final product and lead to delays.
- Issues with quality: without a baseline, it can be difficult to spot issues with the quality of the project. This can lead to problems further down the line, such as customer dissatisfaction or recalls. And they cost money (not to mention cause frustration all round)!
- A lack of adequate change management: you might not have a clear process for managing changes to the project. This can lead to confusion and costly delays.
How to set a project baseline
Now that we know what a baseline is and why it’s important, let’s take a look at how to go about setting one. There are four steps you need to follow:
1. Define the project’s scope
The first step is to clearly define the objectives of the project. What exactly are you trying to achieve? What are the deliverables? What are the requirements? Once you have answers to these questions, you can start to put together a baseline.
- Read our guide to creating a project scope document for more tips
2. Create a project schedule
The next step is to create a project schedule. This should include all of the milestones and deadlines for the project, as well as a timeline for each task. We recommend using a cloud-based Gantt chart for this.
A cloud-based Gantt chart is the best choice for creating a project schedule because it makes collaboration easier. You can add tasks, milestones, and deadlines and share the chart with others who need access — all in real-time, so you’re always up-to-date. Plus, all your data is stored in the cloud, allowing the whole team to access it from anywhere.
3. Estimate the project costs
The third step is to establish the costs associated with the project. This includes the budget and any other costs. Once you have all this information, you can start to put together a cost baseline.
3 popular cost estimation techniques
- Delphi estimating: this popular method for calculating costs involves breaking down the project into smaller tasks and estimating how much each one will cost. The estimates are then collected from a panel of experts and averaged out.
- Analogous estimating: this involves looking at similar completed projects and using the information to estimate the cost of the current project. For example, if you’re building a house, you might look at the cost of similar completed houses.
- Parametric estimating: this is a more complex method that involves using mathematical models to estimate the cost of a project. For example, you might use the parametric estimation technique to figure out the cost of building a bridge based on the length and width of the bridge.
Once you’ve worked out your costs, make sure it tallies with your schedule. If the two don’t match up, something is likely to go wrong further down the line. It’s also a good idea to learn a technique known as Estimate at Completion, which will help you plan costs when unexpected changes throw things off track.
4. Get approval from stakeholders
Getting approval from the stakeholders is important, as they need to sign off on the baseline before the project begins. Once you have approval, you can start to work on the project. And if anything changes, you can always go back and refer to the baseline to make sure you’re still on track.
A real-world project baseline example
Let’s take a look at a real-world example of a project baseline.
Let’s say you’re developing an app. Your manager has given you a budget, and your objective is to have a usable, bug-free app by the end of the year, along with a set number of downloads in the first month.
Using this example, your project baseline could look something like this:
- Objective: to have a usable, bug-free app by the end of the year and 5,000 downloads in the first month.
- Scope: the project scope includes the development of the app, testing, and launch.
- Schedule: six months with milestones for each phase of development, as well as a timeline for the launch.
- Budget: $25,000
In this example, you should first outline the tasks, which will form the basis of your schedule. This could include design and developer briefs, a prototype, user testing, app store submission, and launch.
You should then break down each task into smaller milestones to track your progress and ensure you stay on schedule. For instance, the design milestone could include the completion of the design brief and the prototype. The user testing milestone could include recruiting users and conducting the tests, and so on.
Can you change a project baseline?
Adjusting a project baseline isn’t ideal, but yes, it is possible to change it after project kick-off. But it’s important to note that stakeholders should approve any changes.
This is because the baseline is a fixed point for measuring progress, and stakeholders tend to have the final say as to whether a project has been a success or not. So, if you chose those specific goalposts, make sure all invested parties know about it. This means officially updating the scope, cost, schedule, and objective.
A project baseline is a vital tool for project managers. It provides a clear and concise way to track the progress of a project, as well as a reference point if anything changes.
Project management software can be hugely useful when setting and managing baselines.
With Backlog, our own PM tool, project planners can simply create a new project, add objectives, set the scope and schedule, and invite the team to get started. Then, once the project has begun, everyone on the team can log in and see detailed progress reports in real-time. No more chasing progress reports, and there’s full transparency across the whole project, from a big picture view right down to the tiniest detail.