What Is a Project Baseline and Why Is It Important?

"Time does not heal anything; it just takes everything along with it." This applies to all aspects of life, both personal and professional. 

Regarding project management, though, what drives a software organization ahead — apart from a good manager and team members?

A project baseline is considered an essential part of business and project management, as it allows project managers to track progress, adapt to changes, and finish projects on time and within budget. Its absence could affect the project's progress.

A baseline in project management is the starting point of any project plan. The initial plan you create with stakeholders defines the project expectations and deliverables, including schedule, scope, and cost. It allows you to assess your projects' performance over time.

For example, let's consider your project is on a target to finish in 6 weeks. If your project baseline has a four-week completion target, your team can make adjustments to speed up your progress. A 2020 study by the Project Management Institute says that companies completed 67% of projects within budget and 63% on time. The project baseline is one of many differences here, but it is always a good step in the right direction. It sets an essential point of comparison throughout the project's life cycle.

Let's take a closer look at the importance of a project baseline and how to create one so that you can learn crucial lessons and efficiently manage your projects every time. 

What Is the Importance of a Project Baseline? 

A project baseline is a crucial tool for successful project outcomes. It helps you oversee and monitor performance, identify potential problems, and quickly recognize areas for change. A lack of a project baseline can lead to cost overruns and failure. 

A project baseline allows you to monitor and assess your project's performance over time, check whether you're on track and within budget, and identify areas for improvement. 

A sound software system will enable you to plan your project and create a project baseline that provides visibility to every team member. 

Benefits of a Project Baseline

There are three main benefits of a project baseline:

Accurate estimates: When you create your plan, you measure how long each task will take and how much effort will be required to complete. You may also want to know the costs for your work done and what the revenue will be. A project baseline can measure your cost, schedule, and project scope. These insights can be used to improve future project plans and estimates.

Improved performance evaluations: If you know your plan, you can compare it with the actual and see whether you're on track. If you record the solid hours spent on the task, it will calculate the absolute percentage value. 

Determine earned value: It allows you to see trends in performance and thus predict potential overruns. It often includes the calculation of a performance indicator, analyzes project trends, and forecasts whether a project is expected to run into problems in the future.

How Do You Create a Project Baseline Plan? 

The best way to create a project baseline is to start with a statement of the project's scope, objectives, and participants. With this, you'll be able to determine the milestones, a budget, and a schedule. 

Let's have a look at the steps to follow: 

Step 1: Establish the scope baseline

Defining your project's scope is the first and foremost thing to create a baseline. You can start by asking the following questions:

• What are the project goals or objectives?
• What problems is the project solving?
• What are the expected deliverables?
• What are the key steps the milestones in your project?
• What should the delivery approach look like?

Finding the answers to these queries will enable you to create a proper scope statement that includes your objectives and deliverables.

Step 2: Break Down Milestones into Tasks

Once the scope baseline has been established, you may turn the scope statement into an organizational breakdown structure to help identify all the tasks required to produce the deliverables and divide the larger deliverables into smaller ones.

Divide your milestones into consumable tasks to ensure that everyone on your team understands what they are developing and how to accomplish them. Here's how to go about it:

• List all the tasks that must be completed for the project to succeed.
• List every resource that will be required to complete the work.
• Divide up big deliverables into smaller ones so that everyone on the team can see how to get there.
• All work should be divided into tasks and those tasks into subtasks.

Step 3: Plan the Total Cost of the Project

Once you know the required work, resources, and timeline, the next step is to figure out its cost. 

You can begin creating the schedule and cost baselines together after all of the tasks and activities have been specified in the scope baseline considering that they are interrelated and have an impact on one another.

You must do this by identifying the resources needed for each task and estimating how long it will take to complete each task. Ensure to involve critical elements such as hourly rates, available resources, and assets. Also, remember to add a safety factor for emergency resources in case of sudden challenges and delays. You can quickly construct the project's schedule baseline using the task list you made and the estimates you made.

Step 4: Examine and Update the Baseline

The need to assess and update your project baseline at regular periods is one of the most important things to keep in mind when creating one. This is due to the fact that changes in schedule, costs, and other factors will inevitably occur during the course of your project's execution and will inevitably affect how well it performs.

Therefore, be careful to revisit, examine, and amend your project baseline with the most recent information once you have finished creating it.

Step 5: Work Toward Stakeholder Buy-In

If you want to avoid working on unnecessary changes, you must get a detailed project baseline and plans approved by the stakeholders. You should organize a meeting to discuss your plan, address any questions your stakeholder may have, and make changes in real time. Also, include the following:

• Alert concerned people about the changes. 
• Figure out what changes should be reflected.
• Analyze if these changes are done in compliance with the existing budget. If not, convey the same to the stakeholders to avoid running out of resources and surpassing the deadline. 

The end goal should be to identify roadmaps in your plan, as well as any flaws, and address them before the project begins. Then begin the project work when the stakeholders approve the final project baseline. 

Conclusion

If you're in charge of a large project, your plan is only complete if you have a baseline. Your project baseline will help you plan future projects, giving you an accurate estimate of resources needed and timeframes so you can avoid making the same errors. Overall, project baselines are crucial to keeping your project on track, the team motivated, and clients happy.