Measure performance with project baselines

Caeleigh MacNeil contributor headshotCaeleigh MacNeilJuly 5th, 20228 min read
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Summary

Project baselines are predefined targets for your project schedule, cost, and scope. When you include baselines in your project plan, you can use them as a point of reference to monitor your project’s performance over time. In this article, learn how to set baselines and use them to keep your projects on track.

Picture this: You’re at an archery range with a bow in your hand, aiming at a huge blank wall. You let loose, and your arrow soars straight into the wall in front of you. You start a victory shimmy, then stop—you think you shot straight ahead of you, but you aren't quite sure since every part of the wall looks the same. 

You decide to aim at a target instead. You pull back and let the arrow fly, and it lands with a thunk on the bullseye. This time, you know your shot was a success. 

Establishing a target does more than make you feel like Robin Hood (albeit without the tights). Having a target to aim for gives you a reference point to measure your skills—just like how project baselines give you a benchmark to measure a project’s performance.

What are project baselines?  

Project baselines are predefined targets for your project schedule, cost, and scope. You determine baselines as part of your project plan. Then as your project progresses, you use those baselines as a point of reference to monitor your project’s performance over time.

There are three types of project baselines: 

  • A scope baseline clearly defines your project scope. It includes a list of objectives and project deliverables you’ll focus on for your project.  

  • A schedule baseline dictates how long your project should take. Your schedule baseline is your project timeline, and should include clearly defined due dates for each deliverable, plus a final deadline for your project. 

  • A cost baseline is your estimated project budget. Your cost baseline should break down the resources required for each deliverable, then sum them together to illustrate your estimated total project cost.

Your project plan should include all three of these baselines. During your project, you can monitor actual performance against each baseline to ensure your scope, schedule, and budget stay on target. 

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Why are project baselines important? 

Project baselines are an essential component of any successful project. Here’s how they can help you and your team: 

Monitor and adjust project performance

Baselines give you a standard for how your project should be performing. As work progresses, you can measure actual performance against the baselines you set during planning. That way, you can check if your project scope, schedule, or budget is on (or off) track—then course-correct before issues get too big.  

Together, the three baseline types (scope, schedule, and budget) make up your performance measurement baseline (PMB). When you compare actual performance against your projected baselines in all three areas, you can understand how your project is doing on a high level. 

It’s important to measure all three baselines side-by-side in order to visualize how a change in one component affects the others—like how an increased scope impacts schedule and cost. This helps you figure out how you should adjust when you need to change your planned scope, schedule, or budget. And if the difference between actual performance and your baselines gets too big, you can decide whether to re-baseline and change your project goals to make them more attainable. 

For example, imagine you’re working on a blog series and you’ve just increased the scope from 10 articles to 11 articles. As a result, your project will cost more money and take more time to complete, causing your budget and schedule to veer off baseline. If you haven’t allocated any buffer time or extra budget into your project plan, you may have to adjust your project goals.  

Read: What is the project management triangle and how can it help your team?

Manage stakeholder expectations

When you set baselines and communicate them to stakeholders, everyone knows what you’re doing by when—plus how much it will all cost. Here’s how that helps: 

  • Your scope baseline tells stakeholders exactly what you’re planning to achieve. This helps your stakeholders understand what is and isn’t part of the project deliverable. For example, imagine your stakeholders requested a new landing page design with interactive components. But with your current budget limitations, you can build the landing page but not the additional interactive components. Setting a scope baseline lets them know that limitation in advance so everyone is on the same page.

  • Your schedule baseline clarifies when you will complete each deliverable. This helps stakeholders understand how long each deliverable will take to complete, so they know when to expect a final product. And if stakeholders want to increase your project scope with additional requests, you can clearly demonstrate how that will impact your project schedule and budget. 

  • Your cost baseline establishes the resources required for each deliverable. If stakeholders want to add additional requests, your budget clearly demonstrates how you will need extra funds to make that happen. As a result, you can either push back on requests or make a good case for getting additional budget.

Together, these baselines help stakeholders understand how changes to your scope, timeline, or budget will impact your project’s success. They give you a tool to push back on additional requests and prevent scope creep, plus a way to communicate the impact that changes to the timeline and cost will have on the overall project goals. 

Improve future estimates

When your project is over, you can compare actual performance against your baselines to see how accurate your initial estimates were. This helps you identify areas where you can improve your baselining process—like factors you didn’t consider when calculating your project budget, deliverables that took longer than expected, or tasks that should have been out of scope. 

If you analyze actual performance versus baselines for every project, you can see which areas typically under- or over-perform. Then, you can use that knowledge to make better estimates for future projects. 

For example, imagine three out of five of your projects this quarter went over schedule by a week due to team members getting sick. Going forward, you could build extra buffer time into each project schedule to accommodate for any last-minute absences. 

Read: How to capture lessons learned in project management

How to set project baselines in 5 steps 

Setting project baselines is an important part of any solid project management plan. As you plan your next endeavor, follow these steps to create baselines and communicate them to your cross-functional partners.  

1. Determine scope

Set your project scope baseline first, since this determines both your schedule and budget. Your project scope sets boundaries for your project by defining exactly which deliverables you’ll be working towards. You can document your scope in the form of a project scope statement or statement of work. 

Read: Scope of Work vs. Statement of Work: What is the difference?

To create your scope baseline, list out all of the deliverables you want to achieve with your project. Then, break each deliverable into actionable tasks or sub-deliverables. For example, if one of your deliverables is to host a recruiting event, you could break that down into the following sub-deliverables: 

  • Reserve event space

  • Book catering company

  • Finalize guest speakers

  • Send reminder emails

You can also create a work breakdown structure to visually lay out all of your project’s deliverables and sub-deliverables. This tool breaks work down into multiple levels, starting with your main objective at the top and branching out into deliverables and sub-deliverables below. 

2. Map out your project schedule

Now that you’ve determined your project scope, it’s time to map out your project schedule and create your schedule baseline. To create your schedule baseline, define clear due dates for each deliverable and sub-deliverable, plus a final deadline for your entire project. Be sure to make each due date realistic and clarify dependencies between tasks. For example, you may need to finalize the guest speaker list for your recruiting event before you can send reminder emails. 

Some project management tools let you see dependencies within your project schedule, so you can plan and set end dates accordingly. For example, Asana’s timeline view lays out tasks and milestones within your project and visualizes dependencies, similar to a Gantt chart. You can also see which tasks have been completed and who they’ve been assigned to, so you can monitor and share your project schedule in real time. 

[Old Product UI] Product launch timeline in Asana, Gantt style view (Timeline)
Map project timelines with Asana

3. Create a project budget plan

Now that you’ve solidified your scope and schedule, you can create your project budget baseline. To create your budget, list out all of the resources required for each deliverable and sub-deliverable within your project. Then, estimate how much each resource will cost. 

Your final budget document should include line items for each deliverable, sub-deliverable, and required resource—plus the expected cost of each. You should also include the timeline for when you’ll need each resource and when you expect to spend funds. In addition, it’s also helpful to include the person responsible for each budget component and a total of expenditures for your entire project. 

In the example below, the estimated spend column represents the budget baseline for your project. Then as work progresses, you can track actual spend and compare it to your baseline. 

[Old Product UI] Project budget example (lists)

4. Outline a change control process

Just because you set baselines doesn’t mean your project is sunk if your scope, schedule, or budget gets off track. In fact, planning for change is an integral part of the project baselining process. 

After you finalize your three project baselines, create a change control process to outline how you’ll handle change requests from your team and stakeholders. A change control process is a way to stay flexible and let stakeholders request changes while your project is in progress.  This helps protect your project scope, schedule, and budget from ballooning out of control. In this context, change requests can include requests for additional deliverables, timeline updates, or budget adjustments. 

A change control process typically includes the following stages: 

  1. Initiation: A stakeholder submits a change request form to provide relevant information about why this change is important. This typically includes a description of the request, the request priority, and any important deadlines.

  2. Assessment: The project or department lead reviews the request details and determines the resources that would be required, the impact the request would have, and who the request should be passed on to. 

  3. Analysis: The appropriate project lead decides whether to approve or reject the request. During this stage, you consider the request in the context of your project baselines to determine how it will impact your scope, schedule, and budget. 

  4. Implementation: If the request is approved, you then work with stakeholders to implement the change. Be sure to record which changes were made and how they will impact your project baselines. If the change is significant, you may need to adjust your project goals and create new baselines.  

  5. Closure: Close the request and store any documentation, change logs, and communication in a shared space that stakeholders can easily access later on. 

The five steps of a change control process

Establishing a change control process ensures that each potential update is considered in the context of all three project baselines. For example, if you receive a request to add an additional deliverable to your project scope, you can then analyze how that addition will impact your schedule and budget. If it will push your project too far off baseline, you can reject the change and close out the change request. 

5. Incorporate feedback from project stakeholders

Last but not least, present your project baselines to key stakeholders in order to collect and incorporate their feedback. This step is important because it ensures you and your stakeholders are aligned on the scope, schedule, and budget targets for your project. For example, if tasks within your project are dependent on resources from the design team, sharing baselines helps the team understand why deadlines for delivering those resources are important. And if the design team can’t meet the proposed deadline, you can update your schedule baseline accordingly. 

This is also an opportunity to tweak and improve your baselines—especially since stakeholders may have more specialized knowledge about certain aspects of your project. For example, the finance team may be able to provide insight into how much deliverables might cost or when payments are due. 

Can you change a project baseline?

In short, yes. But you shouldn’t change your baselines too often—aim to only change them when it’s truly necessary. For example, you might need to re-baseline your project when a significant change occurs, like if a team member leaves and you need to reassign responsibilities. 

Re-baselining your project too often makes your baselines less meaningful. Remember that your baselines represent targets you’re aiming for, so your end results don’t have to match them exactly. It’s ok for a project to be off baseline for scope, schedule, or budget—as long as you can balance out the difference in other areas. For example, if you’ve increased your project scope but you can trim budget and time in other areas, you don’t necessarily have to re-baseline your project.

Read: What causes project failure? 7 common culprits and their solutions

Find your home base

Project baselines are an essential way to monitor your project’s performance over time. If you want to make your baselines easily accessible and visible to stakeholders, consider creating them with project management software. That way, your team and stakeholders can collaborate and comment directly on your baselines, plus see any changes in real time. 

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