To put it simply, the definition of a baseline is basically the approved plan for the execution of the project, with any added or subtracted confirmed changes. These so called change orders will then become a part of the baseline and create a update it with the new changes integrated. This is not to be mistaken with forecast, which in turn is an updated plan that will not affect the baseline.
A forecast may just be a reallocation of the project’s resources with the same expected result, whereas a baseline will fundamentally change the end result. The baseline is the starting point from where a project performance gets measured making it the reference point to actual outcomes. We all know delays in a project are second to inevitable, but having a baseline in check will make your project far more reliable, stable and predictable as you’re aware of the original plan in comparison to the current status. And you want to execute a project that is as stable as a brick house, and not a house of cards, right?
As familiar, a plan has several dimensions to it, and in a project there are three main areas of focus in the baseline: cost, schedule and scope. Estabild mainly works with the cost and schedule baseline, and thus we’ll delve a bit deeper into these two.
You might wonder though, isn’t the baseline (i.e. the approved plan) and schedule the same thing? Though they are very much alike, there are significant differences between them. You could see it as the baseline being a static copy of the initial schedule, whereas the schedule is actively being updated as the project is being executed. This is where you get to make the reference points back to the baseline to see how the project is performing. Two important features for measuring the schedule against the baseline is critical path and float. Activities with critical path are ones that cannot be delayed without in turn delaying the project final deadline. Float on the other hand, is when activities can be completed behind schedule without causing delays to the project final completion deadline.
Milestones in a project baseline is as it sounds, a crucial event that is taking place in the project. They might be closely interconnected with a critical path activity, as major activities often are determining the continued workflow and progress. For example, a city inspection needs to take place before the final project commissioning can take place.
If the term ”schedule” is the target for the schedule baseline, the equivalent for the cost baseline is ”planned approved costs”. Again, just like in the schedule baseline, the cost baseline is the static (”frozen”) parameter to which the actual costs are being measured against.
The cost and schedule go hand in hand, and the common nominator for these two is scope. In theory, both the cost and schedule (and scope) baselines are created simultaneously. This is because they are interrelated and the cost baseline is made upon the estimation of each activity in the project, which is outlined in the schedule. This estimation is done at the highest precision possible, since when all is put together the initial estimated budget is created.
A baseline is not only important for the project team itself, but also for all the stakeholders and project sponsors who want to know how the project is performing. Is the project according to plan or not?
A baseline should be detailed enough to have a good overview of the complete project from start to finish, but because of the complex nature of a project it simply cannot be too detailed or it will only become confusing, misleading and difficult to keep up with. Therefore, our suggestion is to keep the baseline at a Level 1 - Level 2 spectrum, where most of the major activities are stated. Anything higher up in the complexity range will most likely become irrelevant to external stakeholders as it becomes more and more operational.
Hopefully this post has given you a bit of insight on how a baseline is properly established and how Estabild helps you create one without the hassle. As always, feel free to get in touch if you want to learn more!