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What a proper baseline can do for a project?

 

Providing the ‘golden thread’ between benefits, requirements, scope, time and cost.

 
November 6, 2023
 

What a proper baseline can do for a project?
 

A baseline sets the ambition for a project – what is the project aiming to achieve, within what timeframe and within what budget? It is, without doubt, the key management tool for any project. Despite this, teams are rarely given enough time or resources to develop a robust project baseline. However, when they are, we have seen that the clarity, focus and alignment it fosters across a project’s organisation is invaluable – and fundamental to the project’s success.

Why a project baseline is needed

A baseline helps align the entire project team around a common plan, and it provides a reference point from which to evaluate:

  • Delivery performance – are we on track to deliver our commitments?
  • Change – how does a change of scope, time or cost affect what we committed to deliver?
  • Outcomes – did we deliver what we said we would?

When to set a project baseline

 Baselines should be set ahead of major decision points such as feasibility approval and major contract awards so that there is a documented, coherent definition of the expected project outcomes, scope, schedule and cost on which those decisions were made. It is vital that enough time and resources are dedicated to producing it, given it will become the yardstick for the project.

What makes a good project baseline

 A project baseline should: 

  • Define expected outcomes or benefits, as well as scope, timeframes, and cost, to keep them within sight and under change control.
  • Provide the ‘golden thread’ between benefits, requirements, scope, time and cost to support rigorous change management. The key challenge here is to cover scope comprehensively and break it down in a way that reflects how the project will be contracted, delivered and commissioned. 
  • Allow for risk and uncertainty, with allowances assigned transparently to discrete scope elements and events to ensure changes to risk exposure can be understood as the project progresses.

A baseline is only valuable when all stakeholders trust it and buy into it (whether or not they are happy with what it tells them). This requires three things:

  • A mandate from the top making sure the baseline development is seen by all as a priority task and overseen and signed-off by senior leadership.
  • A rigorous development process drawing on all the latest data, knowledge and expertise from across the organisation.
  • Continuous, independent assurance to challenge the project team to uphold the highest standards in producing the baseline and to highlight key areas of uncertainty.

When to update the baseline

Firstly (as mentioned earlier), the baseline should be updated at major decision points through the project development process to reflect the latest understanding of the project and the level of certainty in the scope, time and cost.

Other than this, when to update a baseline can often be a contentious issue because of different perspectives; a project sponsor and a project director may have differing views, for example.

However, it makes sense for a baseline to be updated in the following circumstances:

  • When external influences on the project – those outside of the accountable party’s control – result in changes to the project requirements, scope, timeline or cost, making it unfair to measure performance against the original baseline.
  • When project requirements or scope have changed so significantly that the original baseline is no longer useful as a measurement reference.

When done properly, developing the baseline forms an integral part of all other project development activities such as design, planning ands estimation and takes just as long. Investing time and effort in developing a coherent, detailed and realistic baseline at the start of a project pays back multiple times over and is one of the most clear-cut investment decisions leadership can make. 

Mathew Hazenberg, Director, Accuracy, an international firm connecting strategic thinking with the analysis of facts and figures.

Built Environment's ‘Expert Talk’ series carries knowledge pieces every week by industry professionals who give their take on the key trends, observations, issues, and challenges in the built industry. The opinions in these articles are the author's own and do not reflect that of the publication. This is a standard disclaimer.

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