Project Management Terms – Baseline

A baseline is a reference that is being used as a base for future measurement. In Project Management, the term baseline refers to an accepted and approved project plan. A project baseline is a must for a project manager to monitor and evaluate the success of a project. Without it there is no possibility to compare the current status of the project with the initial estimated one.

Once the project plan gets approved the manager should save it as a baseline plan. For a project there can be saved multiple baselines depending on the project size and how often the project plan changes. Ideally, once the project baseline is created it should not be changed anymore. However, it is sometimes inevitable to adjust it due to a new requirement that implies a major change to scope or cost. Also in rare cases the project was not well scheduled in the initial phase. In these cases the best solution is to keep the initial baseline and to save the adjusted schedule as a new baseline. This way there will be several interim baselines that can be used to remember the potentially bad project management or the team members that did not deliver as promised.

Types of project baselines

Since a project baseline includes many data from a project it is difficult to manage it as a whole and usually it is broken into several parts. This makes the complexity of baseline management easier to deal with. Project baselines generally include:

  • Scope baseline – the technical, physical and functional requirements for deliverable products
  • Schedule baseline – the project schedule and all of the elements supporting the schedule
  • Cost/Budget baseline – an approved budget usually in a time distribution format used to estimate, monitor, and control overall cost performance on the project
  • Quality/Risk baseline – the set of known possible changes (uncertainties) that could impact the performance of the project (more…)
By |2022-11-18T10:20:10+00:00October 26th, 2012|Project Management Glossary|Comments Off on Project Management Terms – Baseline

Creating Budget Or Cost Baseline For Projects

Cost Baseline in RationalPlan Project Management SoftwareIn Project Management, the term project baseline refers to an accepted and approved project plan. Besides the schedule baseline, the cost/budget baseline is the most important part of  a project baseline. The cost baseline handles the amount of money the project is predicted to cost and on the other side when that money will be spent. It is an approved budget usually in a time distribution format used to estimate, monitor, and control the overall cost performance of the project.

In some cases there can be several intermediary baselines. This happens when either the project was not well planned or when significant changes appear to the scope of the project. However the initial baseline is usually what gets budgeted in the company’s financials. All types of baselines are closely related and changes to one of them will result in changes to the others. If a change is made in the project scope baseline, the schedule baseline gets adjusted. Hence the cost baseline will probably have to be changed as well.

How is cost baseline created

When it comes to computing the total cost of the project some estimates need to be done. Once the project schedule is ready and approved, a bottom-up procedure should be used. For each activity of the project it is estimated a detailed cost. This way a total cost for each major phase and for the entire project gets computed. These initial costs of all of the planned activities will become the initial estimated budget.

Cost Analysis

According to PMBOK the cost baseline is a “time-phased budget that is used as a basis against which to measure, monitor, and control overall cost performance on the project”. But many factors can affect the cost performance of a project. The above estimated costs established during the planning phase might not be estimated that well. The true costs of certain tasks may not be well known at planning time. If a given price for materials, trainings or travel costs was taken into consideration at planning phase but at execution time these are increased there is an unforeseen additional cost. (more…)

By |2022-11-18T10:20:10+00:00October 10th, 2012|Project Management|Comments Off on Creating Budget Or Cost Baseline For Projects
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