Baselining projects critical for success

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THE appointment for the air-conditioning maintenance man was for 9am last Saturday morning so when he still had not arrived at 10.30am, I called him up and asked where he was. “Sorry ah! Will be a bit late ah! 2pm ah!” was the response. He turned up at 3pm some six hours late.Then on Sunday I had to fly to Miri and while sitting in the departure hall came the announcement that we all dread to hear, the plane had been delayed leaving KL and would be 30 minutes late.

So, what has all this got to do with project management? Well, its all about setting baselines for the deliverables of services in both cases. If I had initially asked the ‘aircon’ man to come without setting a time then technically he could not have been late turning up at 3pm. If the airline had not set a departure time then it would not have been delayed. However, appointments and departure times where established resulting in notable delays to those baselines.

When a contractor embarks upon a project it is usual for the client to set contractual milestones that must be met or else the contractor will be penalised. When linked to the activities of work these contractual milestones form an immovable ‘peg in the ground’ that will generate a logical path to achieve the deliverables by the required date. Upon agreement by both parties a baseline is set against which progress is measured to determine if the deliverables are being met.

If baselines are not established then the project has no means to measure its performance against, resulting in no early warning indicators that the project may be slipping into the ‘sick’ category. Similarly, the contract will define what the contractor is required to deliver and these requirements should be strictly controlled to ensure both parties do not diverge from their commitments without justifiable compensation.

Baselines can take on a number of forms depending on what critical success factors where defined at the beginning of the project but the three most common ones are cost, schedule and scope.

Cost Baselines are time-phased budgets that will monitor and measure cost performance throughout the project life cycle. They form a forecast indicator as to the possibility of the project running over budget at any given point in time thus allowing for remedial action such as re-financing to be implemented.

Schedule baselines form the most common type of baselines that will highlight if the project will complete on time and are critical to the success of the project not only from a contractual point of view but also from the contractors financial perspective as any slippage from the contractual completion date will result in a depletion of profits through the overuse of indirect resources. When the project schedule is baselined each activity can be measured for slippage and highlight the necessity for a recovery plan to be implemented.

Scope baselines form the most critical baseline that defines the complete scope of the project as understood by both parties at the beginning of the project. Any changes within the scope baseline will require the other two baselines to be re-visited also as additional work will require it to be costed and schedule in with the original scope.

Because the baseline serves as the primary metric for evaluating performance as the project progresses, the stability of the baselines are crucial. Therefore, after establishing the baselines they must be put under some form of version control to ensure all changes are legitimately approved and entered.

Once the project has been baselined within these three dimensions, it is available to be measured, monitored and controlled.

We constantly use baselines in our daily lives to compare what we need or what is required to be done, against pre-defined benchmarks. Consider the following common baselines: Greenwich Mean Time (GMT) displayed in a clock or watch indicating how much time is left to complete a task or to meet an appointment; a rule or tape measure used to compare the length of an object or a distance required; and even the fuel gauge in your car that measures the actual fuel used against what is remaining.

Imagine how difficult life would be without these items that we all take so much for granted.

Baselines provide the benchmark against which we measure progress and without formal baselines projects cannot be monitored or controlled and will ultimately end up as a statistic in the archives of ‘failed’ projects.

Phil Palmer holds a MSc in project management and is managing director of PCSS Consultancy Sdn Bhd. You are welcome to post your comments about this article at http://projman-meth.blogspot.com/ or visit the PCSS website at http://projmanmeth.blogspot.com/www.pcss.com.myhttp://projmanmeth.blogspot.com/