How to Create a Performance Measurement Baseline for Your Projects

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Projects are planned and then life happens. Ideally, project managers know better than to execute their project plans without a performance measurement baseline. They need to know immediately if their team is on track or falling behind.

Without that knowledge, the project is running blindly, and anyone who’s tried this knows the dangers. A performance measurement baseline provides a window into the project that allows project managers to see roadblocks and resolve them before the project hits a dead end.

What Is a Performance Measurement Baseline?

The performance measurement baseline (often abbreviated as PMB) is part of the project plan that sets the scope, budget and schedule. The performance measurement baseline captures these parts of the project plan to measure them against the actual progress of the project.

This is one tool project managers use to see where they are versus where they planned to be. If that doesn’t align, the project manager can reallocate resources to get the project back on track. A performance measurement baseline is also a great tool for updating clients, stakeholders and executives.

The whole project is part of a performance measurement baseline, but it’s broken up by project scope, project schedule and project cost baselines. The scope baseline is created by combing the scope statement and the defined work on the work breakdown structure (WBS). The schedule baseline is made up of project activities and the cost baseline is the budget allocated to those activities.

Performance measurement baseline can mean all of these baselines or each individually. However, the performance measurement baseline is a tool for the project manager to guide the project, controlling its progress and performance and providing transparency for stakeholders and the use of project resources.

In order to get the most out of your performance measurement baseline, you need real-time data. ProjectManager is online project management software that captures live data for more insightful decision-making. It’s easy to set a baseline with a simple click on our Gantt chart, which allows you to track project variance as it happens. This means you can respond fast when costs, scope or time don’t match your project plan so your project stays on track. Get started with ProjectManager today for free.

Gantt chart in projectmanagerGantt chart in projectmanager
ProjectManager’s Gantt chart sets the performance measurement baseline and tracks it in real time. Learn more

What’s the Purpose of a Performance Measurement Baseline?

As explained above, a performance measurement baseline is a way to control your project scope, schedule and costs. The performance measurement baseline captures your project plan so when you execute it, you have something to compare against your actual progress.

The baseline then reflects where you should be at any point in the project while your actual performance shows how far you progressed. The gap between those two points exposes how far behind (or possibly ahead) of your project plan that you are. This can include milestones, percentage of work completed or budget consumed.

This valuable data allows the project manager to monitor and track the project. If the performance measurement baseline indicates the project is delayed, the project manager can find out why and reallocate resources to right the project. Naturally, the more accurate your data, the better the performance measurement baseline works. You want a tool that collects real-time data or you’re always going to be a step behind.

How to Create a Performance Measurement Baseline

The importance of a performance measurement baseline to track your project and keep stakeholders updated is clear, but we haven’t explored how to make one. The process should be part of every project manager’s planning phase as the project plan develops.

It begins in planning but specifically focuses on the project scope, schedule and cost. Capturing these three distinct aspects of the project when they’re finalized in the project plan is the performance measurement baseline, acting as the project’s north star ensuring that you’re always on track.

To build a performance measurement baseline, follow these five steps.

1. Create a Scope Baseline

The scope of the project is the work that must be completed in order to receive the final deliverable. To determine those activities, you’ll first need to develop a scope statement, which collects all the work that must be done; a work breakdown structure (WBS), deliverable-oriented hierarchical deconstruction of the project from the top down; and a WBS dictionary, which details the tasks, activities and deliverables of the WBS.

Related: Free Project Scope Template for Word

The creation of these three documents is essential to understanding the project. Once they’ve been approved by the project stakeholders, then you have a scope baseline. It outlines the work that must be done and allows you to see if the work is being done through the execution phase in a timely manner.

2. Create a Schedule Baseline

The scope baseline will inform your costs as it outlines all activities necessary to deliver a successful project. But you also need to link any dependencies that might impact the sequence of activities. A schedule network diagram is a common tool for this work.

More than listing the activities, tasks and deliverables, you need to estimate the duration for each. It’s important to know how long it takes for an activity to be executed to completion and the resources required to do this. That information is incorporated into your schedule assumptions and constraints. Scheduling those resources is key to a smooth-running project.

When you have a schedule with task dependencies, duration and needed resources that’s been approved by stakeholders, you now have a project schedule baseline.

3. Create a Cost Baseline

At this point, we have the scope and the schedule but have yet to determine the financial investment that makes the work possible. Costs are forecast by looking at the resource requirements that you’ve compiled in the last step. These include your team, materials, equipment, software and anything else used in the execution of your project.

Like others mentioned above, the project budget has to be approved by stakeholders. That’s your cost baseline and it’s set up across project phases. Similar to other baselines, these numbers can change. If one changes, the other two need to adjust to make sure the project meets expectations.

4. Define Performance Indicators

You have the scope, schedule and cost baselines, but now you need to define the performance indicators related to those baselines. These indicators can refer to the earned value analysis (EVA) or other indicators that make sense for the project. But all are measured against the planned scope, schedule and budget.

5. Consolidate a Performance Measurement Baseline

While you can use the scope, schedule and cost baselines individually, many projects use a combination of the three to get a fuller picture of the project’s performance during the execution phase.

Whichever you choose, you’ll need a tool that collects the actual performance of the project’s scope, schedule and cost against the planned scope, schedule and cost. This is called the project variance and shows where you are in relation to where you should be.

Comparing your performance measurement baseline to the actual performance indicates whether you’re on target. If you’re not meeting baselines, the project manager must reallocate resources to get back on track.

However, the baseline can change if the scope, timeline or budget is adjusted. Approved changes are then reflected in the three baselines. This influences the combined performance measurement baseline.

ProjectManager Is Ideal for Performance Measurement

ProjectManager is project management software that creates a performance measurement baseline with just one click. Once you add the project plan data to your Gantt chart, simply set the baseline so you can always see the percentage of work completed, the actual costs you’ve spent and much more.

Get a High-Level View With Real-Time Dashboards

The data saved to your baseline automatically feeds throughout the software. You can see a percentage of tasks completed on any of the multiple project views. But the real-time dashboard goes even further. It requires no setup and does all the work for you. All you have to do is look at the graphs and charts it generates to monitor time, cost, workload, health, tasks and progress. There’s even a portfolio dashboard if you’re managing more than one project.

dashboard showing project metrics in real-timedashboard showing project metrics in real-time
Go Deeper Into Data With Customizable Reports

Stakeholders have expectations and project managers have to report to them with regular updates. In one click, you have reports that go deeper into the data than the high-level view of the real-time dashboard. Reports can be generated on project or portfolio status, project plan, tasks, timesheets, availability, workload and variance. The latter will use your performance measurement baseline to tell you where you are and where you should be. All reports can be customized to focus only on details for project managers or more general outlooks for stakeholders.

ProjectManager's status report filterProjectManager's status report filter

If you discovered that you’re falling behind, our tool has resource management features that can help you view your team’s workload and balance it to keep them productive. Any changes you make to your project plan can be done by simply dragging and dropping start dates or deadlines to their new place. The tool updates automatically to reflect these changes and teams are notified by email and in-app alerts. It’s this real-time collaboration that keeps your teams working better together.

ProjectManager is award-winning project management software that helps you plan, monitor and report on projects in real time. Set a baseline after you create your project plan and see in real time where you actually are in relation to your planned effort. Join teams from NASA, Siemens and Nestle who use our tools to drive success. Get started with ProjectManager today for free.

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