Thursday, September 15, 2011

Managing Project Baseline Changes

The company I work for is made up of many functional groups located around the world. The information technology group is responsible for providing a reliable and robust computer environment through which the company can run its global operations. The information technology group recently initiated a project to upgrade its software distribution system to a more current version. The current system is outdated and no longer supported by the manufacturer. The upgrade would allow them to regain technical support as well as leverage information within a recently deployed Active Directory, allowing for increased automation during software deployments.

Upon approval of the initial project charter, the project team developed a detailed project scope statement, work breakdown structure, project schedule, and time-phased cost estimates (project budget). The documents were combined into a project management plan, presented to the project sponsors, approved, and saved as a project baseline. The project baseline is “the approved project management plan plus approved changes” (Schwalbe, 2006, p. Glossary-1).. Now that the project team had an approved project plan, they could move forward with executing the project tasks. However, during project execution, reality does not always align nicely with the project plan, and project managers must make changes to the plan in order to achieve project success. “Every project is constrained in different ways by its scope, time [schedule], and cost goals” (Schwalbe, 2006, p. 7). In order to effectively manage projects, project managers must understand how changes to the triple constraints impact the project and implement strategies to manage baseline changes.

Scope Baseline

The scope baseline is “the approved detailed project scope statement and its associated WBS” (PMBOK, 2004). The detailed project scope statement describes “the project’s deliverables and the work required to create those deliverables” (PMBOK, 2004, chap. Using the scope statement, the project team creates a list of the deliverables they will need to produce in order to achieve the project objectives. The deliverables are broken down into sub-deliverables, and eventually into work packages that the team will execute. Without a scope statement, a project team can not determine the work that is to be done.

At a high-level, included in the software distribution upgrade project scope is the training, design, testing, and deployment of upgrades to all existing system servers and client software in the United States. The scope also includes deployment to existing servers at international locations. However, until a detailed technical analysis of the international location servers is conducted, the project team will not know if the servers are sufficient to host the system deployment software.

Changes to the project scope, like the need to upgrade or replace servers, could impact the project baseline. If servers are identified for upgrade or replacement, the project team will need to add additional tasks to the work breakdown structure. The addition of tasks could affect the project schedule by pushing out the completion date. The cost of adding new servers might increase the funding needed for project completion, impacting the cost baseline.

Schedule Baseline

A project schedule is created by sequencing the tasks within a work breakdown structure to identify the logical relationships between tasks. Once the relationships are defined, resources are assigned and durations are determined for each task to create a schedule network analysis. A schedule baseline is a “specific version of the project schedule developed from the schedule network analysis. It is accepted and approved by the project management team as the schedule baseline with baseline start dates and baseline finish dates” (Schwalbe, 2006, p. 231).

Changes to the project schedule can impact the project baseline. When developing the project schedule for the software distribution system upgrade project, the team made estimates of resources and task durations based on their current knowledge. Any tasks that take longer than expected could affect the length of the project, especially if the tasks are on the critical path of the project. “Variances on the critical path have the potential for negatively impacting the project completion date” (Cleland & Ireland, 2004, p. 328). In some projects, the completion date is not a concern. However, in a project where the completion date is fixed, project managers will need to take actions to ensure the project completes by the agreed target date. To accomplish this, additional resources may need to be added to tasks in order to reduce task duration; additional resources can result in increased cost, which will impact the cost baseline. If cost for a project is fixed, the team might need to request a reduction in the number of deliverables for the project, affecting the scope baseline.

Cost Baseline

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.” (PMBOK, 2004, chap.  Many factors can affect the cost performance of a project. During the planning phase, the project team will create cost estimates for each task. However, the true costs of certain tasks may not be known. In addition, depending on the timeframe for task execution, changes to costs could occur, resulting in a variance from the original estimates. For example, during the planning for the software distribution system upgrade project, the team planned to send four people to a week-long training event. The team included travel expenses in the estimate using current flight, hotel, and car rental information. However, based on the project schedule, the training is not scheduled to occur for three months. Increases in flight or hotel costs could directly impact the overall cost of the project.

If cost is fixed for the project, the team will need to determine how to reduce costs in other areas of the project. One way is to remove other cost-related tasks; however, this approach could affect the project deliverables, thereby requiring a change in the scope baseline. Another approach could be to use less expensive resources to complete some of the tasks. However, resources are usually less expensive because they have less experience or skill. As a result, tasks might take longer than originally planned, affecting the schedule baseline.

Managing Baseline Changes

In order to ensure changes to the project scope, schedule, and cost baselines are properly considered, project teams should use a formal change control process. A change control process involves “identifying, evaluating, and managing changes throughout the project life cycle” (Schwalbe, 2006, p. 151). Unmanaged changes can quickly cause a project to spiral out of control. The information technology group at my company uses a formal process for submitting and obtaining approval for changes to project scope. The change request must include a description of the change, the reason for the change, and the impact on project schedule and cost baselines. The change request is reviewed by the project sponsors and key stakeholders. Once approved, the project schedule and costs are updated and a new project baseline is established. However, the changes to project schedule or costs at my company do not always follow the same structured process.

As part of weekly project update reports, project managers at my company include a brief summary of the variance for project schedule and cost. Included in the summary is an action plan to return the variance to the project baseline. If the project manager determine that a return to baseline is unlikely, an update on projected schedule and costs is included. As long as project schedule is not constrained by a locked-in completion date, schedule is allowed to slide. Likewise, as long as costs do not exceed 10% of the approved cost baseline, project managers to not need to seek additional approvals.

Quality—The Fourth Constraint

As discussed, scope, schedule, and cost are the basic elements that interact to form the project baseline. However, a forth element, quality, is also a key element in projects. “Some people refer to the quadruple constraint of project management, including quality along with scope, schedule, and cost” (Schwalbe, 2006, p. 8). Quality in projects can be simply defined as “meeting customer’s requirements” (Cleland & Ireland, 2004, p. 293). While evaluating decisions to change scope, schedule and cost, project managers must be careful to consider the impacts to the quality of project deliverables. By carefully balancing these elements and implementing strategies to manage baseline changes, project managers will improve their changes of meeting customer needs, on time and within budget.


Cleland, D., & Ireland, L. (2004). Project Manager's Portable Handbook (2nd ed.). New York: McGraw-Hill.

Gray, C., & Larson, E. (2006). Project Management, The Managerial Process (3rd ed.). New York: McGraw-Hill Irwin.

PMBOK, A Guide To The Project Management Body of Knowledge: (3rd ed.). (2004). Newtown Square, PE: Project Management Institute, Inc.

Schwalbe, K. (2006). Information Technology Project Management (4th ed.). Boston: Thomson.

1 comment:

  1. Great post! Right to the point.
    I don't know why usually quality is taken as less important than scope, schedule and cost...guess it depends on each company...For me, it's as important as the other three

    Keep on bloggin, I just discovered your blog and I think it's great.


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