Re-baselining of IT projects – Factors that makes it difficult and some recommendations

Before addressing the question, it would be beneficial if we understand what baselining and re-baselining is. Baselining is the common project management method where we lay down the cost and effort estimates and schedules based on assumptions that we have at hand. Once baseline is created, project plan is laid out based on this baseline. But as projects go ahead, due changes in assumptions, project requirements, due to poor project oversight and other changes, the original cost / effort estimates and schedule does not fall good and calls for modification of the same based on new assumptions. If projects are not re-baselined at this stage, they fail drastically and / or lead to huge cost overrun.

Federal IT projects are not different. The situation is more obvious due to outdated (quickly changing) technology, complex systems, processes & systems, poor project estimation/planning/control mechanisms and lack of expertise to push and pull clean project management practices that leads to weak risk / change management and over and above all – politics. These situations that lead to re-baselining further determine the factors that in turn make it difficult to re-baseline federal IT projects, which include –

1. Need for re-estimation and arriving at revised cost estimation based on detailed work breakdown structureThis is one of the major factors that make re-baselining difficult task and time consuming to get on track especially when agency is dealing with multi-billion projects which are too complex to start with. Greatest concern is to make all assumptions clear and realistic so that re-baselining is avoided in future. Immediate remedial action would be to spend considerable time to figure out what the actual need is and clearly define what individual components of work / task need to be executed to achieve the task. Expert advice should be sought for each major task to determine closest cost, effort and time.

2. Need for re-work on EVM formulas and calculation to adjust new cost and valueEarned Value Management (EVM) is the most widely used and federal standard to measure performance of an IT investment. Re-baselining causes the project team / agency to rebuild EVM formulas based on new cost, effort and value and this involves considerable cost, effort and risk management to ensure that the expected ROI is attained within reasonable time period for changed scenario. Once we arrive at clear work break down structure and have a clear idea of how work / task need to be executed and integrated to achieve the clear goal, EVM analysis and establishment should not be a problem.

3. Lack of credibility on the part of agency to have this oversight and take the responsibility to fix issues and propose the business case for re-baseliningThis issue would keep the agencies from announcing the fact that they have actually overrun the budget and are in grave need to rebaseline. The memorandum from CIO and OMB director urges agencies to announce for help and declare that they need to re-baseline based on an investment’s poor performance. OMB need to ensure that it provides appropriate support for the agencies and that it gives them a chance to correct any issues that would have lead to re-baseline. OMB need to clearly define the expectations that it needs to have in a re-baseline plan and to monitor its progress.


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