Introducing the best project management metrics. Project management metrics play a vital role in the success of any project. Project managers define these parameters according to the organization’s guidelines at the beginning stage. These metrics are regularly tracked and verified to ensure project progress is on schedule. To track time, and cost, and guide the team toward goals, project management metrics will act as a beacon.
A knowledgeable project manager needs to understand and analyze different situations. He should be aware of the status of the project, its progress or backwardness, and thus avoid future bottlenecks and obstacles. In this article, we are going to consider the best project management metrics and find the right way to progress your project.
What are project management metrics?
Project management metrics are key performance indicators (KPIs) that help track project performance. To be a successful project manager, you must monitor the team’s progress and plan efforts to achieve project goals. Metrics also help take corrective action when numbers don’t match expectations.
Why are project management metrics needed?
Project managers need a specific system of project management metrics to evaluate each project feature and prepare an action plan accordingly. Many successful organizations have established clear guidelines for developing these metrics. The size and complexity of the project, technology, scope, scope of work, and other factors can affect this decision. Integrating these metrics into the system is essential to evaluate and maintain the project lifecycle.
Benefits of using project management metrics
In short, a project management metric allows you to:
Go ahead with peace of mind to analyze the overall health of the project.
It will help you determine the critical factors that need attention.
They are useful for assessing the current situation and making informed decisions.
They will help you to evolve, adapt and predict better in times of uncertainty.
Metrics act as an alerting system and are therefore the backbone of any project.
How do engineer project metrics?
It is important to understand that not to forget, each project is a unique life and the way of evaluating the performance of organizations will be very different. Therefore, project managers need to engineer project metrics that fit their organizational needs and align with their strategic goals.
But in general:
The first step towards project metrics engineering involves setting appropriate goals to achieve desired performance levels. The main idea here is to formulate your goals and keep the end goal in mind. Let’s start with the first step to setting the right goals.
SMART goals
Many project managers follow the SMART framework. This method is one of the best methods to ensure the achievement of goals. SMART stands for the following words:
- Specific: meaning to be specific. The goal should be specific to your project and meet your needs. You need to know how this goal will be achieved, by whom and in what process to carry out the tasks will be planned.
- Measurable: be measurable. Basically, the progress of the project should be small. Therefore, set parameters to calculate the development of your project from the very beginning.
- Achievable: To be achievable and not in an aura of ambiguity. Setting unrealistic goals is just as bad as having no goals at all. To make it possible, break larger goals into smaller tasks and set realistic deadlines.
- Relevant: The goal should be related to your work. The purpose of this project should be in line with the overall mission of your organization. Therefore, the purpose of the project should be aligned with other business goals aligned with your current and long-term plans.
- Time-bond: Time schedule is one of the most important indicators of the success of a project. Therefore, it is very important to create a timetable to determine the deadline or the last date to reach the assigned task.
When these factors are properly implemented, real-time performance can be measured. Let’s go one step further and create SMARTER goals to increase organizational efficiency.
How to set more precise goals
To stay resilient and flexible in today’s volatile market, you may have to go beyond the usual SMART goals. More detailed goals include aspects of evolution and a review of the overall trend to ensure continuous evaluation and improvement.
This problem answers two main questions:
- EVOLVE: Are you evolving based on your project needs?
- Reviewing: Are you reviewing the deficiencies on time and fixing them?
Breaking down your goals and categorizing them will help you determine specific and measurable metrics. Additionally, it enables you to control project features more effectively. Based on more specific objectives, KPIs are further divided into five main categories. Here is a detailed description of each of them.
5 basic factors
1. Stick to the schedule.
When it comes to projects, time and cost are factors that will be directly and proportionally considered. Improper use of time increases project costs and ultimately leads to losing our initial planning. Therefore, time-based metrics are critical to delivering projects on or ahead of schedule and in budgeting.
Use the following KPIs to continue working on the project:
Cycle time:
Cycle time is the actual time required to complete a task on a project. It is best used to track recurring functions within a project. Measuring cycle time increases the accuracy of your future forecasts and helps you draw an accurate project schedule.
Use of payable sources:
It is a method of measuring the time spent by resources to perform certain tasks, against their availability or capacity. The utilization level reflects the overall productivity of the labor force. Using resources, you can track whether your colleagues are sticking to the timeline assigned for each task in the project or not.
Completion on time:
This means meeting the deadline and serving as a performance indicator for both the client and the project manager. Respecting and adhering to the completion date is seen very seriously in project management.
Prediction vs Real Time:
This topic considers the difference in the planned time for the activity compared to the actual time. If resources are over budgeted, managers can take corrective actions to keep the project moving forward.
The next important metric is project cost. Let us see the various KPIs related to it:
2. Stay within the specified budget.
Project budgeting determines a financial plan based on resource needs and other factors. This takes into account the total projected cost required to complete a project. To maximize revenue, expenses must stay within budget.
Monitoring budgeting techniques and setting up alerts about budget traps in the project management dashboard can help prevent budget overruns. Dashboard scheduling enables you to better manage your team.
Project management metrics based on a budget are:
Budget variance:
This shows the difference between the projected cost and the actual budget. A forecast vs. an actual report can be useful for tracking budget variances. Managers can track this issue from time to time and check if there is overspending in the project budget.
Main items:
This problem represents a group of individual financial items that are divided into subcategories to track and sort project costs. The items in the budget work as a tool for comparison and budgeting in the future. If one item costs more than anticipated, managers can take corrective action to prevent a domino effect on overall revenue.
Cost Performance Index or CPI
Similar to cost forecast vs. actual cost, CPI analyzes the budgeted cost of work against the actual amount spent. This index helps you to calculate resource efficiency and overall budget and cost planning. Pivoting your project budget plan is best done after evaluating the financial details of the project.
3. Maintain quality delivery.
A project manager’s primary responsibility is to maintain the quality of product delivery. Also, it is important to understand and meet the customer’s expectations from the very beginning. As a project manager, you must evaluate and guide the team’s performance toward the desired project goals.
Some of the KPIs in this field are:
Customer retention/loyalty
Customer retention speaks of the quality of work and customer satisfaction and reflects our success rate. Studies have shown that poor customer service costs businesses huge. Faster and better service that creates a memorable customer experience can significantly improve your customer satisfaction.
Net Promoter Score or NPS
This metric measures the customer experience and predicts the growth of our business. Similar to customer retention/loyalty metrics, NPS measures user satisfaction. To measure customer experience and brand loyalty, a short questionnaire can be considered.
Calculation of errors
Most projects have very little margin for error. Project errors or mistakes that create bottlenecks lead to rework and have an irreversible impact on project performance. Error reporting can be a useful background for future analysis and provide enough space for future development.
Earned value:
Earned value provides strategic guidance and suggests the value earned from the money spent on a project to date. In other words, earned value is an accurate measurement of the work done in terms of profit earned by the customer. You can calculate the obtained value with this formula:
EV = work done/approved budget * 100
4. Effective product delivery
For effective delivery, the project manager must break down processes into actionable parts that can be easily implemented over time. A systematic increase in project progress sets the stage for quality delivery. Various components that contribute to effectiveness include:
Clearly define the project requirements:
All essential aspects of the project such as objectives, scope, requirements, etc. must be clearly stated, documented, and communicated to the stakeholders involved.
Effective and regular communication:
It is important to communicate clearly with the stakeholders involved. This issue helps negate assumptions and provides clarity of customer expectations.
Definition of duty dependence:
Determining task dependencies is clearly a key factor that determines the effectiveness of project delivery. This ensures that tasks are performed in the correct order for timely delivery.
Match the right resources to projects:
Matching the right skill with the right task at the right time is key. The best situation for any project manager is to make a decision in such a situation. Optimal project delivery can be achieved by allocating appropriate resources.
The number of completion of project milestones:
Effective completion of client-approved project milestones is a key performance indicator. This results in fewer revisions and speeds up the completion of the project.
Equipping a possible plan:
Unavoidable changes in project scope, costs, customer requirements, and resource availability can put projects at risk. Project managers must identify and evaluate risks in advance and predict a suitable plan to mitigate them.
5. Analyze project closure.
A key aspect of any successful project manager is analyzing the lessons learned from a completed project. Project closure analysis provides insightful improvements for all future projects and should therefore not be overlooked. Closing the project is usually a series of meetings between the project manager and the supervisors of each activity.
Important questions
- Who completes the tasks?
- What should be done to prevent colleagues from failing?
- What obstacles caused the work to be interrupted?
- In which cases were the strengths seen?
Conclusion
Project management metrics are fundamental to implementing sustainable project management practices and processes in any organization. The main point in planning them is to pay attention to their simplicity and relevance to the organization. Project management metrics are also important for improving the way projects are managed and delivered, as well as for demonstrating progress with maturity in project management.
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