What project management success metrics are your best options to gauge the outcome of your projects? For many the safest route is by measuring ROI and schedule performance. We have nothing against them too, but here we’ve added other essential success metrics that beginner and expert project managers alike should focus on:
Success in project management is all down to ensuring you are on the positive side of the equation from the perspective of the stakeholder, the end user, and your very own set of standards. In the final reckoning and absent the hyperbole, success in projects still ultimately rests on how happy you have made the crucial set of people involved. That could mean hundreds of project management metrics if you have a mind to dive into minute details of your projects, to around ten major project management success metrics that you could promote as top of myriad categories.
Years and contributions from a great number of key people have made sure that project management is almost on par with the exact physical and natural sciences with its drive to measure project management performance that could ever play a part in the success or failure of any project undertaking. In science as with project development, if the whole undertaking cannot be measured, it makes no sense to pursue it.
Under the context of our times, that same dedication to continuously update project management approaches to meet evolving needs is reflected in the growing sophistication of project management tools that incorporate many of the ideas discussed here, affording project managers power and convenience unheard of by their historic counterparts.
Indeed, project management software is now a crucial component of the modern project manager’s arsenal, powering perhaps all of the great modern undertakings and conveniences that any group of people on the planet has taken as normal part of their lives.
To illustrate, one of the most powerful project management software, Wrike, compares metrics to help businesses make smarter decisions. For instance, it allows the user to see how long a task it taking to be accomplished and compare that period to the estimated time values. We will see more of Wrike’s capabilities throughout our discussion of critical metrics for project management success. While we’re at it, why not sign up for a Wrike free trial here so you can appreciate how technology rams up metric measurement.
If your department does not produce or contribute to the measurable objectives of your company, you are most likely staring at the immediate termination of your department, its resources to be moved to another area that produces results. Metrics exposes the value of employees and entire teams like no other.
If you are the hungry, proactive project manager type, however, you do not want to get the axe; instead you’ll want to get somewhere in your field. In this case, you will be dealing with metrics in another frame of mind: to improve your workrate and work quality, as well as your team’s.
For a start, you will want to work on goals that could allow you to measure with well-defined metrics. Mostly, it means that your goals need to be relevant, specific, attainable and of course, time-based.
To measure project success, it is not enough to verify if the system works or not—it is also important to verify how well the system is being used by the user community. That is the true measurement of project success. It is important to have the project metrics based on this guideline so as to measure the project success better.
In essence, project metrics are verifiable measurable parameters describing the project. They play a major role in project control. Traditional approach to project metrics focused on the project deliverable success measurement alone. This outlook is changing now, the emerging new approach based not only on project justification but also on project acceptance by the user community and the resulting ROI. The project metrics for success should be able to measure the benefits of the project to the core business units and the when and what of project success measurement.
The project metrics need to be defined at the initial phase of the project.
|Project Management||Project time, cost, ability to meet the project specifications, change requests, quality standards|
|Project Success||Benefits accrued to the organization, stakeholder satisfaction, user satisfaction, number of issues raised since going live, usability measure, end-user feedback, problem resolution, process ease/improvement/complication|
|Business Success||Cost savings and reductions because of the project, ROI, Return on expectations, competitive advantage gained, opportunities identified, core competency enhancement, process efficiency improvement, reduction of manual intervention/process, real-time access to data, reports, tighter integration, enhanced flexibility, user empowerment|
The table makes it clear that metrics should be measured during and after the project execution. Measuring metrics is not a one-off affair. You need to monitor these success metrics over a period of time so as to get the complete picture of the project: in fact, time is key factor in the measurement of the metrics—especially if the projects are aimed at creating something new or at implementing new processes or new systems. You will not want to wait for the most innovative project teams to show you that post implementation review is a must to identify the overall project success/ failures, challenges and takeaways.
Hence the metrics for measuring the project success or the level of goal achievement in case of these projects need time so as to measure the actual impact.
Along with time and the benefits, you need to include other crucial factors to metrics creation, all serving as key to your project management success: cost, scope, quality and risks.
More specifically, you will be dealing with the following project management metrics examples to make project management a success:
We mentioned that end-user reception—customer satisfaction—is the ultimate measure of project management success, hence this metric heading the list.
In simple terms, customer satisfaction means that customer expectations are met. This requires a combination of conformance to requirements (the project must produce what it said it would produce) and fitness for use (the product or service produced must satisfy real needs). The Customer Satisfaction Index is an index comprising hard measures of customer buying/use behavior and soft measures of customer opinions or feelings.
Index is weighted based on how important each value is in determining customer overall customer satisfaction and buying/use behavior. Includes measures such as repeat and lost customers (30%), revenue from existing customers (15%), market share (15%), customer satisfaction survey results (20%), complaints/returns (10%), and project-specific surveys (10%).
Productivity is output produced per unit of input. Productivity measures tell you whether you’re getting your money’s worth from your people and other inputs to the organization. Typically the resources have to do with people, but not always.
A straightforward way to normalize productivity measurement across organizations is to use revenue per employee as the key metric. Dividing revenue per employee by the average fully burdened salary per employee yields a ratio. This ratio is the average-per-employee “Productivity Ratio” for the organization as a whole.
Other productivity metrics might be number of projects completed per employee, number of lines of code produced per employee. The key to selecting the right productivity measures is to ask whether the output being measured (the top half of the productivity ratio) is of value to your organization’s customers.
Cost Performance Index is your cost efficiency metric. It’s determined by dividing the value of the work actually performed (the earned value) by the actual costs that it took to accomplish the earned value. The ability to accurately forecast cost performance allows organizations to confidently allocate capital, reducing financial risk, possibly reducing the cost of capital.
CPI Standard Deviation is an even better metric, one that shows the accuracy of project management budget estimating.
There are two types of cycle time—project cycle and process cycle. The project life cycle defines the beginning and the end of a project. Cycle time is the time it takes to complete the project life-cycle. Cycle-time measures are based on standard performance. That is, cycle times for similar types of projects can be benchmarked to determine a Standard Project Life-Cycle Time. Measuring cycle times can also mean measuring the length of time to complete any of the processes that comprise the project life-cycle. The shorter the cycle times, the faster the investment is returned to the organization. The shorter the combined cycle time of all projects, the more projects the organization can complete.
The most appropriate formula for evaluating project investment (and project management investment) is Net Benefits divided by Cost. By multiplying this result by 100, this calculation determines the percentage return for every dollar you’ve invested.
The key to this metric is in placing a dollar value on each unit of data that can be collected and used to measure Net Benefits. Sources of benefits can come from a variety of measures, including contribution to profit, savings of costs, increase in quantity of output converted to a dollar value, quality improvements translated into any of the first three measures. Costs might include the costs to design and develop and/or maintain the project or project management improvement initiative, cost of resources, cost of travel and expenses, cost to train, overhead costs, etc.
Cost of quality is the amount of money your business loses because its product or service was not done right in the first place. It includes total labor, materials, and overhead costs attributed to imperfections in the processes that deliver products or services that don’t meet specifications or expectations. These costs would include inspection, rework, duplicate work, scrapping rejects, replacements and refunds, complaints, loss of customers, and damage to reputation.
The Schedule Performance Index is the ratio of total original authorized duration versus total final project duration. The ability to accurately forecast schedule helps meet time-to-market windows. SPI Standard Deviation is an even better metric that shows the accuracy of schedule estimating.
The value of this project management on time metric is always close to one.
This is one of the key success factors for project management.
To measure this metric, you need to develop measures of fit, which means the solution completely satisfies the requirement.
A requirements performance index can measure the degree to which project results meet requirements. Types of requirements that might be measured include functional requirements (something the product must do or an action it must take), non-functional requirements (a quality the product must have, such as usability, performance, etc.). Fit criteria are usually derived some time after the requirement description is first written. You derive the fit criterion by closely examining the requirement and determining what quantification best expresses the user’s intention for the requirement.
An employee satisfaction index (ESI) will give you one number to look at to determine employee morale levels. The ESI comprises a mix of soft and hard measures that are each assigned a weight based on their importance as a predictor of employee satisfaction levels. The ESI should include the following (percentage represents weight):
Most project management metrics benchmark the efficiency of project management—doing projects right. You also need a metric to determine whether or not you’re working on the right projects. Measuring the alignment of projects to strategic business goals is such a metric. It’s determined through a survey of an appropriate mix of project management professionals, business unit managers, and executives. Use a Likert scale from 1-10 to rate the statement: “Projects are aligned with the business’s strategic objectives.”
Admittedly you will encounter more sophisticated metrics along your professional life, but these ten are essential ones if you want to set a good foundation for success in project management. These are not mere concepts, too: all of these find wide and accepted applications in this industry. How you find practical approaches to improve the customer satisfaction of your business, lessen costs while keeping a sharp eye on your project schedules are field wisdom that will set you on the right path.
IMPORTANT: It is recommended that you use project management software capable of running deep analytics to ensure the integrity of your metrics. You can, in fact, try Wrike as a good example of this type of software. Simply sign up for a Wrike free trial here.
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