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, both of which are addressed by standard project management software features. The two metrics get to help you determine how your project is doing in general
However, there exist other essential project management success KPIs that can be used. Below, you will learn the benchmarking methods used by both beginners and experts in managing projects. This guide will also help you understand when to use all or just a combination of these KPIs to help you measure outcomes more accurately.
The purpose of project management boils down to ensuring that you get on the good side of project stakeholders and end-users. Now, accomplishing that is no easy task. You could be looking at using a vast array of project management metrics to be able to cover even minute project details, or you can narrow them down to around 10 major project management success metrics to make sure that you do not miss a single specific aspect. However, there are also other factors in project failure, as you’ll find out below.
To ensure that you increase the likelihood of success for each project your team undertakes, you can take advantage of the best online project management tools for developers. 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 treated as a normal part of their lives. Taking a look at the most recent project management statistics will affirm this.
To illustrate, one of the most powerful project management software around, monday.com can collate projects and tasks and help you connect related undertakings. The system organizes information in a spreadsheet, which users can search to get instant access to the data they need. The spreadsheet data, apart from being clear and organized, can be converted into actionable metrics with ease. Updates can also be made to the spreadsheets daily while the system allows for easy access to project management success metrics.
If you want to experience the tool’s features for yourself, you can sign up for a free trial of monday.com.
Scale of 1-100
Customer Satisfaction Score = (Total Survey Point Score / Total Questions) x 100
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 to the determination of customer overall customer satisfaction and buying/use behavior. It 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 = Units of Input / Units of Output
To measure productivity, you first have to know what it is. Productivity is the output produced per unit of input. Measuring productivity basically informs you if you’re getting significant returns on your investments. Although resources are usually linked to people, this is not always the case.
To accurately measure productivity in your organization, using the metric revenue per employee is recommended. 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.
There are other productivity metrics available to you, which include the number of lines of code produced per employee or the number of projects completed per employee. To accurately choose the right productivity metric, make sure that the top half of your productivity ratio (output to be measured) is of value to your customers.
Earned Value / Actual Cost
Your cost-efficiency metric is called the Cost Performance Index (CPI). To determine your CPI, simply divide the value of work performed by the actual costs of accomplishing it. This metric allows you to reduce financial risk and capital costs while allocating capital confidently.
An even better measurement method is the CPI Standard Deviation, which shows how accurate your project budget estimation process is.
The project life cycle is the one that defines your project’s beginning and end. There are two types of cycle time–process cycle and project cycle. Cycle time is the time it takes to complete the entire project life cycle. Cycle time metrics are based on standard performance. For similar projects, cycle times can be measured to determine a Standard Project Life Cycle Time. Cycle time metrics may also mean measuring the time it takes to complete any process that is included in the project life cycle. ROI depends largely on project cycle time. The faster the cycle time, the faster ROI comes. Therefore, the shorter the combined cycle time of all projects, the more projects the organization can complete.
(Net Benefits / Costs) x 100
Net Benefits divided by Cost is one of the most accurate formulas for assessing project and project management investments. Simply multiply the result by 100, and you can determine the returns on every dollar you have invested. With this metric, you put a dollar value on each data unit that can be collected and used to measure Net Benefits. Sources of benefits can come from a variety of metrics such as savings of costs, contribution to profit, and an increase in output quantity.
As for costs, they may include those associated with the design, development, and maintenance of a project, resource cost, travel expenses, and overhead and training costs.
Another key project success metric is the cost of quality. Basically, the cost of quality is the amount of money that a company loses from poor products or services. This metric covers costs such as those of materials, overhead, and labor, which are associated with a product or service’s failure to meet customer specifications or expectations. These setbacks entail additional costs in the form of rework, inspection, scrapping rejects, duplicate work, complaints, damage to reputation, loss of customers, and replacements and refunds.
Essentially the ratio of total original authorized duration against total final project duration, the Schedule Performance Index can accurately forecast project schedules. However, an even better schedule performance metric is SPI Standard Deviation, which shows how accurate your schedule estimation is.
Another key success factor for project management is the Requirements Performance Index (RPI). The key to developing the index is for one to come up with measures of fit, to determine if a solution satisfies the requirement.
An RPI can measure how project results meet requirements. It can measure requirements, which include both functional and non-functional types. Functional requirements are those that a product is designed to do, or in this case, an action it must take. On the other hand, non-functional requirements are qualities that a product should have, which include performance and usability, among many others. Fit criteria are derived sometime after the writing of the requirement description. This is achieved by examining the requirement and identifying the best quantification needed to express user intention for the requirement.
An Employee Satisfaction Index (ESI) is designed to help you determine the morale levels of your employees, which it does by giving you one number to look at. ESI is a mixed bag of both soft and hard measures, to which weight is assigned based on their individual importance in predicting employee satisfaction levels. The ESI should include the following (percentage represents weight):
Most project management metrics are designed with one goal in mind–benchmark project management efficiency. However, managers also require a metric to determine whether or not they are working on the right projects. One such metric involves measuring the alignment of projects to strategic business goals. This metric is created by conducting a survey of a mix of project management professionals, executives, and business unit managers.
One such survey may include the question:
Use a Likert scale from 1-10 to rate the statement: “Projects are aligned with the business’s strategic objectives.”
As a project manager, you are bound to encounter more complex metrics in your practice. But the above-mentioned are the most essential ones and would come in handy if you are to set up an ideal project management foundation. And make no mistake; these are not confined to being concepts as they have numerous applications in the field. Sticking to these metrics will help you reduce costs, boost customer satisfaction, and keep close tabs on your project schedules. They are much-needed field practices that can send your project management efforts on the right path. Of course, any company will still need to use a project management tool. If you run a growing business, using the top project management software for medium businesses is highly recommended.
And we’re done. If by now, you think you know enough of project management success metrics to start crafting them, then we recommend that you get your hands on a great project management tool such as monday.com. You can explore its features and functionalities if you sign up for the free trial offered by the vendor.
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