A Guide to Project Performance Metrics

ProjectManager.com

Managing a project successful means staying on top of progress. But what does that actually mean? 

Increasingly, success is measured by data, usually the end product of clearly defined goals and metrics. The rise of The Internet of Things and Big Data mean an increasing emphasis on analytics to measure progress and performance, usually through visual representations, also known as Data Visualizations. So what does all this have to do with your project?

Everything.

Your project is awash in measurable data that you can use to track your project’s health, performance and, ultimately, success. And your stakeholders want to be shown precisely how your project is going. This simple guide will help you define what can be measured, what should be measures, and ultimately how best to display those metrics to view the health and success of your projects. 

1. Define Success

The first step isn’t about working out what to measure. Before you can do that, you need to know what’s important to you. Is it:

  • A project that delivers on time?
  • Happy customers?
  • Meeting your quality targets?
  • Finishing under budget (or at least on budget)?
  • Something else?

In reality, it’s likely to be a combination of all those things but something will jump out as the most important. Pick the top two or three things that are your “must haves.” Discuss them with your team so that you agree how you are going to define success on this project.

2. Choose Your Metrics

Now you know what is important to you and what success looks like for this project, you need to come up with some metrics that help you measure those. See? You only spend time and effort measuring the things that are meaningful. Who cares how many changes have come from Marketing and how many from Finance if the essential thing is that the end result is a product with no defects?

Here are three of the most popular performance metrics.

Schedule Variance

If it’s critical that you hit your deadline because the product must be launched before a certain date, then you’ll definitely want to measure how you are doing against your project plan and whether you are making progress as you expected.

Schedule Variance relates to the difference between what you said you would do by this point in the project and what you have actually done. By comparing the planned work to the actual work completed you can calculate overall project slippage. This is really useful for knowing how much time you have to make up and whether you can hit those dates.

Cost Variance

If staying on budget is more important, then you’ll choose metrics that show you how much you have spent and whether that lines up with what you thought you’d be spending at this point.

Cost Variance is similar to Schedule Variance. It tracks the difference between your planned expenditure and your actual expenditure. You’ll be able to see if you have spent more than you anticipated which gives you a heads up that you’re burning through money more quickly than you expected. You can then adjust your budgets accordingly. You are unlikely to be able to get any of that overspent money back though, which is why it’s important to monitor this one closely if costs are important to you.

Resource Utilization

When you can’t afford to have your team members sitting around, you need to know how much time they are spending on the project. This also lets you see who is overstretched so you get an early warning of potential burnout in the busiest people on the team.

Resource Utilization is calculated by comparing the total effort spent by the resource with the total planned effort spent by the resource. You’ll be able to identify who is spending more time on the project than planned and who is doing less.

The narrative behind Resource Utilization is important because the numbers alone don’t give you much. Knowing that Samuel spent 50% less time than expected on the project doesn’t tell you anything. You’ll need to dig down and find out why. Potential reasons could be:

  • He hugely over-estimated his tasks and he’s doing his work much faster than planned.
  • He has taken an unplanned holiday so isn’t available to work.
  • He has gone home sick so isn’t available to work, and you don’t know when he’ll be back.
  • He is delegating his work to someone else, so it is still getting done but is appearing on the time sheet of someone else.

As with any numbers, understanding the story behind them helps you make the right decision.

In this step you’ve identified the metrics that go hand in hand with the success criteria that you want to track. On small projects you might just have one main metric. On larger projects you’ll have a selection of metrics that give you a bigger picture view. Whatever you decide is fine because you’ve already aligned your metrics to what is important.

3. Measure Your Progress

As the project moves forward you can track your performance. Use the metrics that you have chosen. These link directly to how you are measuring success, so you’ll be able to see how you are doing at a glance and whether you are on track to hit your targets.

You’ll want to look at (and act on) the data that the metrics give you at least once a month. On smaller, agile projects, you should be reviewing status a lot more frequently than that: at least once a week, but go more frequent even than that if it makes sense. At some points during the project it’s completely normal to feel as if you have to track them daily!

4. Refine and Improve

The way you set up the project at the beginning might not be the best way to carry on monitoring the project. As you move through the project life cycle you’ll learn more about how the stakeholders are reacting to your reports. Your project may also change quite drastically and suddenly the success criteria you thought were important at the outset are less so. Something else comes to the fore as a measure that you really need to track. That’s why you should be open to the idea of changing, refining and improving your performance metrics.

There are two sets of improvements or changes to consider as you go forward.

First, are your metrics the right ones? Once you’ve been tracking them for a while you’ll know whether they are telling you the data that you need to make decisions. If they aren’t, it’s time to look at what else you could track instead that would give you better information about how the project is doing.

Second, how easy is it to get to the data? If it takes you a long time to calculate the results and present them to share with the team, then your project tracking is slowing you down.

It’s easiest to see how the metrics are changing if you set up a dashboard to show you everything at a glance. Then you’ll only have one screen to look at. Refine and improve how you set up and access your project tracking data as you go to make life as easy for you as possible.

You can automate much of the process of monitoring project performance by setting up your metrics in your project management software. Then use the dashboard features to report on progress in real-time. ProjectManager.com makes it easy to see the status of your project at any time, from anywhere. You’ll be able to track how well your team is doing with the performance measures you have chosen, using a personalized project dashboard. Take a Free Trial Today.

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