Learn the 3 Key Performance Indicators (KPIs) to target in project management. Jennifer Bridges, PMP, explains how in her latest training video.
Related: How Project Managers Use Dashboards to Track KPIs
In Review: Top 3 KPIs for Project Managers
Jennifer began by explaining that KPI stands for Key Performance Indicator, in almost any industry. We have personal KPIs that we might have to reach as part of our performance review process at work. And then there are KPIs that are used to measure performance across teams or projects or entire sectors and industries.
For project managers, KPIs can be those specific measures for determining success on a project.
Jennifer explained that you can use your KPIs as a guide to help you through your project. Those are the guideposts that can help you measure the time, cost, scope, and quality of the project. So what should you be tracking?
The top three things you’ll want to keep track are as follows:
- Resource allocation
- Labor costs
Pro-Tip: Establish specific and measurable KPIs in concert with the key stakeholders on your project and your team. Getting buy in from all parties is essential.
Take it further: If you’re interested for a more in-depth look at project KPIs, read how to establish a framework of KPIs in this article by PMI authors Gareth Byatt, Gary Hamilton and Jeff Hodgkinson.
Thanks for watching!
Today, we’re talking about the top three KPIs for project managers. What is a KPI? KPI is a Key Performance Indicator. Think of, say, like your dashboard on your car to help you determine, are you going too fast, are you going too slow? Think of a GPS system when you’re driving somewhere that helps you know different routes. Maybe it can give you some alternative routes on your project.
But these KPIs, they’re specific measures, and they consist of the most important goals on your project. So say, for projects, we think of the triple constraint, where we’re constantly looking at the time, the cost, the scope and the quality of the project.
The KPIs are very important measures that help us determine, at a quick glance, where we are. It helps us instantly discern the status, and it’s merely a rough guide. So we constantly look at these measures to help us as a guidepost to know how we need to navigate on our project.
Some of the best practices in selecting the KPIs for your project are that you develop these KPIs jointly with the people who are involved. You also get the stakeholders to agree on these KPIs. You also need to make sure that they’re relevant to the project. If you’re measuring things that aren’t relative to the project, then you’re going to be spending time with no results. Also, again, you want them specific and measurable.
When we look at the project life cycle, we look at a couple of things. One, these are the phases of the project where you start the project, plan the project, then you complete all of the work, and then you close it out. And then you have your project management outputs. So as time goes on in the project, the cost and the staffing levels in the project, they increase, and then they decrease. And through the course of time, we want to be tracking those variables, because that’s where we can get into the traps.
So the top three KPIs that we found as project managers, to help us gauge our performance, are these. First of all, we look at the project schedule. We want to know, are we on schedule? Are we behind schedule? If we’re behind schedule, what are the things that we need to do to get it back on schedule?
We also look at the resource allocation throughout the project. We want to know, do we have resources that are over-utilized or under-utilized? If you have resources that are over-utilized, that’s going to increase your cost. If you have them under-utilized, you may need to look at, number one, are those resources that you can use to help the others who may be over-utilized? If they’re under-utilized, you need to look closer to make sure, are they actually completing their work? They may need some more training or support to get their work done.
And the third one is labor cost. You want to keep a close eye on your labor cost to see, are you over-budget? Are you under-budget? And what are the things you need to do to get it back on track if you’re over- budget?
But if you need a tool that can help you manage your KPIs, then sign up for our software now at projectmanager.com.