Key performance indicators (KPIs) in project management consist of various specific measurement tools for indicating how well teams are achieving specific goals. Project management KPIs are generally agreed upon early in the project. They reflect the organization’s central concept of the project and solidify project responsibility across administrative divisions.
While each team may have differing tasks to complete and roles to play, they all support the KPIs in their own way. Understanding the role of KPIs in project management can help build team synergy and provide a framework for the data collection needed to keep track of organizational project success.
Key performance indicators consist of the most important performance goals across all aspects of team involvement in a project. Effective KPIs should be:
Collectively, KPIs are a powerful management tool to bring about organization-wide success. Keeping track of accurate metrics from varying teams can identify where more direction is needed or where incentives, plans and other resources, such as training, should be allocated.
While the scope and terms of an organization’s KPIs may differ from project to project, there are various types of data that can be helpful to any organization. Top project management benchmarking measures include return on investment (ROI), productivity, cost performance, cycle time, customer satisfaction, schedule performance, employee satisfaction and alignment with strategic business goals.
Examples of KPIs within project management include:
Specific topic areas can include:
Knowing how, where and why project budget deviated is important in tracking down waste and inefficiency, as well as for planning better for the unforeseen challenges inherent to most projects.
Understanding what tasks took more or less time can help in the efficient allocation of consulting and training time. In addition, understanding which teams had to go above and beyond can help build a meaningful incentive and reward program, as well as improve time allocation planning.
Projects shift over their life cycle. Identifying milestones and achieving goals are important to maintaining project momentum. When too many milestones are not achieved or are shifted, employees may feel frustrated. Identifying when milestones are missed can help restart a project and mitigate similar challenges in the future.
Keeping accurate records related to cost variance can provide a detailed profile of which teams and processes are most efficient. It can also help companies decide whether a project was worth the investment and assist managers in deciding whether to initiate similar projects.
Savvy project managers can use KPIs not only as a performance management tool, but also as a motivational tool. When all teams are united with common goals, their individual contributions can shine. Team competition, incentives and rewards can be a powerful motivating tool to keep project momentum pushing forward. Using quantifiable and consistent KPIs can help project managers assess project goals in an objective, fair and powerful way.
Project performance and success isn’t always easy to measure. Harnessing the power of a strong key performance indicator strategy can help project managers lead their teams to higher standards, greater goals and successful projects.