With any business initiative, there’s an expectation that performance is monitored and measured to gauge return on investment and to determine if goals were achieved; business projects are no exception. Since data drives many decisions today, you will likely be expected to measure project performance with data. Here are some of the key ways to measure project performance and the key performance indicators (KPIs) that really matter.
Define project goals and set budget and timeline
Before a project even begins, the goals for the project need to be determined. You need to understand how project sponsors and key stakeholders will determine if the project is successful and ensure everyone is on the same page. Project success can be measured in many ways including if it was completed on time, on or under budget, if it resulted in more sales, improved customer service or increased efficiencies, and a combination of these or other factors. It’s imperative at the outset to decide for each project what good performance means and what success looks like.
Once goals are determined you can gather baseline metrics to record the status of business at the starting point of your project for just those things that are meaningful to your team and stakeholders. It’s essential to know where you started out to provide accurate performance metrics and to know when the project finished how your business was impacted.
Measurements of Project Performance
- Project impact: The reason your organisation embarks on a project is for some impact or benefit to an aspect of your business. Project impact includes such things as improved quality, better customer service, reduced costs, new functionality and more. Your specific project impact depends on the project you are running, and you should be able to compare your business before the project began to after it ended to determine the project impact.
- Financial: Costs need to be monitored throughout the project to be sure you’re tracking to the budget. Most organisations will want the costs of the project to be lower than the value of the impact to deem the project a worthwhile endeavour. When you are on top of your financial performance throughout the project, you are able to adjust things before you end the project out of budget.
- On-time: Very closely tied to the budget is on-time completion of projects. Hitting deadlines might be criteria for success on projects that must be launched by a certain date. If a project runs over on time estimates it also often exceeds the budget. Successful projects typically create budget and timeline milestones so costs and timelines can be monitored against your plan through the project lifespan.
- Resources: Knowing how much time team members are spending on a project is important for some organisations, especially to ensure that resource utilisation is as efficient as possible. Once you know how resources were utilised against the plan, your team can use that data to inform future projects.
- Quality: It’s good to segment your project into phases so you can evaluate your project quality while there’s still time to make adjustments before you get to the end. A quality review of your final deliverables and project management practices is also important for many organisations.
- Return on investment: When you compare the benefits of the project against the project goals as well as the costs of the project you can calculate a return on investment. This is usually a critical measurement for project stakeholder and company executives. A component of project success is certainly related to stakeholders’ perceptions of the project value.
- Solve the issue: Were you able to solve the problem or improve the process that was the impetus for the project? This is another important way to know if your project was successful.
Ultimately, the best way to measure project performance is to establish your goals ahead of time, set up measurements based on your project goals and monitor your performance throughout so you have time to adjust priorities and actions.
Since the best ways to measure project performance shift with the unique needs of each organisation and each project, there are many ways to measure it. For some inspiration browse our the KPI Library to find the metrics that matter most to your project.
Where to go from here
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