5 Key Project Management Metrics

The growth of available data has prompted organizations to increasingly rely on success metrics for a variety of business operations, including project management. Measurement practices have been integrated into projects to support fact-based project selection and decision-making. They help management understand capabilities and facilitate better planning for production, service delivery or product development. Project management metrics can help control costs, improve quality and identify important industry trends.

Project management metrics allow companies to determine the success of a project and help project managers evaluate a project’s status, foresee risks and assess team productivity and quality of work. As a tool, project metrics can provide many good reasons for implementation.

Read on to learn more about creating good project metrics, which are key metrics, what they measure and how to implement them.

How to Choose Project Metrics

Each project manager typically has different objectives, and success metrics that work well for one business might not work for another. For that reason, it’s important to tailor project metrics and reporting to your business’s unique needs. However, keep in mind that broad appeal and approval may be easier when success metrics focus on customers, with success defined from a business point of view. Here are some additional tips:

• Keep definitions of project management KPIs and project metrics simple and useful
• Plan for the long term, including setting things up for comparison to competitors
• Get buy-in from senior management
• Ensure that underlying data is both available and credible
• Communicate the need to gather project management metrics, along with your goals and purpose
• Be sure you have the budget and staff needed to support your project metrics plan

5 Key Project Metrics

Different project management metrics can be defined based on a project’s objective and complexity. However, the following five key project metrics typically cover the most important measurements:

1. Productivity

This metric allows project managers to assess the utilization of resources. It compares the total effort to the budgeted effort, which has a direct impact on the bottom line. Delays in the timeline, underperformance by staff or vendor and unavoidable circumstances can all impact the productivity metric.

2. Scope of Work

A project’s scope is typically established right up front, but changes and additions can derail even the best project manager’s efforts. Tracking change requests is necessary, to control them and keep the project on time and budget.

3. Quality and Satisfaction

Quality assurance is a truly customer-focused metric. Assuring low defects throughout the project, as well as a quality deliverable at its end, should be part of every project. Catching defects early can also help prevent the entire project from losing focus and failing.

4. Cost

Measuring how costs are managed is often critical to a project’s success. Cost management is related to other variables, such as quality, scope and productivity, so if it varies above or below projections, the project can suffer. Ideally, cost is closely monitored throughout the project so if costs rise unexpectedly, variables such as scope or time are adjusted and the project can still achieve its objectives.

5. Gross Margin

Typically, a project’s ultimate goal is to contribute to the organization by increasing profits. The gross margin is the difference between total income achieved and total costs spent on the project. A project should have a target gross margin established in the planning stages, and it should be measured throughout. Project managers who achieve or exceed target gross margins are often extremely valuable.

Implementing Project Metrics

Once project metrics have been clearly defined to suit your organization’s needs, it’s time to begin implementing them. First, communicate with users to help them understand the process, its importance and how metrics can help improve projects. Provide clear examples, such as “the dashboard will show us where we lack documentation, so we can prevent delays by gathering needed information.”

Create a project management metrics plan with guidelines everyone can understand, which may help you gain support. Explain the key metrics you will be tracking, how you’ll track them and the objectives you hope to achieve. Then, start implementing the plan. Remember that project metrics should lead to action, otherwise, they may not be useful. Correct the plan as you identify unusable metrics.

Why Use Project Management Metrics?

Tracking these five project management metrics can help give project managers better control over the project and better odds for success. Over time, organizations can gain insights into which methods are successful and which ones need finer tuning. This can also allow time to make improvements for later projects. Finally, implementing project management metrics can build historical data to help improve future planning, and allow for comparisons.