Poorly executed projects are destined for failure. Several studies have been conducted in this area, and they have all concluded that serious project management problems exist across a wide range of industries. One of the most glaring issues is that 55% of project managers do not have real-time access to metrics for project management.
The growth of data and the tools to analyze it have led to the increasing reliance on project management data. Project metrics now supports fact-based project management and decision-making. Metrics for project management help managers plan better, manage costs, foresee risks, assess team productivity, and stick to the completion timelines.
Creating Good Metrics for Project Management
Every project has different objectives. Project metrics that may be good for one project may be unsuitable for another. It is, therefore, vital to tailor metrics to your specific needs. Below are a few tips for creating good metrics for project management:
- Have a good understanding of the objectives and goals of your project
- Determine what success looks like by identifying the factors determining the success of your project
- Determine how you will measure each critical success factor
- Keep project metrics focused on customers to derive the greatest benefits and have buy-in by all stakeholders
- Ensure your KPI project management definitions are simple and useful to the target stakeholders
- The underlying data should be readily available and credible
- Disseminate information throughout the organization on the need to gather program management metrics
- Create a budget and support staff for quality metrics project management
Useful Metrics for Project Management
A project’s objectives and complexity determine the metrics that you use. However, the following five project metrics typically capture the most important measurements:
- Cost: Effective cost management is a critical component of successful project delivery. The majority of projects overrun their budget, the most notorious being IT projects. According to the Project Management Institute (PMI), 43% of IT projects executed by companies exceed their initial budget. Project cost is closely related to other measurements below: productivity, satisfaction and quality, and work scope. When costs rise, these other variables can be adjusted to ensure the project remains on course.
- Gross margin: Normally, a project aims to contribute to the company’s bottom line. The gross margin is the difference between the income a project delivers and the expenses incurred running the project. The targeted gross margin should be determined during the project’s planning stages and measured throughout the project.
- Productivity: This project metrics allows managers to assess resource utilization. Examples of low productivity include delays in hitting key milestones, cost overruns, staff and vendor underperformance, etc.
- Satisfaction and quality: This is a customer-focused metric that should feature in all projects. There is a whole family of customer metrics that fall within this broad category.
- Scope of Work: Even though a project’s scope of work is established during the planning stages, changes midstream can detail the project. It is important to track change requests and changes and control them to ensure the project remains on track.
Implementing the Metrics
Below is a 3-step plan to implement project metrics:
- Step 1: Communicate with all stakeholders and let them know how metrics will improve project management. The idea is to get buy-in from all team members.
- Step 2: Design a metrics plan with guidelines all stakeholders can understand. Provide clear examples of using the project metrics dashboard to soften the learning curve and avoid delays in gathering data.
- Step 3: Begin implementing the plan. Closely monitor whether the metrics lead to the desired actions and take corrective actions where you find you aren’t building traction and gaining momentum.
Using a Project Metrics Dashboard
What is a dashboard? The everyday meaning is a panel fixed in a vehicle, plane or marine vessel that allows the driver or pilot to control and monitor performance. Similarly, a project metrics dashboard helps you monitor your business’s key areas and make the necessary changes to ensure objectives are met.
A project metrics dashboard can be a spreadsheet or a specialized software tool to monitor metrics for project management. Whichever method you choose, they both highlight key information visually so that you can quickly take note of the most important metrics, as shown in the sample image below.
(Image source: Pinterest)
In summary, the benefits of a project metrics dashboard as follows:
- Increased focus: A business metrics dashboard focuses attention on what matters most.
- Improved performance: With increased focus, you have improved performance in the long run.
- Reduces time wastage: Since management and staff understand what matters, less time is spent on non-core tasks. Once identified, non-core tasks can also be outsourced.
Spreadsheets Vs. Project Management Platforms
We have mentioned that one of the ways to create and manage dashboards is through spreadsheets. Microsoft Excel has been the de facto tool for project management teams for over two decades. And, with good reason. The software program has over 400 functions in 11 categories, making it a clear leader. It also comes with advanced charting and plotting features that aren’t available in other spreadsheet programs.
However, while Excel and other spreadsheets have been useful tools to monitor metrics for project management, they have their limitations. The main drawbacks are as follows:
- Steep learning curve: Spreadsheet programs have a steep learning curve. It takes the average user four weeks studying full-time to become adept at Excel. And, people must use these skills regularly or forget them. It is also impossible for a classroom session to teach you all the functions and their applications in different settings. A lot of training happens on-the-job and through self-inquiry. Project managers rarely have the time and resources to train teams from scratch or provide refresher courses. Often, team members will wing it and struggle to understand the data. Project management platforms are usually easy to learn and use. A new user can create an account, watch a short tutorial video, and get cracking within a few hours.
- Prone to errors: According to a University of Hawaii study, about 90% of spreadsheets contain errors. Some mistakes are easy to spot and are highlighted by the program; however, many errors escape detection and lead to wrong decisions. This can be very costly to the organization. Project management platforms are less prone to errors because users rarely enter formulas manually.
- Information overkill: It is challenging and cumbersome to limit access to certain sections of a spreadsheet. In most cases, everyone can see all the information on a spreadsheet, even when they are not the intended audience. The result is information overkill that leads to time wastage as people try to figure out what is relevant to their work or department. With project management platforms, access can be limited using user management tools. So, you only see what is relevant to you.
- Real-time monitoring: Projects need to be monitored in real-time. Excel doesn’t have this functionality, but project management platforms are deployed across the organization and integrate with other systems. When a user in one department/section enters data, the data is immediately available to everyone. For example, when a project accountant enters cost data into the accounting system, this data is shared with the integrated project management platform. Users with access to this data can view it instantly.
- Clunky collaboration: Collaborating via Excel has become much better but remains clunky. The only exception to this point is Google Sheets, which makes collaboration easy. However, most project management platforms offer easy collaboration.
- Email alerts: Excel allows the creation of beautiful task schedules with everyone’s name against their tasks. However, it isn’t possible to send people email alerts when their tasks are due, and it also doesn’t remind the project manager when critical milestones are scheduled. This functionality is only available in a project management platform.
- Instant reports: One of the things you can’t take away from spreadsheets is the deep analytics and depth of reports. Unfortunately, reports in Excel take a long time to build. Compare this with a project management platform that allows you to run a report at the click of a button. These reports can quickly be printed out, shared online, or emailed to stakeholders.
- Resource Management and allocation: Most project management platforms come with interactive people scheduling. You can quickly tell who has too many tasks, who is expected to go on vacation, and a lot more information to manage and allocate resources. This is not available in spreadsheet programs.
Project management software is unquestionably the best way to manage your project management metrics.