Each project a team takes on can always serve as a learning opportunity. That’s why metrics in project management are crucial to understanding the success and viability of an initiative. Whether a project is for the benefit of a paying client or an internal organizational goal, project performance metrics help measure the success of a project against its defined outcomes.
However, each project also presents a unique opportunity to refine your team's processes, become more efficient, and drive better results.
How? By measuring and analyzing project management performance metrics. Here, we'll look at some of the most common types of evaluation techniques and discuss project management performance goals that can help you squeeze the most value out of every project.
Why are project metrics important?
Project management metrics are an effective way to evaluate the progress of a project. Measuring your project progress against specific factors helps clarify the management process.
These metrics in project management can also help guide the objectives of a project, giving teams the ability to track performance and make improvements as needed.
What are the benefits of using metrics in project management?
By following and analyzing the right indicators, you'll gain key insights into your team's performance — from both a high-level and individual perspective. You'll be able to pinpoint bottlenecks in workflows and other inefficiencies that you can then correct, adding to your project assumptions list and improving future project performance.
Additionally, tracking and collecting this type of information can come in handy when it's time for your project management performance review. Think about it: the more raw data you have, the better you can demonstrate your team's successes.
Taking ownership of your team's work by analyzing project outcomes, identifying inefficiencies, and preparing improvement plans sends a clear signal to management. It demonstrates that you're a true leader who is dedicated to the success of the organization as a whole.
- Measure team productivity
Relevant metrics in project management can demonstrate the productivity of a team. For instance, the on-time delivery (OTD) rate or service level agreement (SLA) rate can measure the ROI of the project.
- Optimize team performance
While it is imperative to ensure the team's performance level, forward-looking management looks for areas of improvement. Relevant project metrics allow you to expand your knowledge of project-related details. Overall, project performance measurement eradicates uncertainty and creates avenues for better, more informed decisions.
- Track ongoing progress
Management performance metrics also measure the ongoing progress of a project. This is vital so you can identify the roadblocks early and ensure that there is time to course-correct as needed.
With Wrike Analyze, project managers have crucial reports and intelligence at their fingertips, allowing them to make informed decisions, track progress, and monitor KPIs.
Which metrics can you use to study performance?
Let's look at some key ways of measuring project management performance.
- Schedule: Naturally, one of the first project management performance metrics you should review is the timeline. Were project tasks and milestones achieved on time, as determined in the planning phase? What about final project delivery? Was it completed on schedule? With the right task management tools in place, you can easily track timelines throughout the project lifecycle, and analyze them after project completion to determine exactly where things went off course.
- Budget: Going over budget often due to poor planning. Maybe you forgot to account for a project element like design, materials, or testing. Whatever the reason, delivering a project within its initial budget is a critical metric of success.
- Scope: A project's scope includes its stated goals and deliverables, as well as the individual tasks that are required to achieve these. Often, scope creep occurs as the project progresses, leading to budget overages and delayed delivery. This is why it's critical to clearly define project scope at the outset and ensure every team member and stakeholder understands its goals.
- Productivity: Productivity defines the relationship between a project's inputs and its outputs. While this metric is useful at the organizational level, it can also be used from project to project to get a clear picture of team efficiency. Productivity defines the relationship between a project's inputs and its outputs. The goal is to get as many units of output as you can using the least amount of inputs possible.
- Return on investment (ROI): ROI looks specifically at the value of a project's outcomes vs. the dollar amount spent to complete the project. ROI can be expressed as a mathematical equation. To calculate it, you must first assign a value to each benefit derived from the project. Common benefits include cost savings, improvements, increased output, or contribution to profit. Once you find these, use the formula ROI = (net benefits/costs) x 100 to calculate the project's return on investment.
- Customer satisfaction: This metric assesses the quality of a product or service using customer survey data. Ideally, the service or product should serve its intended purpose and satisfy the real needs of customers. Tracking customer satisfaction metrics can monitor aspects like revenue generated, repeat purchase clients, lost clients, complaints, and customer survey results.
- Actual cost: Actual cost reveals the total amount of money spent on a project calculated by adding up all the expenditures throughout its lifecycle.
- Schedule variance: This metric considers the budgeted cost of work scheduled and work completed. It tells if the project is under budget or exceeding its budget. Learn how to calculate earned value by subtracting the budgeted cost of work completed from the budgeted cost of work scheduled. Negative schedule variance means that the project is running late.
- Cost variance: This shows the discrepancy between the predicted budget and the actual costs within a specified period. A negative cost variance shows the project runs over budget, whereas if it's positive, it means the project is under budget.
- Cost performance: This metric is also used to measure cost efficiency. It is calculated by dividing the value of tasks performed (earned value) to the actual costs incurred. Cost performance projection helps you to make more accurate budget estimates.
How do you choose metrics in project management?
Each project has different requirements and needs unique project performance metrics to align with its goals. Consider the limitations of critical success factors for project management before you choose metrics to monitor.
Identify your goals and success factors
First and foremost, determine your goals and understand the purpose of your project. It is essential to pick the project metrics that are appropriate for your project’s needs and success factors. Based on your project goals, decide on the metrics that help you identify and execute your objectives.
How to set project management performance metrics with Wrike
Along with clearly defined deliverables, you should always have project management performance goals tied to every project. We've seen how specific metrics can help you understand project values and organizational efficiencies — and with Wrike, you'll be able to easily track these metrics with a suite of robust analytics tools.
For instance, Wrike allows you to create customized, advanced dashboards for greater insight into bottlenecks. This means you'll be able to respond more quickly to issues that could derail your project. Wrike also allows you to easily build reports tailored to your project for deeper, more insightful data.
With Wrike's project analytics tools, you'll get the insight your team needs to perform at its best. Ready to see for yourself? Fill out the form below and try it free for two weeks.