A detailed guide on project management metricsAkanksha SrivastavaLast Updated: November 24, 2022
Project management metrics are the indicators of project performance. It helps you track and monitor the progress of a project in real-time. As project managers need to be on top of every task to successfully deliver projects, these metrics help them identify deviations in the original project proposal and take appropriate actions and corrective measures before it affects the project scope.
Key requirements of project management metrics
While choosing metrics in project management, it is vital to analyze if it is fit for the type of project you are undertaking. To ensure this, the following are some essential considerations you must make:
a. Alignment of the metrics with the KPI for project management
Project managers should have a clear idea of the deliverables and expectations of the clients. You should ensure that the project management metrics you choose provide accurate insights about the strategy, business model, KPIs, and project performance.
b. Data transparency
The prerequisite in any project management is the credibility of the metrics to provide accurate information. The project metrics should add value to decision-making in project management.
c. Contextualized project performance
Most clients prefer to have regular updates on whether the project plan is on track. The project management metrics you choose should align project performance with targets. You can also incorporate market statistics and industry benchmarks to communicate your company’s competency in delivering results.
d. Consistent results
Consistency is the key to every successful project. The project management metrics you choose should be able to deliver a consistent record of performance in understandable formats. It will help you maintain a good track record across multiple projects.
Types of project metrics
Depending upon the targeted outcome, the following are the different types of project management metrics you can choose from.
Productivity metrics determine the organization’s capabilities in providing services. It takes into account the input in terms of resources and the final project outcome to identify the productivity level. The ideal situation is to deliver more with fewer resources. Productivity metrics can help you determine the project’s feasibility and plan project milestones. Productivity metrics also play an important role in building KPI metrics for project management.
There are multiple metrics that you can leverage to prepare on the financial front. These are as follows:
a) Sales revenue
Sales revenue metrics analyze your project performance financially. It is useful in generating a five-years record to analyze your company’s performance over a period of time. It takes into account all the successful deliveries, market competition, business statistics, etc.
It is better to use these metrics to get a birds-eye view of the company’s performance based on multiple project records rather than just one. It will help you understand the bigger picture and make necessary changes in sales strategy.
b) Gross profit margin
Determines how much profit your organization is making per project. Higher values of gross profit margin should be targeted for successful project management.
ROI metrics compare the invested amount with the profit margin. The costs under consideration include the cost of resources, like raw materials, equipment, and overhead expenses.
Equationally, ROI= (Net profit/ Total cost) x100
Quality project management metrics determine if your customer is likely to provide you with repeat business. It is related to customer satisfaction which tells you whether or not your clients will recommend you to their friends and associates. Quality metrics assign a net promoter score to rate the overall project performance.
Quality metrics take several factors into account, including the number of deviations, timely delivery, customer complaints (if any), etc.
4. Customer satisfaction
Customer satisfaction metrics rate the quality of your service. It takes into account the customer survey data to score each project’s performance. The customer satisfaction score for different projects makes up a customer satisfaction index, which helps you analyze and predict your business growth curve.
Equationally, Customer satisfaction score= (Total positive responses/Total number of survey questions) x100
5. Employee satisfaction
Employee satisfaction is directly proportional to successful project management. If your employee satisfaction metrics score is high, you are more likely to deliver projects successfully. So, before you target external clients, make sure you build an engaging team.
Benefits of using project management metrics
a. Adds value
Productivity metrics help you make on-time deliveries. It adds value to the project management strategies by predicting the future requirements of the project.
b. Improves performance
You can leverage the project management metrics to optimize your team’s performance. It can help you take your project management capabilities to the next level by pre-empting unforeseen adverse situations.
c. Process management
Project management metrics assist you in identifying key players in successful project planning. Having all these information handy can help you identify the loopholes and modify the project plan before it affects the timely delivery of the project. It also allows you to allocate resources better depending on the risk factors involved at different stages.
d. Real-time project tracking
Real-time data analysis and project insights hold more importance than we realize. Project metrics allow you to track minute changes and deviations throughout the project tenure. So, if you observe a lag at one stage, you can plan to make sure that it doesn’t amplify in the final stages of delivery.
How can you assess project performance using metrics?
Metrics assess project performance by tracking each and every activity involved in a project. It communicates crucial information about the processes to the stakeholders to help them make fact-based and informed decisions. Specialized metrics, like the different types of project management metrics we discussed above, can be used to target specific KPIs in project management.
Challenges faced in the implementation of project management metrics
While the use of metrics is trending in project management, there are certain challenges associated with it, which should be addressed before implementing it.
- The project management metrics may require optimization to make them industry-compliant.
- If the parameters of the metrics are modified, it has to be made consistent throughout, including the data from previous years. So, recalculations will be required.
- Metrics derive trends based on data. You should keep a record of all the supporting data to address discrepancy if it arises.
- Project managers should set a baseline for each project so that they have the buffer to contemplate alternate action plans.
- Projects might face unique challenges at times that metrics cannot pick. So, project managers should be ready for that too.
Flow is a modern software that caters to all project management needs. The real-time project tracking and data analytics feature allows you to track projects from start to end and set priorities for successful deliveries. You can leverage the software to manage everything from resource allocation to budget, timeline, and process planning. Click here to get started.
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