The life of project managers has always been tough, and it gets irksome when they have a tight time window and budget.
‘Do clients care about this?’
The answer is ‘Big NO’. Clients just want timely delivery of promised project deliverables, and this puts more pressure on project managers. Now, this fact begs the question: ‘How can project managers get the monkey off their back?’
‘By monitoring what matters from business perception.’
Even, there is a famous proverb in the project management world: “You can’t manage what you don’t measure.”
This old adage signals towards metrics that project managers should track to ensure success and bolster client relationships. The prominence of project management metrics shouldn’t be taken lightly because 55% of organizations struggle during the project management journey due to no access to real-time project KPIs, revealed by the latest industry reports.
To be honest with you, I understood the importance of ‘Tracking’ when I started taking my workout sessions seriously. I have been tracking the volume of calories and making changes in my diet plan accordingly. Of course, I have experienced a notable transformation in my physique, however, I am yet to get six packs abs 🙁 …did I just give you a real-life example of tracking what matters most? Oh hell, yeah!
Besides metrics, project managers should also keep a tab on SMART goals to ensure success. These goals comprise the following elements:
Thinking there are so many project management KPIs and tracking all of them is next to an impossible task? Well, you are right there, as there is no point in drowning in the pool of project metrics.
Just keep these 3 factors in mind, and you will definitely get clarity about quality metrics in project management:
- Make project goals clear to your team
- Zero in on critical success factors that you need to accomplish for project success
- After jotting down critical success factors, develop strategies by putting your ideas and insights gained from team meetings in one place
I have rounded up some crucial project performance metrics that you shouldn’t miss out on, so pay heed to the below-given pointers:
Every company wants its project managers to hit high productivity levels so that business growth can be improved in the desired manner. For project managers, productivity totally depends on their way of utilizing resources.
Ideally, they should strive to bring the desired results to the table by using resources as less as possible. To calculate productivity, use this formula:
|Productivity = Units of Input/Units of Output
All in all, productivity is the PM metric that requires undivided attention.
2. Gross Profit Margin
‘Can you guess what matters most for businesses except strong client relationships?’
Of course, Profit! You will be considered as a successful business owner if you manage to elevate profit levels without affecting the association with clients.
For project managers, keeping a close eye on the project management metric named ‘Gross Profit Margin’ is extremely important, to stay nimble in the eyes of higher-ups.
Therefore, project activities should be performed in such a manner that promises high profit. In short, a better profit margin leads to higher business growth.
Formula to calculate GPM:
|Gross Profit Margin = (Total Profit-Total Costs)/100
3. Return on Investment (ROI)
Most of the organizations outsource their non-core business projects only to save a big chunk of investment money. Sounds like a commendable business move? Well, it is.
It gets fundamental for third-party companies to deliver promised project deliverables to clients on time and within the set budget while keeping ROI in mind.
Evidently, you do some investments to complete project activities aptly. At the same time, it gets crucial to gain significant returns so that the business’s bottom line stays at a secured level.
Hence, project managers should keep a tab on ROI, one of the crucial metrics in project management, to keep enjoying success.
Formula to calculate ROI while handling projects:
|ROI = (Net Benefits/Costs) x 100
At this juncture, I would like emphasize on unparalleled project management software, ProProfs Project, which enables project managers to secure high ROI. This tool bridges the gap between project managers and success by offering these astounding features:
- Intuitive dashboard for a seamless project tracking
- 24/7 accessible reports to gain insights into the performance of project executives
- Gantt charts to scrutinize the progress of project tasks
- Automated invoicing for flawless billing
4. Employee Satisfaction Score
Employee satisfaction score is one of the vital project success metrics that every business should monitor closely, because you will struggle while getting the upper hand over competitors if your project executives are not happy with the work environment or anything else.
It is worthy to note that a satisfied employee hits a higher efficiency level than an ungratified one. To put it briefly, both employee morale and project success go hand-in-hand.
So, if you are a project manager and wish to enjoy a smooth workflow, put some efforts regarding employee engagement. As far as employee satisfaction score is concerned, you can calculate it by using the following formula:
|Employee Satisfaction Score = (Total Survey Point Score / Total Questions) x 100
5. Cost Variance
For measuring project success, you must keep cost variance in check. It is project management KPI that shows the difference between the planned project budget and actual costs spent within a specific time period.
Cost variance will be negative if there is a budget overrun or vice versa. Calculate CV by this formula:
|Cost Variance (CV) = Budgeted Cost of Work – Actual Cost of Work
6. Schedule Variance
Having an unquenchable thirst for success is vital for project managers, as that’s the way to live up to clients’ expectations.
For the project success, it is imperative to do work as per the set schedule, because there will be a notable drop in productivity levels if you struggle in doing that. At this juncture, the salience of schedule variance, a crucial project management performance metric, soars.
It depicts whether you are ahead or behind the schedule while handling projects. To calculate schedule variance, use this formula:
|Schedule Variance (SV) = Budgeted Cost of Work Performed – Budgeted Cost of Work Scheduled
7. Customer Satisfaction
Businesses appreciate the hard work of their project managers when they get positive feedback from clients regarding delivered results. It shouldn’t be surprising because the existence of companies of all sizes revolves around the happiness of their customers and clients.
As far as projects are concerned, your clients are your customers. So, you must measure the CSAT score to understand the prospects of your business. Here’s the formula you can use:
|Customer Satisfaction Score = (Total Survey Point Score / Total Questions) x 100
8. Actual Cost
It is self-explanatory. Actual cost, a project management metric, sheds light on how much money you have spent by now on a specific project.
It is significant to calculate the actual cost because if you don’t monitor this metric, you are likely to come across the trouble of budget overrun. As we know, it isn’t good for your business’s overall health.
Formula to calculate the actual cost of the project:
|Actual Cost (AC) = Total Costs per Time Period x Time Period
9. Cost Performance
Another project management KPI that concerns capital is ‘Cost Performance.’ This metric tells how well you have managed to save money without compromising on the quality factor.
It not only helps you dwindle financial risks but also aids in allocating capital properly. To calculate cost performance, you can apply this formula:
|Cost Performance Index (CPI) = Earned Value / Actual Costs
10. Earned Value
Another project management metric that deserves your attention is ‘Earned Value.’ It shows the value you’ve earned from the money that you’ve shelled out on a project and at a particular time.
For instance, you have a project with a $100,000 budget and 12 months deadline. After the completion of 6 months, you come to know that you’ve completed 40% of the project, instead of 50%. It shows that your earned value is 10% less ($10,000). Now, you know that you’re falling behind, what would you do? Improvise your strategies to avert loss, of course.
That’s how the earned value metric plays a pivotal role in the project life cycle. To calculate EV, use this formula:
|Earned Value (EV) = % of Completed Work / Budget at Completion (BAC)
It takes more than inspiring a team of project executives and thinking about deliverables to become a successful project manager because upper management will judge you on the basis of overall result without giving regard to the challenges you’ve encountered during the project life cycle.
That’s why monitoring project management metrics gets more important. In case you fall short while accomplishing measurable goals, collect yourself, identify the loopholes and brace for success.
I am concluding this writeup with the expectation that you will track the above-mentioned PM metrics to ensure a smoother path during your project management journey 🙂
See you later!
Q. What are the quality metrics in project management?
Well, we have already outlined the top project management metrics. Here’s a quick overview:
- Gross Profit Margin
- Return on Investment (ROI)
- Employee Satisfaction Score
- Cost Variance
- Schedule Variance
- Customer Satisfaction
- Actual Cost
- Cost Performance
- Earned Value
Q. What are the types of metrics?
There are three types of PM metrics:
- Pure project management measurements (Example: Productivity)
- Indicators of project success (Example: Stakeholder satisfaction)
- Indicators of business success (Example: Cost performance)
Q. What management metrics do you use?
Although all the aforementioned project metrics hold significant value, but ones you cannot afford to ignore are:
- Customer Satisfaction
- Cost Performance
- Schedule Variance
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