These days, it’s easy to collect and store immense amounts of data. Many small companies therefore collect much more data than necessary and are subsequently faced with the problem of defining relevant success criteria and making decisions.
If you’re tracking everything, you’re not paying attention to anything: If you’re tracking everything, you’re not really paying attention to any of it.
Gartner shares this thought: “More KPIs and metrics do not necessarily mean better project management. A key performance indicator (KPI) should help measure progress toward a specific goal. If it doesn’t, it’s not worth measuring and tracking.”(Full report available in English for Gartner clients).)
In this guide, we present four project management KPIs and calculation formulas that small and medium-sized enterprises (SMEs) can use to evaluate and improve project performance. With this data, project management can reduce risks such as unexpected cost variances or inaccurate project cost estimates. It will also focus on which software functions are most important to achieve project management goals.
education.telefony-taksi.ru management KPI examples: 4 useful KPIs for small businesses
Exactly which project management KPIs should be tracked depends on your own business objectives. However, some standard performance metrics have proven useful across different industries, such as software development, marketing, and PR.
What is a Key Performance Indicator?
KPIs or. Performance metrics, or project metrics, are specific data points used to measure the success of a project. Key application areas are usually time and budget management, including calculation of planned costs (d. h. of the planned budget) compared to the actual costs incurred.
The four key project management KPIs are as follows:
1. Return on Investment (ROI)
ROI measures the return on an investment and thus helps to quantify the project value.
Small businesses can use this project KPI to compare the expected return on different types of projects. This information helps decide which projects in the portfolio to prioritize in the short term and which types of initiatives to fund in the future.
The following formula is used to calculate a project’s ROI:
Calculation: ROI = (profit from investment minus cost of investment) divided by cost of investment
Factors such as travel costs, budgets of various departments, and wages should be considered when determining investment costs.
As an example, here are some common benefits and costs of investing in new project management softwre to help with the ROI calculation:
2. Cost Performance Index (CPI)
The CPI (cost performance index) shows how efficiently the project budget is used.
This provides a better understanding of the actual costs associated with a project. In addition, the data provides a basis for forecasting future performance, which in turn helps to better allocate funds to projects.
Calculation: CPI = Earned Value (EV) / Actual Cost (AC)
If the result is a number greater than one, the project can be expected to come in under the estimated cost at completion. However, if the result is less than one, the budget is likely to be exceeded.
3. Schedule Performance Index (SPI)
The SPI (planned performance index) shows how successfully a project’s schedule is being met.
Small businesses can use this project management metric to determine how quickly the project team is working and more accurately plan future projects based on these real-world performance indicators.
This is especially helpful for companies when bidding on projects, as they can confidently say, “Our project team is working at this speed, and we can get this amount of work done in the time allotted.”
Calculation: SPI = Earned Value (EV) / Planned Value (PV)
Calculation of SPI as a project management KPI If the result is a number greater than one, the project can be expected to be completed before the targeted deadline. However, if the score is less than one, progress is too slow and the project is likely to be completed late.
4. Resource capacity
It is easy to overestimate the availability of employees. This can have disastrous effects on project success and overall portfolio management.
Functional and project managers can use this metric to see how many full-time employees are available to work on projects. They can then allocate resources to projects based on project priority.
Calculation: Resource Capacity = (Number of People) (Availability)
Resource capacity is calculated by multiplying the number of available workers by the amount of time they have available to work on projects. It is important to remember that employees can realistically devote less than 50% of their workday to projects.
Using project management KPIs to measure project performance
Start with a project management performance strategy that ” S.M.A.R.T.” is, i.e., specific, measurable, accepted, realistic and timed. This includes the following steps:
Pay attention to consistency. KPIs show trends over time. Therefore, it is important to establish a consistent set of metrics to measure performance across multiple similar projects (including, if applicable. aborted projects).
Expert tip: KPIs must not only be “measurable”, but also “manageable”. Realistically, three to five performance indicators can be tracked simultaneously.
If there are more, projects cannot be effectively improved or transformations driven because there are simply too many factors at play and conclusive analysis becomes difficult.
Find project management software with the right features
Compare different tools you can use to measure project management KPIs and monitor project success, paying attention to the following features:
Visualize key project paths (often using
), identify key milestones, show dependencies and constraints, and assign tasks to the team. Establish baselines for project scope, budget, and schedule.
How to proceed? Have a look at our project management software directory to find the right tool for you.
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