It is very easy to see project management as just supervising people to complete a project’s tasks. However, project management is broader.
Successful project managers must always be alert and pay full attention to details. This guarantees that the project stays on course and accomplishes its goals. The right project management key performance indicators (KPIs) are essential to gauge project success and to identify trouble spots early. Therefore, in this article, we will take a closer look at KPIs that assist project managers in making smart choices, monitoring progress, and ultimately ensuring the success of the project.
1. Schedule Performance Index (SPI)
SPI measures the efficiency of project scheduling. SPI compares the planned value (PV) to the earned value (EV). The EV represents the finished work. The PV is the planned work. An SPI value of 1 indicates your project is on schedule, while values greater than 1 indicate better-than-planned performance. Also, SPI values less than 1 indicate delays or inefficiencies.
2. Cost Performance Index (CPI)
CPI helps determine projects’ cost-effectiveness. You have to weigh the EV against the actual costs (AC) to get the value. As a project manager monitoring CPI helps project managers track expenses, identify budget deviations, and minimize costs.
The value of CPI is very significant. A CPI value of 1 tells the team that the project is on budget. Values above 1 indicate better-than-planned cost performance. Values below 1 indicate cost overruns.
3. Planned Value (PV)
PV indicates the authorized budget allocated to work that must be finished within a certain period. PV acts as a benchmark for contrasting actual development with anticipated improvement. By monitoring PV, project managers can assess the project’s progress in relation to the set milestones and adjust resource allocation appropriately.
4. Earned Value (EV)
EV quantifies the worth of work completed at a specific moment. It serves as a representation of the actual progress done. Additionally, it offers an honest evaluation of how far along the project is.
5. Variance Analysis
Comparing actual project performance to projected performance is the goal of variance analysis. Schedule Variance (SV) and Cost Variance (CV) are critical variance analyses. SV calculates the difference between earned value (EV) and planned value (PV). CV gauges the discrepancy between earned value (EV) and actual cost (AC). This tells the manager if the project is under or over budget. Positive SV and CV values signify successful project performance. Alternatively, negative values show deviations that need attention.
6. Defect Density
The defect density of a project is the ratio of the total number of faults found during testing and quality assurance to the total project volume. It’s a measure of how well the quality management methods on the project are working. Keeping tabs on the prevalence of defects allows project managers to pinpoint trouble spots and quickly deploy fixes.
7. Customer Satisfaction
Customer satisfaction is a qualitative indicator that tells the degree to which the project satisfies its stakeholders’ and end-users’ needs and expectations. Project managers can measure this metric through feedback, surveys, and testimonies filled by satisfied customers. It sheds light on how well the initiative met stakeholders’ expectations and delivered value.
Conclusion
There are many more KPIs to look out for. These KPIs let project managers and teams see how well or poorly their projects are doing, make data-driven choices, and make adjustments. Project managers who carefully watch and analyze any of the key metrics and KPIs mentioned above can proactively identify risks, bottlenecks, and places for improvement. Smashing goals, deadlines, and stakeholder expectations indicate a project’s success. Fortunately, these metrics will help.
