Performance Measurement – Measure what you do
There is an old adage, ‘You cannot manage what you don’t measure!’
Measure, Measure, Measure – That’s the mantra for successful Project Management!
Why should you measure?
You do not know the progress unless it is measured.
The progress can be quantified with numbers and compared with previous results
When reviewing the measurement, it gives a picture of how the expectation is met
Return on Investment [ROI] is one kind of measurement
ROI gives a numerical value to indicate the percentage of return from the investment
ROI differs from business to business
If the ROI is not positive, management can take an decision how to proceed
Is the project is in alignment with the time and budget as planned?
If the result is lagging behind expected output, then management will be able to take a decision on the next direction. They can add more resources to finish in time or extend the project timeline to complete it later.
How to Improve Performance
Management would like to evaluate and monitor the progress and improve the performance of a project. There are many metrics that can be collected and reviewed.
The metrics will help them to evaluate the progress and performance
To improve performance, they can design new processes in place or make changes in the present processes
They create new standard guidelines to follow
The guidelines for all the processes will be helpful in monitoring and controlling the progress
Create a clearly defined Project Charter and follow it meticulously.
Critical Path
There is a critical path that can be identified for any project
The critical path of the project has to be monitored and controlled effectively
The critical path will give a clear picture of the slack time in each project
The Project Manager has to watch the slack time for dependent task completion and make sure the slack is not delaying the project
The slack time can be adjusted and non-dependent tasks can be performed parallel to reduce project timeline
SMART Business Goals
Specific
Measurable
Attainable
Relevant
Time-based
What are metrics of the Project
1. Purpose of the Project
2. Determine critical success factors
3. How to measure critical success factors
4. Base the metrics on critical success factors
Metrics is based on critical success factors
Following are critical success factors (CSF)
1. Benefits resulting from the capability delivered by a project
2. Time/Schedule to deliver project output
3. Cost to deliver project output
4. Scope of work to deliver project output
5. Quality of deliverables and quality of process (customer satisfaction)
6. Risks including uncertainty or threats to project success
Critical Success Factor is an element that is necessary to achieve a Goal.
Key Success Factors are
Strategic Focus (Leadership, Manangement, Planning)
People (Personnel, Staff, Learning, Development)
Operations (Processes, Work)
Marketing (Customer Relations, Sales, Responsiveness)
Finances (Assets, Facilities, Equipment)
CSF – are the factors that the company needs to focus to be successful.
Examples: Good Leadership, Employee participation, highly skilled employees, Business profits, cashflow, sales, customer satisfaction, wastage management etc.,
These factors will set out how the company achieves the profit.
Important focus points for Critical Success Factors
CRITICAL SUCCESS FACTORS
- 1. Identification of required Factors
- 2. Working Conditions required
- 3. Performing Tools needed
- 4. Employee Skills preferred
- 5. Training provided
- 6. Leadership
- 7. Employee engagement
KPI – Key Performance Indicators
PROS
These are indicators that measure if the company is successfully running.
This is a metric measured at regualar intervals to monitor how the company is performing
KPI will help understand the business if they are in the right track.
KPI will give the alarm to the management if anything needs attention.
KPIs are measurable metrics that will indicate the performance
The performance improvement can be addressed by the management with these KPIs
KPIs are closely connected to the company goals and strategies
CONS
KPIs give the numeric value of the indicator only.
It doesn’t give how to improve the value
Management has to research and conclude how to use that KPI to improve overall growth
Management has to introduce activities and initiatives to achieve the goal.
CSF and KPI are intertwined
Example: If the CSF is to increase traffic for their blog, they can create a KPI to monitor the number of visitors.
The number of visitors means nothing unless they contribute to the profits
Management has to evaluate the CSF to improve the sales from each visitors
KPI has to be setup for monitoring the profits from each visitors
Similar to this example, the business has to tweek both CSF and KPI to achieve success
