Sometimes the best-managed projects fall apart because they were not working towards specific and measurable goals. Or they were working with too broad or too narrow objectives that did not work within their larger vision. As such, markers of performance, or KPIs, become integral in assessing the progress and successes of a project, keeping the goals aligned to the larger company as well as establishing criteria for success.
In this blog, you will learn:
What are KPIs or Key Performance Indicators?
A KPI is a type of performance measurement. Effectively, KPI metrics evaluate the success of an organization, project, product, idea, or initiative. The way they work is that a project manager, company, or client decides on certain key objectives that need to be met at the end of whichever project is in question. To evaluate the performance of the project on a constant and cyclical basis, certain measures of performance are set up that work towards those key objectives. And then, at reaching targets, a company or project manager can evaluate their performance using the measures in place to quantify the project’s performance. And these measures are called Key Performance Indicators, or KPIs.
Role of KPIs in Project Management
In talking specifically about project management, KPIs are one of the most important measures of success adopted by managers and clients. As KPIs are outcome-oriented and rely on certain factors that go into meeting the set targets. These factors include, but are not limited to.
These factors are popular because these are typical considerations for managers when they think of what counts as success for the project. For instance, deadlines for delivery, revenue and expenditure, product quality, or the efficiency of the workforce, all fall under these larger categories as well as common objectives for a project. KPI metrics can help track the progress of individual elements within each of these categories to ensure that a project is on track and is actively working towards meeting its targets.
Selecting the Right KPI Metrics for your Project
Too often we see projects using stale and irrelevant KPIs for their projects that do not have any relation to their larger goals, or even their process. In that instance, KPIs become another pointless statistic on an already extensive sheet of numbers. To make the most of KPI metrics and ensure that they are utilized to assess and support your project, here are some ways to select the right KPI metrics for your project kickoff.
Define your project or business process
Before identifying your KPIs, define your structural, organizational, and related processes before assessing for metrics that can track your performance.
Have specific requirements for the business process
Once you have established in clear terms what your business or project process is, identify the areas that need attention, be it in terms of resources, technology, or specific targets. If you do not understand the requirements of your project, it becomes impossible to set performance measures for abstract ideas. In essence, do rigorous project planning.
Quantify your measurements and have set goals
Work with absolute and quantifiable values. For instance, if you are in the process of acquiring customers, a specific goal could be reducing the cost of customer acquisition by 20%. When setting up indicators of performance, always have a set goal with a measurable value to compare against. Using the SMART methodology (Specific, Measurable, Attainable, Relevant, Time-bound) to set goals and performance measures is always preferable.
Be flexible to change and actively identify variances and contradictions
Be prepared for contradictions, variances, and unexplained differences. Understand that these metrics are merely reflecting the larger processes of your project. And so, be flexible and ready to modify your resource management, workflows, or overhaul entire processes to reach your goals faster and more effectively.
Important KPIs for Every Project Manager
1. Budgeted Cost of Work Scheduled or Planned Value
BCWS or PV is the estimated and planned value of the tasks left to be performed at each periodic evaluation of this specific KPI. In effect, it is the planned budget or cost of the rest of the project.
Source: Planned Vs Actual Costs by SlideUpLift
2. Actual Cost
AC is the expenditure incurred in the project as of the date of evaluation. This value is often in conjunction with the planned cost to note if the project has remained within budget.
Source: Actual Costs Template by SlideUpLift
3. Cost Performance Index
CPI is the comparison between the budgeted cost and the actual cost of the project so far. This is a measure of efficiency, both in terms of time and money. It is also done to set future budgets and to inform decisions about the Budgeted Cost of Work Scheduled.
Source: Cost Performance Index by SlideUpLift
4. Planned Hours vs Actual Hours
This KPI looks at the initial plan in terms of the number of hours estimated for a project, and meeting specific targets within that, and compares that to the actual amount of time spent on the project so far. It suggests that in case the planned hours were greater than the actual time spent, the project is working ahead of schedule. Contrarily, having greater actual hours versus planned hours suggests that there is an issue with the allocation of resources or time management within the project, due to which it is now behind schedule.
Source: Planned Vs Actual Hours by SlideUpLift
5. On-Time Completion Percentage
Most projects don’t work on a Waterfall system of management anymore. This means that smaller tasks are worked on simultaneously in a team, and each task has its own scheduled date of completion. The On-Time Completion Percentage looks at the percentage of tasks that were finished within their deadlines. This can be used to contextualize the previous KPI, as a low percentage suggests structural issues at the level of assignments and tasks within the team.
Source: Project Status Template by SlideUpLift
6. Schedule Performance Index
SPI is a KPI that looks at the overall project and presents a value close to 1 to indicate if a project is on schedule or ahead or behind the planned schedule. Less than 1, the project is likely behind schedule and modifications need to be made in the time management side of the project. Greater than 1, and the project is ahead of schedule. And 1 is, of course, the project is right on the planned schedule.
Source: Schedule Performance Index by SlideUpLift
7. Employee Churn Rate
This is the rate at which employees are leaving the project or the company. A high churn rate reflects poor working conditions with mismanagement and a hostile work environment. In that case, an overhaul is usually needed in terms of the functioning of a project as a high churn rate slows down the progress of any task and is generally detrimental to a company’s functioning. A low churn rate reflects employee satisfaction and good management within the project.
Source: Churn Analysis Template by SlideUpLift
8. Return on Investment
ROI is perhaps the broadest KPI on this list. That is because it looks at a project in its entirety, and works out its worth (or, profitability) in relation to its cost. As such, it is a measure of the benefits gained from a project versus the resources used within it. ROI is usually a long-term metric and initially does not reflect positively on most projects. However, using ROIs even before a project starts can be beneficial as it can reflect the future profitability of a project, or be used to decide on an idea with the greatest potential ROIs.
Source: Return On Investment by SlideUpLift
However, using ROIs even before a project starts can be beneficial as it can reflect the future profitability of a project, or be used to decide on an idea with the greatest potential ROIs.
SlideUpLift Presentation Templates for Presenting KPIs
One of the best methods to show KPIs is by using a dashboard. A dashboard is basically a slide consisting of multiple gauges and charts, reflecting all the important KPIs employed in the measurement of performance for a project.
In presenting KPIs and a KPI Dashboard, the easiest and most effective way is to use pre-made presentation templates that have been created to cater to all KPI metrics and project management requirements. Crafted by experts in the field, these presentation slides can be used to showcase your project’s performance to any audience. Each template is fully customizable, visually engaging, and creatively showcases the numbers that need to be presented. A few examples for your reference:
Source: Sales Dashboard by SlideUpLift
Source: Email Campaign Dashboard by SlideUpLift
Source: Project KPI Dashboard by SlideUpLift
KPIs work great in evaluating and assessing the successes of a project. They provide quantified information and clear markers of progress and areas of improvement for project managers and stakeholders. However, it is important to tailor specific KPI metrics for your project, ones that reflect the ethos, vision, and larger objectives of your organization and the project. But once you have your KPIs in place, project managers can expect better results and greater standards, culminating in a resounding success of your project.
To showcase the detailed KPI Metrics review of a project check out the Project Status Review Deck
Source: Project Status Review Deck by SlideUpLift
Now you don’t have to scour the web to find out the right templates. Download our PowerPoint Templates from within PowerPoint. See how?