Project management KPIs, or key performance indicators, are metrics used to track and measure the progress and success of a project. There is no one-size-fits-all list of KPIs, as the most important measures will vary depending on the type of project and the organization’s specific goals. However, some key measures are essential for any project manager to track.
This article will discuss some of the most essential project management KPIs, what they measure, and how to use them to improve your projects. We’ll also look at some tools and templates you can use to help you track these metrics.
What are Project Management KPIs?
A project management KPI, or key performance indicator, is a metric used to measure a project or a project manager’s performance. While many different KPIs can be used to assess the manager’s or the project’s overall performance, some of the most crucial include project completion rate, on-time delivery rate, and customer satisfaction. By tracking KPIs, organizations can ensure that they are getting the most out of their project managers and that their projects are on track for success.
Why is it essential to track Project Management KPIs?
Project management KPIs provide critical insights into whether a project is on track to achieve its objectives. By tracking KPIs, project managers can identify problems early and take corrective action to get the project back on track. Tracking project-related KPIs is essential to ensuring that all projects throughout the company are completed on time and within budget. Without these KPIs, it would be difficult to know whether a project is encountering problems or making progress, so transparency is another important factor to consider.
Overview of the most critical Strategic Management KPIs
- On-Time Completion %
- Milestones on Time %
- Estimate to Project Completion
- Adjustments To Schedule
- Planned vs. Actual Hours
- Resource Capacity %
- Budget Variance (Planned vs. Actual)
- Budget Iterations
- Planned Value
- Net Promoter Score
- Number of Errors
- Customer Complaints
- Change Requests
- Billable Utilization
- Return On Investment (ROI)
Explanation of 22 important Project Management KPIs
On-Time Completion %
The On-Time Completion % is an essential metric in project management. It’s a simple calculation: the number of tasks completed on time divided by the total number of functions in the project. This metric tells you how well your team is performing and allows you to identify problem areas early on. If your On-Time Completion % is low, it could be because your team is not scheduling enough time for tasks or because they’re not prioritizing correctly. Whatever the reason, low On-Time Completion % is a red flag that should be addressed ASAP. By tracking this metric closely, you can ensure that your projects are on track and avoid costly delays.
Milestones on Time %
As a project manager, one of the most important things you can do is ensure that milestones are hit on time. A milestone is a significant event or achievement in a project, and hitting it on time is crucial to the success of the project. There are several ways to measure whether or not milestones are being hit on time, but one of the most important is the percentage of time they are hit. This is known as the milestone on-time percentage or MOTP. The MOTP is the percentage of milestones hit within their specified timeframe. For example, if you have a project with 10 milestones and you hit 9 of them on time, your MOTP would be 90%.
Estimate to Project Completion
A project’s estimated time of completion (EPC) is one of the most critical metrics for project managers. After all, finishing a project on time and within budget is the ultimate goal. The EPC can be affected by many factors, including scope creep, vendor delays, and unexpected obstacles. However, tracking a project’s EPC as a key performance indicator (KPI) is still valid. By monitoring the EPC, project managers can identify potential problems early and take steps to get the project back on track. In addition, the EPC can help managers to assess whether a project is likely to finish on time and within budget. As a result, the EPC is an essential metric for any project manager to keep an eye on.
Adjustments To Schedule
Adjustments to the schedule are often required to deliver a successful project on time, on scope, and on budget. As such, schedule adjustments should be considered a key performance indicator (KPI) in project management. By tracking how often and how significantly the schedule needs to be adjusted, project managers can get a better sense of how well the project is progressing and whether or not it is likely to meet its original targets. In addition, regular schedule adjustments can help to identify potential problems early on before they have a chance to cause significant delays. By tracking schedule adjustments as a KPI, project managers can ensure that their projects are on track and that any potential problems are quickly addressed.
Planned vs. Actual Hours
One of the most critical aspects of project management is ensuring that the project stays on schedule. To do this, project managers often rely on a metric called “planned vs. actual hours.” This metric compares the number of hours planned for the project with the number of hours spent on the project. If the actual hours are lower than planned, the project is ahead of schedule. The project is behind schedule if the actual hours are higher than the planned hours.
The planned vs. actual hours metric can be a useful tool for project managers, but it is not without its drawbacks. One problem is that it can be difficult to estimate how long a project will take to complete accurately. As a result, the planned vs. actual hours metric may not always accurately indicate a project’s progress. Additionally, this metric does not consider any changes that may have been made to the project’s scope during its execution. For example, if a project is initially slated to take 20 hours but ends up taking 30 hours due to scope creep, the actual hours will still be higher than the planned hours even though the project was completed on time.
Despite these drawbacks, the planned vs. actual hours metric can still be a helpful tool for project managers. When used correctly, it can provide valuable insights into a project’s progress and help to keep projects on track.
Resource Capacity %
Resource capacity measures how much work can be done by a team or individual within a specific timeframe. Resource capacity is typically expressed as a percentage of total available time. For example, if a team has eight hours of available time each day and the resource capacity is 80%, the team can perform up to six hours of work each day. Several factors can affect resource capacity, including absenteeism, turnover, training, and skillset. By tracking resource capacity, project managers can identify areas where productivity is low and take steps to improve it. In addition, resource capacity can help project managers to make better use of their teams’ time and talents, ensuring that projects are completed on time and within budget.
Budget Variance (Planned vs. Actual)
Budget variance is the difference between the planned budget for a project and the actual amount spent. A positive budget variance indicates that the project came in under budget, while a negative variance suggests that more money was spent than was initially planned.
Budget variance can be a useful tool for assessing project success because it clearly shows how well the project was managed. If a project has a high budget variance, it may be an indication that the project manager did not do a good job of estimating costs or controlling spending. On the other hand, a low budget variance may indicate that the project manager did a good job of keeping costs under control. Budget variance is one metric that should be considered when assessing project success. However, it can be a helpful indicator of how well a project is being managed.
Budget iteration measures the number of times that the budget for a project has been revised. A high budget iteration count can indicate poor planning, unrealistic expectations, or scope creep. It can also signify that the project is in danger of going over budget. Therefore, the budget iteration count is an important metric to track during the life cycle of a project. By monitoring this KPI, project managers can identify potential problems early and take corrective action to keep the project on track.
Progress can be measured in several ways, but one of the most common is using Planned Value (PV) as a key performance indicator (KPI). PV is simply the sum of all the planned costs for each activity in the project. Tracking PV provides a clear picture of whether the project is on track in terms of cost and schedule. If PV is tracking below the actual cost, the project is behind schedule and/or over budget. Conversely, if PV is tracking above the actual cost, the project is ahead of schedule and/or under budget. Either way, PV provides valuable information for managing a project.
Net Promoter Score (NPS)
The NPS is a measure of customer satisfaction that can be used to gauge the success of a project. The NPS can be a beneficial KPI in project management because it’s a direct measure of customer satisfaction. It’s also relatively easy to calculate and can provide valuable insights into how well a project meets customer needs.
The NPS measures customer satisfaction by asking customers how likely they are to recommend a product or service to a friend or colleague. The score is calculated by subtracting the percentage of people who are “detractors” from the percentage of people who are “promoters.” The resulting number can range from -100 to 100, and the higher the score, the more satisfied customers are.
Number of Errors
One standard KPI is the number of errors made during a project. However, it is essential to use caution when interpreting this metric, as a high error rate can sometimes be due to factors beyond the project manager’s control. For example, if a project requires complex tasks that are new to the team, it is not realistic to expect zero errors. In such cases, it may be more meaningful to track the number of errors relative to the total number of tasks completed. By taking into account the difficulty of the task at hand, this metric can provide a more accurate assessment of project progress.
Complaints are an important metric to track in project management, similar to Net Promoter Score it is often an overlooked KPI. By understanding customer (Internal stakeholders or external) complaints, you can get invaluable insights into areas where your project is falling short. Additionally, tracking complaints can help you identify issues early on before they cause major problems. Of course, not all complaints are created equal. Some may be more serious than others, and some may be simply nitpicky. However, all complaints should be taken seriously and addressed promptly. By tracking customer complaints, you can ensure that your project stays on track and provides the best possible experience for your customers.
No matter how much planning and preparation go into a project, there will always be unexpected challenges and obstacles to overcome. As a result, change requests are an inevitable part of the project management process. While some changes can be handled internally, others may require external approvals. In either case, it is essential to track change requests and use them as a key performance indicator (KPI). By doing so, project managers can keep tabs on the project’s overall health and identify any potential bottlenecks. Additionally, change requests can provide valuable insights into the team’s ability to adapt and respond to unexpected challenges. As such, they should be considered in any project management plan.
“Billable Utilization” is a metric used to track the percentage of an employee’s time spent working on tasks that generate revenue for the company. In project-based industries, such as architecture, consulting, or engineering, billable utilization is often used to gauge employees’ productivity and ensure that projects are completed promptly and efficiently. Project managers can identify trends and adjust their practices by tracking billable utilization over time. When used in conjunction with other KPIs, such as customer satisfaction or project profitability, billable utilization can be an effective way to measure the overall success of a project management team.
Return On Investment (ROI)
Return on investment, or ROI, is a key performance indicator often used in project management for products or revenue generating projects. It is a measure of the profit or savings generated by a project compared to the cost of the project. For example, if a project costs $100 and generates $120 in revenue, the ROI would be 20%. ROI can be used to compare different projects and assess a project’s financial performance over time. For example, if a project has a five-year timeframe, ROI can be used to compare the project’s performance at the end of each year. Additionally, ROI can be used to assess the financial impact of changes to a project, such as a scope creep or delays. By understanding the ROI of a project, managers can make more informed decisions about how to allocate resources and which projects are likely to be most successful.