Project Management Metrics
Project management metrics are the tools used to measure the progress of a project in terms of profitability, cost, and schedule; its success and losses incurred in the course of the execution of a project. The success or failure of a project is dependent on using not just any management metric but the appropriate one. Measurement practices otherwise called metrics have been integrated into projects to support fact-based project selection and decision-making, they also help management know their strength and facilitate better planning. Metrics or Key Performance Indicators (KPIs) can help control costs, improve quality and identify important industry trends.
Construction companies make use of Project management metrics to ascertain the success of a project and it is also invaluable to project managers as it is used in determining a project status, risk prevision and assessing the quality of work done by the workers.
It is essential to employ metrics peculiar to a particular project because the metric that works for, say, project A might not be applicable to project B since both may not have the same goal. Hence, choosing the right metric can be tricky as each project requires its own unique metric which is in turn influenced by the set goals of the proposed projects. These goals must be Specific, Measurable, Attainable, Relevant and Time-based (SMART). Project management metrics can be said to be on both the Macro and Micro scale.
1) On Macro scale:
a. Number of successful projects showing the statistical evidence of completed projects,
b. Percentage of failed projects in the overall projects executed by the management,
c. Time spent per project which includes the operation time, delay times encountered, downtime of equipment and machines etc.
2) On Micro scale:
This project management metrics permits project managers to evaluate how resources are being effectively put to use. Here, the budgeted effort is measured against the total effort since it has an effect on the bottom line. In analyzing the productivity of a project, factors where more attention is needed is made known. For instance, delay in schedule or dogged performance by construction staff and workers posse a negative impact on the productivity metric.
b. Scope of the project
Project scope as a project management metric is typically defined at the initial stage to ensure the project attain the necessary requirement but changes and additions can derail even the best project manager’s efforts. However, it is normal to have some additional changes in the middle of the process but in order to control and keep project on time and budget, monitoring the change requests is required. The sample indicator is the number of change requests.
c. Quality and Satisfaction
This is a customer-focused metric that ensures no problem occur in the whole project execution. This is achieved by delivering a quality result upon completing it in order to eliminate any error. Detecting errors early guides against losing the project focus. The sample indicator for this metric is the total defects fixed per user acceptance test.
The project cost is highly essential for the procurement of materials, services, and resources required for delivering a perfectly executed project. Measuring how costs are being managed in a project often determine the project’s success. Every other metrics such as productivity, quality and scope depends on the cost metric as no project can be done without a budget which in turn is a function of its cost, so any variation would affect the project entirely. Hence, adequate observation of the cost is done to effectively adjust other metrics like scope and still attain desired objectives. Sample indicator here is the cost performance index (CPI) which is the ratio of the earned value to the actual cost.
e. Gross Margin
Most management projects undisputed goal is to maximize profits and this is exactly where this metric comes in. The difference between the total incomes that is achieved after the project is completed and the total costs expended. Higher difference simply implies a better gross margin which is good for the project management. The ability of a project manager to attain these set gross margins or beyond is a great advantage.
Having an effective project schedule goes a long way in determining the outcome of a project. It answers some questions such as when the project starts and ends, vacation days. The schedule is usually measured weekly with the consent of both the manager and stakeholders and is employed to keep track of goals set and met by project manager during each scheduled meeting. This makes delivery time stay on point always. Its sample indicator is the schedule performance index (SPI) and it is expressed as the ratio of earned value to planned value.
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