When you manage a project, you must always keep an eye on the deadlines, the budget, the scope of the project and the quality of the work that is carried out. Thus, to know where you are in the accomplishment of your project, it is essential to use KPIs (Key Performance Indicators).
You can compare the management of a project to the driving of a car, you cannot do without the dashboard and its many indicators to move smoothly and safely to your destination:
- The tachometer to know when to change gear.
- The speedometer to know what speed you are going.
- The fuel gauge showing you if you have enough petrol to reach your destination.
- The various warning lights ensuring that your vehicle is operating correctly
These on-board instruments let you know that you will arrive at your destination safely. It’s the same with KPIs for managing your projects.
What you need to know about the performance indicators of a project.
As the name suggests, a performance indicator helps you to evaluate the performances within your project. It allows you to know where you are in achieving your objectives, what are the parts that you are succeeding at and those that you are having difficulty with.
KPI’s facilitate the direction of a project because they give you a quick overview of the project at any given moment. In effect, each KPI provides you with precise information that allows you to assess a situation at a given time and make an appropriate decision.
To use KPI’s effectively, remember that an indicator:
- Must be associated with a specific objective.
- Must be realistic, measurable and defined within a time period.
- Involves a decision (even if that decision is not to act).
- Is never redundant
- Must be simple and understood by everyone.
Choose your own indicators with your team and the people involved with the project (clients, suppliers, etc.) from the start of the project.
There are four different KPI categories:
- Cost indicators allow you to prevent your project from surpassing the allocated budget.
- Deadline indicators are critical for checking that the project respects its deadlines and nothing is late.
- Quality indicators help you to ensure that work is being done to a high quality.
- Project effectiveness and progress indicators let you know if you are managing the project effectively, if budget, resources, and time are being used well, and if the project is progressing well.
14 KPI’s to measure the progress of your project
Discover 14 KPI’s split into categories to help you better manage your projects.
- Actual Cost: calculation of the real cost of the project. It is measured by adding up all current project expenses.
- Unplanned Costs: This deals with the total of spending that was carried out but not initially planned for the project.
- Cost of Delay: This KPI allows you to know your cost of delay. It is calculated by adding up the additional expenses related to delays such as overtime labour costs, maintenance, troubleshooting, etc.
- Overspend: Calculated through the difference between the actual cost of the project and its initial planned cost. Calculation: (actual cost – planned cost) / planned cost.
- Taux de retard : This KPI allows you to know the percentage of tasks completed late compared to the inital forecast of the project. Equation: (tasks not completed / expected tasks) X 100
- Duration of a task: useful for measuring the time necessary for carrying out a task, particularly reoccurring tasks.
- Delays: measure whether a task or milestone is taking longer to complete than you originally planned.
Calculation: (Actual time – planned time) / planned time
- Schedule Deviation : this indicator measures whether you are ahead, on time or behind schedule when starting the project. Calculation: time initially planned – time currently used. A negative result indicates that you still have time to continue with the project.
- Client satisfaction: an excellent indicator of quality that can be measured thanks to a satisfaction questionnaire as well as client or consumer loyalty.
- Number of errors : This KPI indicates the number of instances where you have had to redo a task or rework a certain element of the prokect. The errors have an impact on the budget and on the time frame of the project.
- Clients’ complaints: Just as is the case with Client Satisfaction, these are a good indicator of the quality of the project and the work carried out.
Efficiency and Project Advancement Indicators.
- Rate of advancement: As its name suggests, this KPI allows an analysis of the project’s progresion. Calculation: (completed tasks / predicted number of completed tasks) X 100.
- Number of completed tasks/milestones reached: This acts as a good indicator of a project’s progress.
- Time spent on the project: Throughout the project, compare the working hours already completed against the initially planned hours to see if you and your team are effective. If the amount of time spent is more than expected, you may need to review the estimated time needed to complete the project.
This list of KPI’s is not exhaustive. There are many others and you can even create your own.
Finally, make life easier by using a project management software. You and your team can directly create and update your KPI’s in real time, have a precise view of the the project progression and evaluate your team’s performance as well as that of your project as a whole.