Use Project KPI Library to Improve Performance Analysis- kpi library
In this post, you can ref free useful materials
about kpi library and other materials for kpi library such as kpi tips, kpi
mistakes, kpi examples, kpi templates, kpi dashboard, kpi form, how to create
kpi/performance metrics
If
you need free ebook:
•
List of free 2436 KPIs
•
Top 28 performance appraisal forms
•
11 performance appraisal methods
•
1125 performance review phrases
please
visit: kpi123.com
KPI guides
As the discipline of project management intensively
develops and today serves the key to business success, more and more
organizations realize that extended knowledge of this discipline impacts their
bottom line and exposes improvement areas in cost accounting and performance
analysis. Companies use project performance analysis to discover and fix
financial problems early, accurately account for business costs, and explore
better ways to improve staff productivity. Project KPIs and metrics are used as
the basis for effective business decision making. In order to succeed, each
manager needs to use a project KPI library that makes performance analysis
easier.
Project KPI Definition
What is KPI in project management? It is the way to
track and manage the goals of a project through the definition and measurement
of its progress. By defining project KPIs and metrics executives can take the
guesswork out of decision making and prevent problems early before they occur.
Key performance indicators provide long-term considerations for project success
and warn about actual inefficiencies and possible failures.
Key Performance Indicators are measurable and
observable variables which help executives measure the performance of a project
in critical success areas, such as cost, schedule, budget, personnel, quality,
and more. KPIs demonstrate the progress (or lack of it) towards accomplishing
the project goals and objectives, so that the management team can understand
whether the project is under- or over-performed, or is executed as planned
otherwise.
4 Standards of Project Performance Measurement
Although projects are different their performance can
be measured by common indicators. In general, project performance is evaluated
against preset standards of Cost, Accuracy, Completeness and Speed. In other
words, the KPI library for a typical project lets analyze the following:
Whether the
work is being done within the allocated resources (cost)
The actual
data matches the predictions (accuracy)
There’s
nothing more to be delivered or accomplished by the project (completeness)
The best result
under the given constraints is achieved in the fastest way (speed)
4 standards of KPI Measurement
If at least one of these standards is not followed the
project is likely to be improperly performed, and there’s a higher probability
of severe losses or outright failure.
Organize Performance Measures into a Single Collection
Each of the 4 standards defines collections of
specific performance measures and metrics. For example, cost-related KPIs are
those measures that help analyze and calculate the cost, availability and use
of resources, such as money, labor, time, technology, and so on.
Completeness-related KPIs help compare the actual progress against the plan to
identify what amount of work is done and what tasks and objectives remain
incomplete.
There can be multiple key performance indicators for a
given project. For example, we can start with 10 KPIs for measuring the
performance of a project managed under the principles of the PMBOK Guide. Why
10? Because there are the ten knowledge areas (Integration Management, Scope
Management, Time Management etc.) that need to be analyzed and evaluated. We
can even deepen our performance analysis by adding more indicators for each of
the areas, and then we will end up with 50 and more measures.
In order to make it easier to navigate between
multiple project KPIs, it’s recommended to organize all performance measures
into a single library or collection. A KPI library provides you with instant
access to legacy and new metrics. Everything that you’ve learned from measuring
the performance of your previous projects as well as the insights into the
performance of your current and future projects can be stored and organized in
such a library. One thing you must remember about collecting KPI data is that
your library should be small and easy to navigate. Apparently, you should use
project management software for that purpose.
Keep Your KPI Library Small and “SMART”
The purpose of measuring performance is to recognize
the current state of a project, so that it becomes easier to figure out what
achievements are made and what issues remain unsolved. You can create a project
KPI collection with multiple items in it to measure performance. However, it’s
important to note that your library shouldn’t be too large. 100 strategic KPIs
are too much for a single library, 15 measures can be effective, and 3-5 items
are optimal.
You should keep your KPIs “SMART”, which means
Specific, Measurable, Achievable, Relevant and Time-Scaled. “SMART” is a
popular goal setting technique, and because key performance indicators are
considered goals this technique can be used to optimize your KPI set.
Smart Project Performance Indicators
For example,
your marketing campaign has the following goal: “Increase return on investment
to 35% by year-end 2013 by improving customer satisfaction”. This goal is
specific as it tells you exactly what to attain and till what deadline. “Return
on Investment” or ROI is a financial KPI that can be calculated as follows:
(Expected Revenue – Actual Investment) / (Actual Investment). ROI is measured
over a certain time period and represents the revenue and investment relevant
to the current campaign. By measuring ROI you determine the success or failure
of your project.
Project Management KPI Examples
As a rule, the responsibility for defining project
KPIs and measuring performance is assigned to business analysts (BA). A BA
agrees on the items of KPI library with the senior management and keeps track
of project progress. Here are 20 KPI examples a BA can select to measure
project performance:
- Stakeholder Satisfaction Index
- Requirements Satisfaction index
- User Satisfaction Index
- Deviation of planned budget
- Deviation of planned ROI
- Deviation of net present value
- Staff Productivity Increase %
- Cycle Time Reduction %
- Deviation of planned ROI
- Cost of managing processes
- % (and number) of milestones missed
- % (and number) of overdue tasks
- % (and number) of tasks on time
- Budgeted Cost of Work Scheduled (BCWS)
- Cost Performance Index (CPI)
- Estimate at Completion (EAC)
- Cost Schedule Index (CSI)
- Cost Variance (CV)
- Schedule Variance (SV)
- Schedule Performance Index (SPI)
Create KPI Dashboards in Project Management Software
Key performance indicators provide some critical
information. Ideally this information should be perceived by decision makers as
soon so possible so that the right solution could be found early. By using
project management software managers can create dashboards to visualize project
KPI data. A KPI dashboard provides a graphical view of project progress by
using spreadsheets, charts and diagrams.
KPI Dashboard Example at ProjectManager.com Software
Perhaps, creating KPI dashboards in MS Excel is the
simplest and most popular solution among business analysts and project
managers. MS Excel makes it easy to enter performance data in multiple
spreadsheets, build graphs, and analyze project progress. Another example is
ProjectManager.com, which is a professional online project management program.
It lets create a dashboard with multiple graphs on it. Bar, Pie, Radar, Area,
Line and other types of chart are available for use. This online solution also
allows you to create custom KPI dashboards. One more worthwhile example is
CentriQS desktop software that lets create and customize KPI dashboards in a
single database. In CentriQS you can customize almost everything for your own.
What is a Key Performance Indicator (KPI)
How to Develop Key Performance Indicators (KPIs)
