10 Project Management Success Metrics
Vital to Team Performance
Many companies prefer to have favorable project management techniques to complete the project effectively. But, it is not guaranteed whether the efforts determined by the particular company in regards to project management is effective or not.Peter Drucker once said, “If you can’t measure it, you can’t manage it”. Keeping that in view, it is not an easy technique to know whether the project was a success or a failure without measurement. It always looks for some performance indicators which can calculate the success level of projects. It’s not about to avoid the mistakes, but to implement metrics to your project management which will help to show either the project is a success or a failure. Covid-19 pandemic has forced many businesses to operate from homes. It’s a big challenge for project managers to not only concentrate on the profitability of business during a pandemic but should also help employees working from home in boosting their productivity and team performance.Given below are some of the project management success metrics that a company should follow for the better performance.
1. Customer Satisfaction
Every company needs to meet the customer satisfaction level. Having better satisfaction from the customers can lead the company towards more profitable projects. There are different ways that can be adapted to measure the level of customer satisfaction. For example, results generated from customer surveys, any complaint from a customer, revenue generated from customers, etc. These aspects assist in analyzing how much a customer is satisfied with the performance level of the team.
Customer Satisfaction Score = (Total Survey Point Score / Total Questions) x 100.
2. Return On Investment (ROI)
Every company wants to earn something in return for what it has invested. Return on Investment is that specific technique used to know the profit against every single penny that has been invested in a specific project. Simply a formula can be applied to calculate that return. The best way is to divide the net benefits by the total cost used for the project. Then, multiplying the answer with 100. The final answer will be the return for every amount that was invested in a single project.
ROI = (Net Benefits/Costs) x 100.
What a company is getting as an output in the result of the inputs it has applied is known as productivity. Productivity shows how well a company has used its resources and how capable that company is in regards to working aspects. Without using the productivity metrics, it will be very difficult for the company to know what sort of output it is obtaining against every input they have put in a project.
Productivity = Units of Input/Units of Output.
4. Cost Performance
Cost performance metrics show the efficiency of the cost that is spent on the project. By measuring the cost performance of the project management techniques, the accuracy level of the project budget estimation process can be measured. To measure the cost performance index, the following formula can be used:
CPI = Earned Value/Actual Costs
5. Schedule Performance
The schedule performance metric shows the accuracy of the scheduled maintenance according to the budget. This metric is used to figure out the stats regarding whether the project is running according to the budget which was planned or is it going behind the actual scheduled budget. To find out the schedule performance index, subtract the budget applied on completed work from the budget planned for scheduled work. The negative answer means that the schedule performance is not working according to the actual planning.
Schedule Variance (SV) = Budgeted Cost of Work Performed – Budgeted Cost of Work Scheduled
6. Gross Profit Margin
Gross Profit Margin is another name for a success metric. It could be used, sum up, the numbers that will show either the project completed is a success or a failure. To find the actual result, the total cost is subtracted from total profit and the answer is then divided by 100.
Gross Profit Margin = (Total Profit-Total Costs)/100.
7. Employee Satisfaction
Here the question arises that why employee satisfaction is important in measuring the project management? The answer to this question is that it affects the moral level of the employee. The higher the moral level of the employee is, the higher the chances of project success rate. It can similarly be measured like the customer satisfaction is measured that includes survey reports.
Employee Satisfaction Score = (Total Survey Point Score / Total Questions) x 100
8. Cycle Time
Every project has a life cycle according to which it is completed by passing through different phases. The beginning of the project and its ending is highly dependent on that cycle. The time taken for the completion of that whole life cycle is known as cycle time. The organization can complete more projects by having a shorter cycle of time on every project.
9. Cost of Quality
The cost of quality is highly dependent on the success rate of project management. The cost of quality means the extra sort of expenses that include labor costs, low-quality material costs, etc. These are the type of costs that are more valuable when the services are not up to the mark and that can also affect the cost performance metric as well as the productivity of the organization.
10. Requirements Performance Index (RPI)
The final solution obtained after the project shows the required performance for the project management. It shows the relevancy of the project with the requirements that could be either functional requirements or non-functional requirements.