Much like a GPS plans the best route to guide you to your destination, KPIs help project managers stay on track for successful completion. It’s no secret that projects are made up of many moving parts, and these parts need to be monitored in order to establish the health of the project at any stage.
Successful, in-budget project completion is still a mammoth task for many organizations. In fact, according to a study by KPMG, 70 percent of organizations experienced at least one project failure in the prior 12 months, and 50 percent of respondents in the same study revealed that their projects have not consistently achieved their pre-set goals.
So, using KPIs to help reduce the amount of project failures and setbacks seems like a no-brainer for project teams. And while there are many KPIs that differ in their importance to teams with different goals, there are some indicators that can be applied universally to maximize efficiency and productivity in project management.
With new project management software that’s enhanced with Artificial Intelligence (AI) and Machine Learning (ML) capabilities, teams can be more prepared than ever before by receiving reports in real time on a range of KPIs, from schedule performance to project profitability. Let’s take a look at the questions that project managers need to be asking, and how the KPIs that are visible through a comprehensive project management software platform can answer them.
Will we hit the deadline?
Project managers can gain a crucial understanding of how on-track the project is to meet its deadlines through reports formed of KPIs on schedule performance. The KPIs that teams should be paying attention to are the EVA (Earned Value Analysis) – specifically the SPI (Schedule Performance Index) part, and the average time to complete a project and tasks. They should also measure performance trends across the year, giving teams considerable planning capabilities in terms of where they can expect setbacks.
These reports should provide an at-a-glance view of your projects, activities, and milestones, and enable team members to identify risks and trends in schedule performance. Teams can find out whether or not a deadline is likely to be missed by looking at KPIs that use past data to estimate end dates of the activities, tasks, and projects. Getting access to these insights allows teams to channel more resources ahead of time to reduce the risk and impact of a missed deadline.
Will we stay within budget?
Staying within budget is undoubtedly one of the biggest challenges faced by project managers and their teams. Considering the amount of extra expenditure that could be avoided, it’s right to be a top priority: For every $1 billion invested in the U.S., $122 million is wasted due to lacking project performance. Not to mention, according to the Project Management Institute, “organizations that invest in proven project management practices waste 28 times less money,” and on average meet intended goals on time, and on budget, 80 percent of the time.
So, using KPIs on financial performance is essential for teams to stay as on-budget as possible. It’s important to have a report that allows for a comparison of the quoted or budgeted cost with the actual cost, as well as letting the executive team compare financial performance using custom criteria. For example, comparing profitability by project, by team, and by manager would help project managers to discover and resolve inefficiencies in the respective workflows.
A report that can be filtered and aggregated by data points like team, portfolio, or customer, also acts as a KPI that allows teams to identify which projects need attention, which are profiting, and which are facing losses. By hosting all of this data in one financial dashboard, teams can have a central view of the finances of projects, along with the tools to make informed decisions that help them understand the financial performance of each field.
How are team members performing and interacting?
Metrics that show team member performance and interaction between individuals and teams can give project managers great insights into process inefficiencies that may be causing setbacks in other areas. By creating a report that filters data on each user along fields like skills and location, project managers can drill down to find potential performance improvements and identify employees that may need coaching or extra support.
Further, a report that shows the average time a task sits at a certain status or stage can help project managers to identify process bottlenecks. For example, a project manager might use these reports and find out that the legal review is usually taking 40 percent longer than it should. This isn’t due to inefficiencies in the legal team, but rather because the sales team is not providing all of the necessary information in one step — forcing legal to repeatedly go back to sales to get all of the details they need. User actions and performance are great metrics to do a deep dive into processes and identify those types of bottlenecks.
It’s also helpful to have a report that lists all actions taken by users in one place for project managers to use in case of compliance requirements.
So, what should I look for in a project management solution?
It’s essential that project managers choose a solution that provides visibility into all of the information on the projects in one place, despite having come from various sources. Oftentimes more rudimentary project management platforms are not enough to gather all the data and insights that project managers need in one place, so a platform that captures all of the information from multiple sources and compiles it into a single dashboard is essential.
AI and ML-powered solutions give teams full visibility into project performance and predictive capabilities that allow them to anticipate bottlenecks, setbacks and delays. In return, these insights allow project managers to act on future problems to avoid snowballing or serious delays down the line.
Yet despite the mounting evidence towards the benefits of such solutions, only 22 percent of organizations surveyed by Wellingtone use a project management software, with only 55 percent having access to real-time KPIs. As a result of this, 50 percent of respondents to the survey report having to spend one or more days to manually collate project reports.
In order to run optimally, it’s undeniable that organizations need to be paying attention to valuable KPIs that can answer crucial questions on timelines, budgets, and team members. Project managers can ensure that projects run as smoothly as possible with enhanced project-wide visibility that translates into predictive capabilities by choosing a modern project management solution that’s enhanced with AI and ML.
Vadim Katcherovski is the Founder and CEO of Project Management software platform, Easy Projects. He has over 20 years of experience in the IT industry and has managed dozens of software development projects. He founded software development company Logic Software in 2000, followed by Easy Projects in 2003, with the aim to enable project managers to create, manage and update projects quickly and easily.