How do you think the best-of-the-breed athletes keep their fitness level at the pinnacle of physical prowess?
Coaching, nutrition, rigorous training, mindset, motivation?
Yes, you’re right.
The above list can go on and on, but there is one very crucial factor without which nothing can help the athlete be an exemplar of fitness.
What’s that?
It’s tracking the fitness metrics & KPIs — heart rate, miles ran, body weight, body fat percentage, weight lifted, reps completed, and whatnot.
IT project management is no different.
In fact, maintaining fitness is like project management, lol.
Anyways, in the IT industry, you need to track a set of project management KPIs & Metrics to successfully sprint to the finish line — project completion & delivery
Umm.. why do you need Project Management KPIs?
Effective project management
82% of the organizations have one or more Project management officers (PMO).
No doubt, they are all good at what they do.
Yet, as per a report,
- 71% of the companies are defaulters when it comes to completing projects on time.
- 57% of the companies are NEVER able to deliver the projects within budget.
- 54% of PMOs don’t even have access to KPIs.
What?
We too reacted the same 😐
First two stats are obvious, no shock there. Without KPIs & metrics tracking, project management is only pain and no gain.
Project management Key Performance Indicators (KPIs) are a way to be aligned with the set project budget, feature requirements, quality expectations, and delivery timeline.
Now you know why IT project stakeholders always root for a PM who deals in Project KPIs & Metrics data over ‘I think’ opinions and biased assumptions.
Awesome project manager
Besides, tracking project management KPIs & metrics enables you to be that awesome project manager who everybody loves — esp your team.
Wondering ‘how’?
Well, you get to know who is overloaded with work and needs a breeze, and who is running slow and needs to get the reps in to take it to the level next. They say, when you care about the team, the team takes care of the rest.
So, buckle up and get ready to strengthen your project management skills 🏋️
Key project management KPIs & Metrics — critical for successful completion of IT projects
People think project management is easy peasy, huh? 😏 If only they ever try managing people, influencing them to get the work done, and yielding results that meet client’s/boss’s expectations 😩.
But thanks to the amazing project management tools, especially the ONES who simplify project management by empowering you & your team to effectively monitor project management KPIs & metrics in real-time.
Let’s take a look at the key project management KPIs which every IT project manager should know as the back of their hand!
1. Cycle Time Project management KPI — time to complete a task
Let’s understand Cycle Time, aka Lead Time Project management KPI with an example —
Peter (your client) requested a new eCommerce feature i.e., ‘Buy now, Pay Later’ into his platform where users can use his marketplace startup to buy products on credit. Now as soon as you accept the scope of work (SoW) for this feature — your cycle time starts and keeps ticking until you deploy the feature to production.
- Cycle Time is one of the most powerful project management KPIs in a PMO’s arsenal.
- It helps you assess the variance between planned & actual cycle time.
- And hence, uncovers the bottlenecks & gaps in project planning & execution.
Just tracking the net cycle time is not of much use to you or any IT project manager. If cycle time is consistently longer than initially planned, you got to find out —
- What’s the roadblock stopping you & your team from timely execution of the planned project — is it the team’s skill, the approach, the budget, the resource availability, prior tech stack, constant change requests, fuzzy requirements documentation, bugs in the code …find the exact reasons.
- Next, you gotta find the what, who, how —
- What’s the potential solution(s) to the identified problem?
- Who is going to fix the identified problem?
- How the person is going to solve the issues? What assistance can be provided to the person for an efficient & timely solution?
In a nutshell, tracking the cycle time helps you keep your projects on track, saves you time and resources, and helps you deliver better results for your clients.
2. Labor Time Project management KPI — deviation from planned billable hours
If you watch/play football, you would know that a striker can not be judged good or bad based on how many goals s/he has done, we also have to take into account — the number of assisted goals, the ratio of attempted/successful goals, etc.
The same goes for Project Management KPIs.
Here, two is better than one.
While tacking Cycle Time Project management KPI can uncover flaws in the execution process, labor time can help highlight the exact challenge — no finger-pointing & blame game.
But what’s Labor Time Project Management KPI?
Well, it’s a sum total of individual hours invested by the members working on a task.
For example, for a dummy eCommerce feature development, let’s say — you assigned a designer, a developer, a quality assurance engineer, a project manager, and a technical writer. Now, if each one of these worked 20 hours each to deliver the newly requested feature, then the Labor Time for the feature is 100 hours.
Okay, but how is this Project management KPI beneficial for the project?
Hmmm.. interesting one 🙂
Let’s say,
Case I: The planned billable hours for the above feature was 80 hours. But your team took 100. So, that means, if you don’t bill for extra 20 hours, you are bleeding your accounts team 😀
Also, if you see this KPI from a different lens, you’ll be able to spot the reason behind the deviation from planned hours, and maybe a fix as well.
If the Cycle time for this feature was as per the plan, you need to skill up the team a little to finish tasks in a more efficient manner.
Case II: Let’s say, the planned Labor Time is as estimated but Cycle Time is longer. In this case, maybe there are a lot of unnecessary red ribbon processes involved in the project execution which is delaying the work. See, if the paperwork & approval permissions can be trimmed or chopped out of the Project.
Again, task-level Labor Time Project Management KPI helps you keep a tab on things that might delay the project as a whole.
3. Tasks Completed Project management KPI — speed is good
If you want to track the health of your project then Project management KPIs like Tasks Completed & Backlog (a list of features/tasks to be developed) could be a good start.
Tasks Completed KPI reflects the pace at which your team is crossing the checklist items on the project’s features requirements list. It signals if you’re on the planned project trajectory in terms of timeline & feature releases.
The backlog is a list of to-be-completed feature items from the project requirements list or Scope of Work (SoW).
To optimize the benefits of tracking tasks completed and backlog KPIs, it’s important to track them in combination with other project management KPIs — like lead time, work in progress (WIP), and defect rate, …
For example,
- A good task completion rate but excess lead time may mean slow project execution speed.
- A lagging task completion rate with a high number of items in WIP may not mean that huge danger, but it is still in the vulnerability zone.
- Proper task completion, and proper lead time, but high defect rate — may mean the customer success team is flooded with customer complaints in the near future. Not a healthy sign!
Track task completion project management KPIs, but do look at it in a wider scope to make the most out of it.
4. Budget Variance project management KPIs — slippage & extra costs
Recklessly abusing available organizational resources is never a good idea, esp the project budget.
As mentioned earlier, 57% of organizations are suffering from increased project budgets. This basically interrupts everything, esp for entrepreneurs and enterprises who are on a lean budget.
Let’s say, new product development has been approved at a very lean ‘X’ budget. 30% of the budget is allocated for testing the product-market fit. Now, if for some reason, there is a huge negative variance between the actual & planned project budget then maybe the team won’t get enough budget for the minimal viable product’s (MVP) product-market fit testing — and maybe, a good project with good potential will fall prey to poor project management & planning.
That’s why it is damn important to track money & budget-focused project management KPIs — avoid overspending, and cut costs wherever possible to stop money slippages. Else, the financial health of the project can be critical.
5. Error Rate Project Management KPI — quality matters
Error rate is the ratio of unpleasant surprises that show up in the project to that of expected features.
In a software project, divide the number of “glitchy features” by the total number of ‘features shipped’. Then multiply it by 100, and what you have is the error rate (%). The lower this number, the healthier is your project.
Like other Project Management KPIs, if you look at this one in isolation it may not be that helpful. But if you try evaluating the impact of buggy features shipped on the revenue of the software, the user churn-out rate, the delay in lead time, and the budget slippage due to increased labor time which is allocated to fix the bugs — you’ll get a clear idea on how fatal could be a small percentage of error.
- 39% of people uninstall the app because of technical glitches,
- 44% uninstalls are because the app drains battery surprisingly fast, and
- 32% people uninstall because it is not easy to use (bad UI UX).
Now, imagine how much money an app company would lose if they prioritize user acquisitions over user experience.
A great project manager always looks to optimize the project management KPIs in order to maximize the success odds of the project.
6. Influx rate of Change Requests — the less, the better
Everyone hates this one. Trust me, the client too.
But change requests are an integral part of any IT project.
That doesn’t mean you need to accept all the incoming change requests. If that’s the approach, sooner or later you’ll find the backlogs piling up because you are saying too many YES to the change requests.
Always, track project management KPIs like the number of change requests made by the project stakeholders — the acceptance & the rejected rate as well. Map this to the impact it has on the project timeline, budget, and employee satisfaction.
Companies often make the mistake of treating employees as replaceable beings.
When people hop on a project they usually have a set mindset — not everyone is adaptive, agile, and flexible like water. Frustrated employees will feel less motivated towards completing the project in the best way — and that’s not good.
To keep the motivation high & energy level all jazzed up, as a project manager you can often use high rejection rates of change requests to boost the mood of your team… Lol. Just kidding.
Tracking Change Request Project Management KPIs helps keeps unwanted interferences at bay and helps make massive strides toward the project’s planned progression.
7. Team’s Workload/Burnout Project Management KPI — …cuz a good PMO gives break and doesn’t let the team break down
Talking of employee satisfaction rate — here’s one of the most critical project management KPIs that decides the fate of your project — your team’s burnout levels.
Often in organizations, employees are working on multiple projects, handling multiple clients simultaneously. We tend to forget that employees have their own personal lives as well — damn, it’s no less stressfull either (hello, monthly EMIs).
An effective project manager would track the burnout levels of an employee, and maybe give them a break if they need it. Anyways, burnout hampers the productivity level of an employee and is a barrier to their efficiency.
Would you not want the people working on your project to be in their best form?
If yes, track project management KPIs related to the workload & burnout levels of individuals working on your project.
8. Project Completion Percentage — a KPI PMO should refer to stay in zone
Task completion rate Project management KPI, may not in isolation reflect the real picture of the project’s status. It is possible that the task completion rate is high, lead time is low, and labor hours are high because extra resources were allocated to complete the tasks.
Now, extra resources leave a dent in the project budget.
If the budget is depleting fast and the overall project completion percentage is low — you need to intervene and ensure that resources are utilized judiciously.
Project completion, in reality, is the acknowledged delivery of features by the end client i.e., features for which invoicing & contract paperwork is done and dusted.
A finished task with a few non-critical bugs may not get accepted by the client and hence should not be included to calculate project completion KPI.
You may also need to factor in the Error rate to get actual insight into project completion. Hell yeah! Every project management KPI is dependent on some other and together they do magic for the project’s success.
Phew, here are some additional project management KPIs that you can consider tracking
There are a couple of other project management KPIs, which is not ideally the responsibility of a project manager to track, but a good soldier always go beyond his/her means in the interest of the conqueror.
And they say, client is the king!
9. Profitability & ROI Project Management KPIs — money matters
If a project is bleeding money recklessly, the ROI will get impacted.
Sometimes, it can be due to extra resource allocation to meet the lead time or to cater to the change requests, a high variation on planned vs actual billable hours, high user acquisition costs, a high user attrition rate, bug-affected features, and whatnot.
Spot the leakage holes and fix them before it is too late.
A project’s profitability is not just affected by the factors internal to project management, but also the external factors & variables like economic conditions, evolving user behavior and expectations, and more. A good project manager would regularly update the stakeholders on the project management KPIs that impact profitability and would seek to be in sync with external factors that may impact it too.
10. Customer Satisfaction — happy customers, healthy business
Just shipping the product is what normal project managers do. Ensuring the project’s success is what highly sought-after project managers pull off.
You can track the feedback & responses of your end-customers — the ones who are using the product your team & you architected. Evaluate the customer satisfaction rate, spot their pain points and if there are any — find the pain killer.
The customer satisfaction rate metric can be calculated by asking the users for review and answering questions like how likely are they to recommend the product to a peer. Avg daily & monthly active time, repetitive use of solutions for getting the tasks done, and multiple other KPIs can reflect customer satisfaction levels. Not exactly a project management KPI, but it is one of the most important factors behind a project’s success.
11. Canceled projects & reasons project management KPI — know the demon
If you are looking for a project management KPI that reflects the health of the overall organization in terms of project management maturity — see the overall ratio of successfully completed projects to unsuccessful projects. And also, do look at what percentage of unsuccessful projects were cancelled midway or post-completion. Diagnose the reasons, and suggest remedies for the same to the top-level management.
BEST PROJECT MANAGEMENT TOOL TO TRACK IMPORTANT KPIs
Use a project management tool that gives you the superpowers to track highly important project management KPIs — from how an employee is engaged across different projects — to backlog planning, lead time, budget variance, and almost everything!
You can track all the aforementioned project management KPIs from one single dashboard interface. And as these tools are designed for small & large collaborative teams, all the members can access the KPIs and introduce necessary course corrections for the best outcomes.
Try the following project management tools & keep rocking as a project manager 🎉
