20 Important KPIs Every Project Manager Must Track Regularly
Important KPIs Every Project Manager Must Track
What is KPI?
Key performance indicator (KPI) is a measurable value that indicate how well an individual, department or organization or an entity is achieving its important business objectives or goals.
KPIs can be of different types, applicable to different goals such as strategic goals or operational goals. There are different KPIs for different industries and even they differ from one company to another or one department to another.
Why KPIs Are Important?
Tracking key performance indicators (KPIs) is very important for a defined period of a project for a project as well as for an individual, department or organization. Tracking KPI numbers tells you whether you are making progress or not by how much. Without KPI you wouldn’t know whether you are progressing towards your goals or not. Knowing KPIs numbers, you can correct the course and align your efforts to meet the goal.
How to Identify & Define KPIs?
There are certain thumb rule to identify and defining KPIs. Let’s look at those.
- KPI should be clearly linked to important goals which are crucial for the organization/department
- Tracking KPI should clearly answer whether an individual/department/organization is on right track or not
- KPIs should be transparent to those individual, department; those should help them learn and improve
- Selected KPI should be controllable – meaning, it should not have elements which are beyond control of individual or department or orgnization; e.g. just to make the point – rainfall, economy growth rate, etc
- KPI should be such that it should make people accountable for the result – which can be qualitative or quantitative in nature
- For each KPI, organization should have target level or number so that the performance of an individual or department can be tracked against it.
KPIs in Project Management World
The KPI in project management context can be look at as
Key: Represents the important aspect that if it is achieved, can deliver project successfully or otherwise.
Performance: Represents the trend for set of figures or statistics of important project aspects that can be measured, managed/controlled during the lifecycle of a project
Indicator: Represents metric of current state or expected state of important aspect of project
There are many KPIs for tracking project performance but those are typically club them in following categories
- Project Schedule KPIs
- Project Budget KPIs
- Project Quality KPIs
- Effectiveness KPIs (Combination of above three)
Let’s list down some of the KPIs applicable in each of these categories that every project manager should track regularly.
Project Schedule KPIs
- Schedule Performance Index (SPI)
- Schedule Variance (SV)
- Planned Hours vs Actual Hours
- Planned Duration Vs Actual Duration
- Achieved Milestones vs Overdue Milestones
- Overdue Tasks
- Percentage of Schedule/Tasks Complete
Project Financial KPIs
- Cost Variance (CV)
- Profit Margin (%)
- Cost Performance Index (CPI)
- Planned Value of a Project (PV)
- Actual Cost of a Project (AC)
Project Quality KPIs
- Number of Incidents Reported
- Number of Unresolved Incidents
- Number of Customer Issues
- Number of Unresolved Customer Issues
Project Effectiveness KPIs (Combination of above three)
- Earned Value of a Project(EV)
- Resource Utilization
- Planned Hours vs Actual Hours of a Project
- Planned Hours vs Billable Hours of a Project
- Percentage of Used Budget of Allocated Budget
In next post we will see how one can set up processes and systems to identify as well as track these KPIs on a regular basis.