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Quick Take:

  • The adage that what gets measured, gets managed is only partly true
  • Determining what to measure is the first step, and tying these measures to outcomes is key
  • Evaluate your KPIs on a regular schedule to ensure the Project Portfolio is on course
  • Ask yourself (and your team) the question “what does success look like?”
  • Only measure things that are directly linked to outcomes
  • Evaluate the impact and likelihood of each measure to affect the project or the project portfolio positively or negatively
  • Key Performance Indicators can:
    • Provide objective evidence of progress towards achieving a desired result
    • Measure what is intended to be measured to help inform better decision making
    • Offer a comparison that gauges the degree of performance change over time
    • Track performance measures

The famous management expert Peter Drucker has been quoted as saying, “What gets measured, gets managed.” You’ve probably heard this quote before, perhaps many times.

Drucker never said it, but it somehow still rings true. Despite this advice, the important thing to realize is that just because you’re measuring it doesn’t automatically mean you’re managing it, and vice versa. It certainly doesn’t mean you’re measuring the right thing.

Measuring something that doesn’t matter wastes everyone’s time and might end up making the project fail. Not measuring the right things will definitely put your project portfolio at risk.

So how do you determine what should be measured? And how can you strike the right balance between under- and over-measuring?

The best solution to these questions is to only measure things that are directly linked to outcomes. Ask yourself (and your team) the question “what does success look like?”  You might think this is a no, duh question, but you may be surprised how many differing answers there can be.

Of course, success usually means the project delivered on its charter. It can be on-time, on-budget, and on-scope and still have been a terrible project to be part of. If your team is on salary, there’s higher likelihood that it was a tough slog to get that final outcome. Should you measure team satisfaction? If it is tied to productiveness, yes, you should.

The first step in determining your metrics for success is to find out what to measure. Find the project activities or assets that most affect project outcomes. If they can be measured, they should be.

The second step is to evaluate the impact and likelihood of each measure to affect the project or the project portfolio positively or negatively. Sometimes project managers have blinders on when it comes to how their project affects other projects in the portfolio. Every project is #1 for the PM. It’s difficult to do project prioritization if all the PM is looking at is his or her projects. You need some way to score and select the most impactful projects in a portfolio.

This is where Project Portfolio Management (PPM) comes in.

Key Performance Indicators

The emperors of the Chinese Wei Dynasty (221-265 AD) may have been the first to use Key Performance Indicators (KPIs) when they rated the performance of members of their family. But the KPI really took off in the 1990s when the first Balanced Scorecard was used.

Simply put, KPIs are a set of quantifiable measurements used to gauge performance or progress of a business or program or project. KPIs must be specific and must clearly define or contribute to the goal of an effort. They also must be relevant, quantifiable, and outcome based. Good Project Portfolios evaluate KPIs often, perhaps quarterly, monthly, or even week by week. Such measurement can affect future project success by delivering a clearer understanding of past performance.

KPI.org says organizations using Key Performance Indicators can:

  • Provide objective evidence of progress towards achieving a desired result
  • Measure what is intended to be measured to help inform better decision making
  • Offer a comparison that gauges the degree of performance change over time
  • Track performance measures such as:
    • Efficiency
    • Effectiveness
    • Quality
    • Timeliness
    • Governance
    • Compliance
    • Behaviors
    • Economics
    • Project performance
    • Personnel performance or resource utilization
  • Work most effectively when balanced between leading and lagging indicators

KPIs and other metrics such as Objectives and Key Results (OKRs) are important tools that can provide project and portfolio managers with an immediate understanding of how an organization’s project portfolio is performing.

It’s up to management to decide which potential measures are KPIs. Depending on the organization, the KPIs for your project portfolio could be based on typical project concerns, such as:

  • Timeliness
  • Quality
  • Effectiveness

Or they could be financially oriented, like:

  • Budget Variance
  • Planned Value
  • Cost Performance Index

KPIs can also be built on customer measures like:

  • Customer Satisfaction
  • Customer Loyalty
  • Net Promoter Score

There are myriad other important measures you can use to evaluate your portfolio. These measures should also be embedded in your project reports and dashboards that include project metrics or PPM metrics (for the whole project portfolio).

The following KPIs and metrics should be part of your comprehensive project reporting.

Operational Efficiency KPIs

These metrics and KPIs measure resource utilization and team performance. Typically, this information is presented in a Gantt Chart or Reporting Dashboard.

  • Resource Allocation: Measures percentage of time spent by a single resource (or group of resources) over the project duration. Shows tasks completed by resource in certain time span. Resource productivity is measured and should be evaluated by the manager in charge of a project.
  • Project Effort: Measures time devoted to working on a project.
  • Project Churn: Measures projects that are on stand-by or have been forfeited over a period of time. Conveys changes in a project and how it will adjust and keep up with these changes. Eliminates excessive projects that might otherwise disrupt the balance of the project portfolio causing project churn.

Execution KPIs

These metrics illuminate project implementation and impact once projects are deployed for assessment. They reveal whether projects are successful and show costs accumulated during the project operation. These KPIs are usually presented via dashboard or report.

  • Project Success Rate: Measures rate of success or failure for a portfolio of projects based on time, budget, and fulfillment of requirements through delivery of expected results. This metric takes into consideration stakeholder satisfaction.
  • Budget Variance: Estimates costs included in the planning stage of the project. Computes or estimates via budgeted task cost, actual task cost and earned value.

Business Value Delivered KPIs

Business value metrics are used for measuring the expected value of projects. Projects rely on return value to determine if they are successful or not.

  • Customer Satisfaction: Measures customer satisfaction through both client and stakeholder feedback after the project is delivered.
  • Business Value Realized: Measures whether projects are properly selected and implemented at the proper time interval. Estimated benefits can be computed from the date of the project’s delivery. Measured benefits include revenue added, cost savings and customer satisfaction.

Strategic Alignment KPIs

Alignment KPIs measure whether projects are congruent with an organization’s objectives, target, and unit investments.

  • Percentage of Projects Aligned with Objectives: Measures the percentage of existing projects that are aligned with the business objective of a company.
  • Investment Class Targets: Estimates the investment made in a project through the following components: run, grow, and transform.
  • Business Unit Investment Targets:  Measure existing business units by setting targets for effort and cost. Once these investments are spent, it will be assessed against the two factors.

What metrics are you using?  Any from these lists? Any to add?  Let us know!

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      Who is Projectric and what are our key capabilities that will help you?

      Projectric is a cloud-based Project Portfolio Management (PPM) solution that provides a top-down view of your full portfolio of projects. With features such as real-time project management dashboards, resource management tools, easy-to-understand charts, and customizable scoring settings, Projectric enables you to quickly understand the status and impact of your projects so that your organization can function more efficiently.

      An Overview of the Projectric Project Portfolio Management Solution

      In a business landscape that demands transformation and innovation at a rapid pace, organizations must automate processes, maintain existing IT infrastructure and oversee the roll-out and migration of new systems – or risk falling behind the competition.

      Managing Project Portfolios as an organizational asset requires much more than just a project management tool. You need to know more than just project status. To optimize your project management you need to know:

      • Which projects are in trouble?
      • What resources will be available when the next project starts?
      • How to evaluate prospective projects and prioritize based on the value to your organization
      • How to get a real-time portfolio health analysis via a comprehensive dashboard

      Projectric, a cloud-based PPM solution, can answer these and many more Project Portfolio questions by identifying the right projects for approval, allocating and managing resources, and providing insight into these initiatives.

      Benefits

      The benefits of using Projectric for your Project Portfolio Management (PPM) solution include:

      • A secure, enterprise-ready PPM that delivers transparency and governance
      • Managing the IT portfolio like an investment
      • Proactive management of the portfolio
      • A focus on value and portfolio goals
      • Supporting stakeholders throughout the organization

      Projectric Delivers Portfolio Intelligence

      Portfolio Intelligence enables the transformation of project and program data into relevant, actionable information for making business decisions. Projectric delivers to key decision makers portfolio-level KPIs and metrics via dashboards and graphs, delivering unparalleled insight that assures your organization’s initiatives provide the transparency and governance necessary for your business to quickly adapt and succeed.

      Scoring

      Scoring enables your organization to focus on what projects and portfolios will deliver the maximum return on investment. To accomplish this, Projectric enables you to define scoring criteria, establish scoring weights, compare the various projects by their value to the organization, forecast the impact of your portfolio against strategic goals and to measure the actual impact. Scoring criteria should include strategic, financial, and risk categories. Once scoring is complete, your governance team can rank the projects and come to consensus on prioritizing them.

      Dashboards

      Projectric dashboards display real-time key performance indicators for all stakeholders. Using a dashboard, you can track overall performance and progress and highlight areas that need attention. Powerful reporting and graphical features provide transparency across the organization. Your dashboard might include:

      • Progress reports
      • Milestones
      • Key metrics
      • Task status for planning, design, development, and testing phases
      • Team status
      • Cost status
      • Resource allocation

      Project Lifecycle

      Portfolio Intelligence’s signature lifecycle and workflow process organizes and guides projects through a tracking and decision making process from initial idea to finished work. You can manage and track project initiation, planning, execution, and closure.

      Project Tagging

      With Projectric, you can easily add metadata tags to your projects to support analysis and reporting. These tags can, for example, link your projects to departments, geographical locations, and other assets to make reporting easier.

      Cloud

      It is simple to roll Projectric out. No installation necessary and it’s accessible to your team anywhere.

      Notifications

      Projectric offers automated messages that can alert you when significant events take place. You may want to set notifications for when when key milestones are met, or when timelines are slipping, or when important dates are imminent.

      Real Time Portfolio “Health Analysis”

      Many organizations use tools such as Excel to track the progress of projects. Projectric has features that enable you to quickly determine the health of your projects or portfolios.

      Resource Tracking

      Projectric provides insight into real-time resource utilization across all projects and programs in your portfolios.

      Issue Tracking

      Issues are flagged across your portfolios.

      Drill Down

      Projectric enables you to easily and quickly drill down to the phase, task, or milestone level of any project in the portfolio.

      Security

      Projectric enables128 bit SSL encryption to secure usage across the organization.

      Summary

      There it is—a list of ways Projectric can help your organization succeed.

      Try a demo today, or read our definitive guide to best practices in Project Portfolio Management.

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          Portfolios, Programs and Projects are Essential to Managing Work

          Quick take:

          • Projects have a definite time-frame and are made up of tasks of finite duration to achieve a specific goal
          • Programs organize multiple related projects to meet strategic business objectives
          • Portfolios are collections of projects, programs, other smaller portfolios, and other planned activities that are managed to achieve strategic objectives

          These three management processes are crucial for effective project management, known as Project Portfolio Management (PPM).

          The 3 P’s

          Portfolios, Programs and Projects are known as the 3 P’s of project management. The following is a quick overview of the relationships between the 3 P’s.


          What is a project portfolio?

          Definition: A portfolio consists of projects created to meet an organization’s strategic goals. It is the top level of Project Portfolio Management systems.

          Details: These collections of projects can be established for an entire company or for a division within a larger organization.

          Need for PPM: Projectric provides a portfolio level solution that supports strategic alignment, transparency and governance.


          What is a program?

          Definition: A program is a group of related or similar projects managed in a coordinated fashion to achieve a strategic objective.

          Details: Program Management occurs at the program level. Program or Project Managers guide interrelated or interdependent projects as a group. The specific purpose of each project within a program should be defined and aligned with the goals of the program. A program can span years.

          Need for PPM: Because programs can span years, projects and people, optimizing resources among projects and reducing constraints across programs increases an organization’s performance.  This is Project Management.  


          What is a project?

          Definition: A project is a temporary endeavor undertaken to create a unique product, service or result.

          Details: A project is composed of tasks to achieve an end and is temporary—once a project’s objectives are realized, the project is delivered and closed.

          Need for PPM: Projects can be completed by teams dispersed around the world- this is where resource management from Project Portfolio Management software (like Projectric) becomes helpful.


          Examples of Portfolios, Programs, Projects Within Organizations

          Portfolio: University Facility Management

          Program: Going Green

          Projects:

          • Benchmark water and energy use
          • Build a “green wall” in the sciences library
          • Install new efficient air conditioning units
          • Install Building Automation software

          Learn how these customers—across many industries—use Projectric to manage their project portfolios:

          DeVry University

          Duro Bag Manufacturing

          Messer Construction


          Check out Projectric’s features.

          Request a Demo

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