Project Management Metrics, Key Performance Indicators and Dashboards

Project Management Metrics, Key
Performance Indicators and Dashboards

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©2010 International Institute for Learning, Inc., All rights reserved. Intelligence, Integrity and Innovation | www.iil.com | 1
Copyright
Material in this presentation has been taken from the

following book:
Harold Kerzner, Project Management Metrics, Key
Performance Indicators and Dashboards, John Wiley
& Sons and IIL Co-publishers, 2011 publication
release date.
The Importance of Metrics Today
GRADE LEVEL COMPETENCY
1 Understand project metrics and key
performance indicators
2 Be able to identify and create project-

specific metrics
3 Be able to track and report metrics on a

project
4 Be able to measure and evaluate metrics
5 Be able to extract best practices from

metrics
A Stakeholder View of Metrics
Good metrics are a means of continuous project

health checks
Good metrics serve as early warning signs
Good metrics serve as risk triggers
Why Projects Get into Trouble
Our disbelief in the value of using a project’s metrics

(or at least the existing metrics)
Selecting the wrong metrics
Our fear of what project health checks and metrics
may reveal
The Metrics Value Spectrum
The Metrics Value Spectrum
Metrics are the Holy Metrics do not work;

Grail, specifically focus should be on
time and cost metrics leadership, vision,
strategy and prayers
Issues with Health Checks and Metrics
Bad news: The surfacing of previously unknown or

hidden issues could lead to loss of employment,
demotions, or project cancellation.
Good news: Project health checks offer the greatest
opportunity for early corrective action to save a
potentially failing project. Health checks can also
discover future opportunities.
Timing of a Health Check
Health checks can be performed randomly when needed or
periodically throughout various life cycle stages.
However, there are specific circumstances that indicate that a
health check should be accomplished quickly. These include:
Significant scope creep
Escalating costs accompanied by a deterioration in value and
benefits
Schedule slippages that cannot be corrected
Missed deadlines
Poor morale accompanied by changes in key project
personnel
Misconceptions
The person doing the health check does not understand
the project or the corporate culture, thus wasting time.
The health check is too costly for the value we will get by
performing it.
The health check ties up critical resources in interviews.
By the time we get the results from the health check, it is
either too late to make changes or the nature of the
project may have changed.
New Developments in Project Management
New Success Criteria
Key Performance
Governance Indicators
Dashboard
Design
Measurement
Defining a Metric
Metrics are:

Objective, measurable attributes of project
performance to assist in informed decision-making
A means of assessing the project’s health
A means of assisting in the prediction of project
success and failure
A means of capturing best practices and lessons
learned
Using Metrics
Good metrics allow you to catch mistakes before they

lead to other mistakes.
Metrics tell us if we are hitting the targets/milestones,
getting better or getting worse.
Metrics are often ignored because they are hard to
define and collect.
Benefits for Using Metrics
To improve performance for the

future
To improve future estimating
To validate the baselines
To improve client satisfaction
Metrics and Project Complexity
The larger and more complex the project, the greater
the difficulty in measuring and determining true
progress and success. Therefore, the larger and
more complex the project, the greater the need for
effective metrics.
Role of Metrics in Project Management
You cannot effectively

manage a project without
having good metrics and
reasonably accurate
measurement capable of
providing you with complete
(or nearly complete)
information.
The Confusion over Metrics
What variables to emphasize?

What variables to select?
How will it be measured?
How will it be reported?
How will it be viewed by the stakeholders?
The Selection of Metrics
The selection of the metrics is often based upon who

is doing the asking.
Each stakeholder may ask for a different set of
metrics.
Offering your stakeholders all of the metrics in your
library can open Pandora’s box.
The Metric Selection Process
Make sure that the metrics are worth collecting.

Make sure that we use what we collect.
Make sure that the metrics are informative.
Train the team in the use and value of metrics.
Not All Metrics Can Be Used
Customers may desire real-time reporting rather than
periodic reporting, thus making some metrics
inappropriate.
The cost and complexity of the measurement may make a
metric inappropriate for use.
The metric does not fit well with the organizational process
assets available for an accurate measurement.
Project funding limits may restrict the number of metrics
that can be used.
Metrics must be periodically reviewed.
Defining and Selecting Metrics
PAST VIEW PRESENT VIEW
Metrics are fixed for Metrics can change

the duration of the over the duration of
project the project
(Usually Time and (Metric-Driven Project

Cost Metrics Only) Management)
Characteristics of a Metric
Has a need or a purpose
Provides useful information
Focuses toward a target
Can be measured with reasonable accuracy
Reflects the true status of the project
Supports proactive management
Assists in assessing the likelihood of success or failure
Is accepted by the stakeholders as a tool for informed decision-
making
Two General Categories of Metrics
Business-based or financial metrics are linked to

long-term strategic and business objectives and
usually do not change much once they are identified.
Project-based metrics can change for each project
and each life-cycle phase. The metrics may be
restricted by the project’s funding limitations.
Specific Types of Metrics
Quantitative metrics (planning dollars or hours as a percentage
of total labor)
Practical metrics (improved efficiencies)
Directional metrics (risk ratings getting better or worse)
Actionable metrics (affect change such as the number of
unstaffed hours)
Financial metrics (profit margins, ROI, etc.)
Milestone metrics (number of work packages on time)
End result or success metrics (customer satisfaction)
How Many Metrics are Needed?
Too many:
Metric management steals time from other work
Provides too much information such that
stakeholders cannot determine what information is
critical
Provides information that has limited or no value
Too few:
Fails to provide the right information
Inability to make informed decisions
Metrics Must Support Information Systems
There can be three information systems on a project:

1. One for the project manager
2. One for the project manager’s parent company
3. One for the stakeholders and the client
There can be a different set of metrics and KPIs in

each of these information systems.
Typical Questions Concerning Metrics
Collecting information and reporting:
Who will collect the information?
When will the information be collected?
When and how will the information be reported?
Measurements:
What should be measured?
When should it be measured?
How should it be measured?
Who will perform the measurement?
General Rule
If it cannot be measured, then it cannot be managed.
Metric Measurements
Metric measurements can be recorded as:

Numbers
Percentages
Dollars
Counts
Ratings (good, bad or neutral)
Qualitative versus quantitative
The Metric/KPI Target Boundary Box
Performance
Characteristics
Favorably
Superior
Exceeding Target
Target + 10%
Performance Normal
Target
Target - 10%
Unfavorable
Caution
Expectation
Target - 20%
Risk of Project
Urgent Attention
Failure
Causes for Lack of Support with Metrics
Disagreements among the stakeholders
Mistrust among the stakeholders
Team members believe that metrics look like a spying
machine that allows management and stakeholders
to watch them closely
Metric Naysayers
Metrics are an expensive and useless measurement

Metrics are costly to maintain and the benefits do not
justify the cost
Metric measurements are a waste of productive time
Understanding the KPIs
Although most companies use metrics for

measurement, they seem to have a poor
understanding of what constitutes a KPI, especially
for projects.
Purpose of a KPI
The ultimate purpose of a KPI is measurement of

items relevant to performance and to provide
information on controllable factors appropriate for
informed decision-making such that it leads to
positive outcomes.
Good KPIs drive change but do not prescribe a course
of action.
The Need for Better KPIs
What gets measured gets done!

You never really understand anything fully unless it
can be measured.
If the goal of a performance measurement system is
to improve efficiency and effectiveness, then the KPI
must reflect controllable factors.
There is no point in measuring a KPI if the users
cannot change the outcome.
Dissecting the KPIs
Key = a major contributor to success or failure

Performance = measurable, quantifiable, adjustable
and controllable elements
Indicators = reasonable representation of present
and future performance
Defining a KPI
KPIs can be selected using the following:

Predictive: able to predict the future of this trend
Measurable: can be expressed quantitatively
Actionable: triggers changes that may be necessary
Relevant: the KPI is directly related to the success or
failure of the project
Automated: reporting minimizes the chance of human
error
Few in number: only what is necessary
Business vs. Project KPIs
Variable Business/Financial Project
Focus Financial measurement Project performance
Intent Meeting strategic goals Meeting project objectives,
milestones and deliverables
Reporting Monthly or quarterly Real-time data
Items to be looked at Profitability, market share, Adherence to competing
repeat business, number of constraints, validation and
new customers, etc… verification of performance
Length of use Decades of even longer Life of the project
Use of the data Information flow and Corrective action to maintain
changes to the strategy baselines
Target audience Executive management Stakeholders and working
levels
High-Level Purposes of a KPI
Measurements that lead to motivation of the team

Measurements that lead to compliance with use of
organizational process assets and alignment to
business objectives
Measurements that lead to performance
improvements and the capturing of lessons learned
and best practices
Categories of KPIs
Quantitative KPIs: numerical values
Practical KPIs: interfacing with company processes
Directional KPIs: getting better or worse
Actionable KPIs: effect change
Financial KPIs: performance measurements
Lagging KPIs: measure past performance
Leading KPIs: measure drivers for future
performance
Improper Selection of a KPI
Many things are measurable but not key to the

project’s success. KPIs are key metrics.
It is important that the number of KPIs be limited so
that everyone is focused on the same KPIs and
understands them.
Too many KPIs may distract the project team from
what is really important.
Risks in the Number of KPIs
Too many KPIs can slow down projects due to

excessive measurement and reporting requirements.
Too many metrics/KPIs can also blur one’s vision on
actual performance. We tend to create too many
rather than too few metrics.
Too few critical KPIs can likewise cause delays
because of the lack of critical information.
KPI Measurement
Anything can be measured but perfect measurements

may be unrealistic. Therefore, it may be impossible to
select a perfect set of KPIs.
Typical KPI
Percent of work packages adhering to the schedule
Percent of work packages adhering to the budget
Number of assigned resources versus planned resources
Percent of actual versus planned baselines completed to date
Percent of actual versus planned best practices used
Project complexity factor
Customer satisfaction ratings
Number of critical assumptions made
Percent of critical assumptions that have changed
Number of cost revisions
Number of schedule revisions
Number of scope change review meetings
Number of critical constraints
Percent of work packages with a critical risk designation
Net operating margins
MahindraSatyam’s Customer Delight Index
(CDI)
SYMBOL MEANING
Data not entered
Dissatisfied
Satisfied
Delighted
(©2010 MahindraSatyam. All Rights Reserved.)
Complexities with Identifying KPI
It may be difficult to get customer and stakeholder

agreement on the KPI
Must determine if the KPI data is in the system or
needs to be collected
Must determine the cost, complexity, and timing for
obtaining the data
May have to consider the risks of information system
changes and/or obsolescence that can impact KPI
data collection over the life of the project
Dashboards
Dashboard designers must understand:

The end user’s needs
How the dashboard will be used
How the measurements will be made
How often the measurements will be made
How the dashboard will be updated
How to maintain uniformity in design, if possible
Understanding Dashboards
Dashboards are communication tools to provide information at a glance
Dashboard design begins with an understanding of the user’s needs
Dashboard design can be done with simple displays
Dashboard design can be done with simple tools
Use the fewest metrics necessary
Determine the fewest metrics that can be retained in memory
Using too many colors or sophisticated, complex metaphors leads to
distractions
Limit metrics to a single screen
Perfection in design can never be achieved
Asking for assistance with the design effort is not an embarrassment
Monitor the health and user friendliness of the dashboard
Dashboard Design
Dashboard
Dashboard Design and Layout
Factors that must be considered include:

Colors
Positioning
Brightness
Orientation
Saturation
Size
Texture
Shape
Dashboard Design and Layout
Some rules exist for dashboard design and layout:

Rules for selecting the right artwork
Rules for screen real estate
Rules for artwork placement
Rules for color selection
Rules for accuracy of information
Rules of Colors
Rules of Colors
Standard Colors Emphasis Colors

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Project Management Metrics, Key

Performance Indicators and Dashboards

 Material in this presentation has been taken from the

2 Be able to identify and create project-

3 Be able to track and report metrics on a

4 Be able to measure and evaluate metrics

5 Be able to extract best practices from

 Good metrics are a means of continuous project

 Our disbelief in the value of using a project’s metrics

The Metrics Value Spectrum

Metrics are the Holy Metrics do not work;

 Bad news: The surfacing of previously unknown or

 Metrics are:

 Good metrics allow you to catch mistakes before they

 To improve performance for the

 You cannot effectively

 What variables to emphasize?

 The selection of the metrics is often based upon who

 Make sure that the metrics are worth collecting.

PAST VIEW PRESENT VIEW

Metrics are fixed for Metrics can change

(Usually Time and (Metric-Driven Project

 Business-based or financial metrics are linked to

 There can be three information systems on a project:

 There can be a different set of metrics and KPIs in

 If it cannot be measured, then it cannot be managed.

 Metric measurements can be recorded as:

 Metrics are an expensive and useless measurement

 Although most companies use metrics for

 The ultimate purpose of a KPI is measurement of

 What gets measured gets done!

 Key = a major contributor to success or failure

 KPIs can be selected using the following:

 Measurements that lead to motivation of the team

 Many things are measurable but not key to the

 Too many KPIs can slow down projects due to

 Anything can be measured but perfect measurements

 It may be difficult to get customer and stakeholder

 Dashboard designers must understand:

 Factors that must be considered include:

 Some rules exist for dashboard design and layout:

You might also like

Material in this presentation has been taken from the

Good metrics are a means of continuous project

Our disbelief in the value of using a project’s metrics

Bad news: The surfacing of previously unknown or

Metrics are:

Good metrics allow you to catch mistakes before they

To improve performance for the

You cannot effectively

What variables to emphasize?

The selection of the metrics is often based upon who

Make sure that the metrics are worth collecting.

Business-based or financial metrics are linked to

There can be three information systems on a project:

There can be a different set of metrics and KPIs in

If it cannot be measured, then it cannot be managed.

Metric measurements can be recorded as:

Metrics are an expensive and useless measurement

Although most companies use metrics for

The ultimate purpose of a KPI is measurement of

What gets measured gets done!

Key = a major contributor to success or failure

KPIs can be selected using the following:

Measurements that lead to motivation of the team

Many things are measurable but not key to the

Too many KPIs can slow down projects due to

Anything can be measured but perfect measurements

It may be difficult to get customer and stakeholder

Dashboard designers must understand:

Factors that must be considered include:

Some rules exist for dashboard design and layout: