A previous blog, Do You Really Need EVM Software to Manage Your Projects, discussed there is more to maintaining visibility into project performance. The common work performance metrics associated with earned value management (EVM) such as schedule, cost, and at completion variances or indices are certainly useful to project managers. However, those metrics are only part of the picture.
Prudent project managers also use other measures and metrics so they have a more comprehensive understanding of current project performance. The project manager tailors these key performance indicators (KPIs) based on the project’s work scope, complexity, priorities, risk factors, and what’s important to them to ensure project objectives are met. That way they have additional relevant fact-based information to address project issues proactively – and effectively.
With useful fact-based information, they can ask project personnel the right questions, identify the root cause of a problem, and determine the best path to address the root cause. The project manager may need to work with technical personnel, functional managers, or upper level management to help project personnel resolve issues quickly. It is in everyone’s best interest project personnel have what they need to complete their tasks successfully.
There is a benefit to elevating project performance information above the project execution environment to other levels of management. Higher level managers also need reliable source data they can use to do their own project performance and financial analysis whether for one project or across a portfolio of projects. This helps them determine what future work to bid on, whether they need to make staffing adjustments, or they need to make other strategic business adjustments to increase profit margins.
Examples of Other Performance Metrics
What are some other performance metrics project managers and other managers often use? Common ones include:
- Time based and other schedule metrics that inform them about schedule trends such as total float consumption, schedule margin burn-down, or how well they are executing to the baseline or current plan.
- Cost metrics. The common ones are schedule and cost variances, schedule and cost performance indices, variance at completion, and performance to date formulas (to complete performance indices) to verify a project manager’s estimate at completion.
- Risk and opportunity metrics. These help project managers track how successfully they are executing risk handling and opportunity pursuit plans for their project. The available data and metrics are dependent on the risk and opportunity management process in place for the project.
- Staffing metrics. Another blog, Why You Need Data Driven Resource Requirement Planning, discussed how successfully managing resource capacity and demand can make a difference in helping project manager’s meet their objectives and increase profit margins.
- Contract and financial metrics. This can cover a broad range of metrics useful to tracking funding, revenue, and profit margins.
For example, the budget plan should align with funding events and the project manager often needs to track when their project is likely to hit a percent spent point. They are often contractually required to notify their customer when they reach a defined percent spent value. They also need to be able to accuracy assess whether the project’s current most likely estimate at completion exceeds funding or contractual limits. Upper level management and the customer must be aware of these types of situations. Depending on the contract, the company may be responsible for any cost overruns.
The project manager and other managers also need to be aware of whether the actual expenditures to do the work is exceeding the money coming in. Cash flow trends are always important to assess whether corrective actions are required to ensure the company isn’t losing money on the project. No one likes ugly surprises.
How the Right Project Control Tools Can Make a Difference
ProjStream’s BOEMax proposal software and MaxTeam cost management software include a built-in interactive visual dashboard, MaxBoard, so project managers and other managers can quickly assess cost, staffing, and financial performance metrics. They have additional visibility into the current work progress and financial status. The project manager or upper level management can configure the applicable KPIs to match performance or business objectives for a specific project, a group of projects, or enterprise wide. They can assign each KPI a weight to set the relative importance of the metric.
For example, management can create combined views of resource requirements for upcoming contract awards as well as existing projects for a more comprehensive assessment. This helps them plan ahead and are aware of any near-term critical resource limitations. They can better align resource availability with when projects need specific resources. For some companies, the availability of a few key resources can make all the difference whether a project succeeds or not – particularly right after contract award. Management needs to be aware of single points of failure and be prepared to step in to help project managers or project personnel at project startup or to overcome problems, complete their tasks, or meet contractual deliverables.
MaxTeam also includes the capability for project managers and other managers to track project bookings, funding profiles, and receipt of project payments. They can easily incorporate other financial performance metrics useful for tracking cash flow and determining whether projects are meeting profit targets.
Because MaxBoard is using the source data in BOEMax and MaxTeam, authorized users can drill down into the data to identify work elements with issues to help isolate the likely root cause. With relevant fact-based information, they can begin asking informed questions and work with project or functional personnel to figure out how to best resolve the issue. The result? They can quickly address issues before they mushroom into bigger problems that impact the project’s schedule or cost objectives.
Where to Find More Information About Other Project Performance Metrics
The National Defense Industrial Association (NDIA) Integrated Program Management Division (IPMD) maintains a Guide to Managing Programs Using Predictive Measures. This guide discusses over 30 indicators project or other managers often use that may provide useful information to help them ask the right questions, investigate likely root causes, and proactively manage the work.
You may find this guide is a useful reference document because it provides additional insight into what the metrics mean. Perhaps there are a few metrics you would like to incorporate into your project control process. What makes this document so helpful is the discussion for each metric is divided into sections including:
- A brief discussion of the metric and how it is defined.
- How the metric is calculated.
- What information the output of the calculation provides, often in a graphical format, and any thresholds that should be noted in using the metric for analysis or management action.
- What aspects of the metric provides predictive information.
- Potential questions a project manager may want to consider when performing a deeper dive into the analysis of the metric as an aid in managing the program.
- Caveats, limitations, and notes that discusses aspects of the metric that may be of interest such as when a particular metric is less predictive.
This guide can be found on the NDIA IPMD Division Guides and Resource web page.
Call or schedule a demo today to see how MaxBoard’s interactive visual dashboard can help you to quickly assess project performance metrics, track performance trends for a portfolio of projects, or identify areas of concern to ensure projects meet financial objectives.