When we think about measuring the performance of a project, it’s not really the same as measuring the performance of a team or a process. So we need to think a little differently about the kinds of measures that will tell us what we really need to know.
When we measure the performance of the business process or team, we’re interested in how a particular business result produced by that process or team is changing as time goes by. When we measure the performance of a project, we’re interested in learning the impact the project has at a point in time or over a fixed timeframe.
Projects by their very definition have a start point and an endpoint. The reason we do projects is to make a difference, and usually that difference is to improve something in the business. Thus, our first key performance indicator for projects is…
Project KPI #1: Direct Impact
The size of this impact on a business performance measure is a measure of a project’s success. It’s the size of the difference between the level of performance before the project’s start time and the level after the project’s end time. But it’s not the only measure of success.
Project KPIs #2 and #3: Bottom Line Impact and ROI
A project won’t be successful if the cost of doing it wasn’t sufficiently lower than the value of the impact. So two other important measures are financial impacts, like costs saved or income generated, and return on investment.
Project KPIs #4 and #5: On-time and On-budget
Measures can also help us manage the project while we’re implementing it. A well-managed project is more likely to have a big impact and big ROI.
This is where the most commonly used measures of project performance come in: on time and on budget. And these are measured at regular milestones throughout the project. But they only make sense if we don’t change the goal posts.
Project KPIs #6 and #7: Stakeholder Support and Engagement
Support for our project might also be important. Stakeholder perception of value can be measured to monitor this in part. But a more direct measure of support is the amount of stakeholder participation in project tasks and events.
Your Project Performance Measure Checklist
So now you have a basic framework of measures of the performance of a project:
- Business financial impact
- Business performance measure impact
- Milestones completed on time
- Milestones completed on budget
- Stakeholder perception of value
- Stakeholder participation
What frameworks do you use for measuring your projects?
The insights in this article first appeared as an article on the blog, “The Performance Measure Specialist,” featuring Stacey Barr.