An insight into the delivery timeline for your project. Similarly, Cost Variance (CV) tells you whether the project is on, over, or under-budget. For example, a project with a budget of $100,000 has a scheduled period of 12 months. Some ways to measure the success of a project include asking how well the project … At just under 5 feet, Sylvia is a living testament to the adage that good things come in small packages. Thus, an employee who works 1,500 hours out of all his 2,000 available hours has a utilization rate of 75%. It is imperative to keep track of performance metrics throughout the entirety of a project's lifecycle. After 6 months, 50% of the project’s time has elapsed. … Helps you manage resources and projects better. Project management is riddled with complications. This should include everything from salaries to software purchases. In the former case, you have much more leeway to grow. At the same time, your choice of metrics should be limited in their scope. You don’t have to use them all, but this list is a good place to start. Your project management metrics are used to compare performance over time. Margin will always be a percentage and is the percentage of each dollar earned after costs have been subtracted. Any metric you measure should be clearly and accurately measurable. If SPI is >1, the project is ahead of schedule. The cost of generating revenue at your business. READ MORE on checkykey.com Program metrics examples This can help you zero in on your most profitable people and projects. Your target utilization rate will vary based on your businesses and roles within those businesses. It’s important to note that this metric focuses on the scheduled value, not the actual value. Planned Value, which is sometimes also called Budgeted Cost of Work Scheduled (BCWS), is a measure of the estimated cost of planned activities at any given time. Of course, the agency’s location and business focus affect this metric, but $100,000 is a good baseline to aim for. This means if there is ever a change in the metrics you are tracking or how the data is being accumulated, it should be clearly noted in reports. How they help: Both utilization and realization rates are crucial for understanding how well you’re using your resources. All the metrics you use to evaluate project management performance must be: All the project management metrics you use should be: Point #1 and #2 are obvious enough. Also referred to as: Actual Cost of Work Performed (ACWP). Select these carefully so that they cover only the parts of the business you care about. Also referred to as: >Budgeted Cost of Work Performance. A list of common management metrics. Project management metrics related to costs can prove the value of a team. Similarly, Cost Performance Index (CPI) helps you evaluate how the project is faring in terms of its budget. Most project metrics indicate if a project is on schedule and budget. Keeping tabs on project management metrics is crucial for optimizing your agency. Far too many agencies fall into the trap of measuring metrics that are irrelevant to their business at that particular moment. Project … You’ll use this to figure out whether you’re a) measuring correctly, and b) performing up to your own expectations. Pick whichever is easier for you to understand and retain it throughout the project. It’s a good idea to calculate the gross profit margin for individual projects, clients, and resources. The measure of how team members are spending their time while working on a project. Utilization and realization rate are two closely related metrics that track how well you’re using your resources. Actual Cost is the third of the baseline metrics alongside PV and EV. Any project management … Billable utilization is a critical concept for firms that make money by billing out resources (people) to customers. Total Utilization: This metric measures the percent of time your employees spend on any productive work, including business development and proposal-writing. The difference between the Earned Value and Planned Value. Of these, 200 hours are scheduled for training, while another 300 are scheduled for in-house work. Schedule Performance Index (SPI) can be measured as follows: Although SPI measures the same thing as SV, it is easier to understand at a glance. Also referred to as: the indicator of the project’s cost efficiency. In contrast, gross margin tells you how much of your revenue you’re spending in servicing that revenue. Measuring Planned Value is easy. You’ll also learn the top 11 metrics every agency needs to track. Also referred to as: Budgeted Cost of Work Scheduled (BCWS). This allows you to identify if the project is running over or under the expected baseline that was originally forecasted. A robust PM system might tell you how a project is doing at any moment, but it can’t tell you how the organization or its constituent people are performing. Utilization is typically … If your priority is raising revenue, for instance, focus on sales metrics, not operations-focused metrics like utilization rate. A designer spending 10 hours on a client project and 10 hours on administrative tasks both come under the same category. It’s not enough to measure things; you must also measure the right things in the right way. Keeping an eye on these KPIs is essential to know if your project is on track. All you have to do is add up the money you’ve spent so far on the project. Your goal should be to maximize your realization rate as much as possible. This is a measure of the actual expenses incurred in completing all of the work done to date. You can make the entire measuring process much easier by using a data-focused project management system such as Workamajig. AGI: FTE, thus, tells you how much money you’re bringing in for each full-time employee in your business. Only measure it if the answer is a resounding ‘yes’. Here are some additional tips: 1. You can create reports on the fly to understand exactly how each project and your entire agency is doing. A baseline for performance, including industry benchmarks. Project management metrics are specifically used to describe how we can find out how successful a project was. If a change occurs to trigger a warning metric, for example. Project KPI’s are important so a project manager can show the performance of the project in delivering what the customer needs and ultimately to determine the success of a project. You’ll learn the right approach to use when measuring project performance. I’ll cover project management metrics in detail in this guide. This is the approved budget for all the performed project costs and activities completed by a specific date. However, when combined with other metrics (see below), it can tell you a lot more about your project performance. Regardless of what industry or space you’re in, there are certain metrics set in stone. Utilization rate is a measure of the utilization of your resources, i.e. This data can be subjective or objective, individual or team-focused, project-wide or organization-wide. Like Planned Value, think of it as a baseline metric you must calculate for all projects. Software development metrics are quantitative measurements of a software product or project, which can help management understand software performance, quality, or the productivity and efficiency of software teams. You only have to consider the total budget allocated for the project and the project’s completion rate. SV tells you whether the project is ahead or behind schedule. Project metrics are a useful way to track progress against key. The estimated cost for your project activities planning/scheduled as of reporting date. This is all the more true for project management where you’re usually dealing with a mix of hard and soft data. Utilization rate is expressed as a percentage. Thus, the Planned Value of the project at 6 months would be $50,000 (50% * $100,000). You can compare Planned Value with other KPIs to determine if you are running ahead or behind schedule on a project. For instance, a designer might have 2,000 available hours. On that note, let’s look at some of the top project management metrics agencies usually measure. Subtract the actual budget spent from the estimated budget set at the beginning of the project. Instead, if you use proven measurement tools such as NPS (Net Promoter Score) that clients might already be familiar with, your results will be much more accurate. Choosing which project management KPIs to track and measure is only the first step. Think of it as a baseline KPI that you’ll reuse to measure several other more important metrics. Remember to choose a handful of KPIs to benchmark and no more than seven. KPIs let you examine your project’s progress in real dollars, hours, or whatever unit is necessary to … This also means that you have at least $100k to spend on salaries for each employee. Quality metrics in project management are benchmarking tools that help companies determine whether or not their project management efforts are effective. If you do meet these requirements, here are some of the top 11 project management metrics you can use to evaluate your performance: The PMBOK prioritizes Planned Value (PV), Earned Value (EV), and Actual Cost (AC) as three crucial metrics for measuring project performance. As a performance evaluation process for projects, organisation or Project Management Office (PMO) therein, should have KPIs defined for its team, projects, project managers, etc. hbspt.cta._relativeUrls=true;hbspt.cta.load(357601, 'deed2443-0f76-43ae-b426-a32993882029', {}); Filed Under Those in project and time management know that measuring is everything! Actual Cost is also called Actual Cost of Work Performed (ACWP). That is, it tells you the ideal value you should have realized if the project was going 100% on track. Instead, make a list of the top 5-10 metrics for your organization. Calculating Actual Cost is easy. It is imperative to keep track of performance metrics throughout the entirety of a project's lifecycle. Rather, pick only the metrics that impact your business, can be backed by real data, and can be measured accurately. Simple, practical, and relevant metrics are vital to implementing practical and sustainable project management practices and processes in any organization. Although not strictly a project management metric, the AGI: FTE ratio is a powerful indicator of an agency’s health. Whatever else you might measure, it is crucial that you measure these three metrics at least. Point #3, however, is even more important. This, of course, doesn’t cover the entire gamut of project management metrics. This helps signal—and may even help measure—discrepancies in comparative analysis. Types of Software Metrics. Others indicate secondary factors such as risk. Thus, whenever you see a list of “must have” metrics (including this one), don’t just blindly start using it. But more importantly, you can use it to calculate other useful metrics as we’ll see below. Try using a tool like Workamajig which will show you all this data at a single glance. Citing specific examples and the metrics … In other words, the project is over-budget by $10,000. These two metrics are related to Schedule Variance and Cost Variance. Below is a brief list of the best metrics to keep track of for a project: How it helps: Actual Cost gives you a broad understanding of your expenses on a project. Thus, the designer has only 1,500 total billable hours. The following examples below will be you guide in selecting the appropriate Project Management … That is, most agencies used their mix of metrics. Privacy Policy. You’ll also learn the top 11 metrics every agency needs to track. you’re $10,000 behind schedule. There are two aspects to accurate measurement: For instance, if you’re trying to measure client happiness, simply asking clients whether they are satisfied with your performance gives you a poor estimate of performance. However, since you’re only using the resource for 80% of their available time, your actual realized rate is $80 (80% * $100). These two related metrics tell you how far the project has strayed from its estimated budget and schedule. Utilization rate tells you whether you have enough work for your people. A good project management tool should help you get this figure in seconds. Project Management, It is the comparison of billable vs. non-billable activities. A measure of the benefits vs. costs of a project. Now that you can identify 1o example of performance metrics, it is time to apply them to your project, client, or business. Realization rate can also be used to calculate the Realized Rate for each resource. However, keep in mind that broad appeal and approval may be easier when metrics focus on customers, with success defined from a business point of view. Indicates how much money you have spent on a project as to date. These are not particularly nuanced metrics (delays can be for any number of reasons outside your control), but they do a great job of helping you understand the project at a glance. While this is an obvious example of metrics that are irrelevant to a project (unless the unit being sold is an umbrella or weather insurance), other irrelevant metrics are collected for projects. Billable Utilization: This metric is the percentage of time you can bill to clients. A business with a 50% margin and profits of $10,000 is healthier than one with 5% margins and profits of $50,000. The Workamajig© name and the Workamajig© logo are the exclusive trademarks of Creative Manager, Inc. Creative Manager, Inc. is not affiliated with any other software applications that may have the “amajig" in their names... but we do love them all dearly. Project management metrics based on a budget would include: Expected vs actual budget: The profit margin for the project is assessed through this metric. I’ll cover project management metrics in detail in this guide. This is nothing but the realization rate multiplied by the resource’ billing rate. Any good project management tool should be able to tell you both these figures at a glance. Any project management system, however rudimentary it might be, throws up a lot of data. Next, you have to define your KPIs in a manner that gives them clarity and focus. Workamajig shows you the net profit, inside costs, labor hours, COGS and overheads for all projects and clients at a glance. How to Write the Most Compelling Creative Brief (with Examples). Embracing this data and using it in your PM strategy helps you in three ways: To realize these benefits, it’s crucial that you use the right approach to project management metrics. How it helps: Comparing Earned Value with Planned Value gives you a quick estimate of whether you’re behind or ahead of schedule. On the other hand, Realization Rate tells you if you’re using your resources profitably. Demos typically run for about an hour. 7. Compare your Planned Budget vs. Actual Budget at a given point in time. hbspt.cta._relativeUrls=true;hbspt.cta.load(203330, 'ce488942-7120-4287-beb3-4bc4fe5648c3', {}); Peter Drucker may have said it half a century ago, but the old adage still rings true: “If you can measure it, you can improve it.”. Developing meaningful PMO metrics for a project management dashboard is a challenge for many project management offices. The more effort it takes to measure something, the less you’re going to use it. Maybe project management isn’t divination, but there are some metrics that can help you plan better for the future. A survey by SoDA (Society of Digital Agencies) that covered 48 different metrics found that none of the metrics was used by all the surveyed agencies. A primary strength of BrightWork is its reporting capability, including a wide choice of configurable project management performance metrics … Since it focuses on billable hours, realization rate discounts all the time spent in training, administrative tasks, and in-house work. Before you can start measuring these metrics, make sure that your business has the infrastructure in place for accurate, consistent measurement. Realization rate is a more nuanced metric than utilization rate. Formal code metrics… Project metrics are important so a project manager can evaluate a project’s status and assess project team productivity and quality of deliverables. Return on Investment (ROI) is a widely used metric to show … Your Earned Value, therefore, would be $40,000 (40% * $100,000). A metric that can’t be explained by data is a poor metric. In project management, however, monitoring progress depends on more concrete data. At the micro level, metrics management means … the total hours worked for each resource out of all their available hours. Measure Project … If you bill the designer for 1,200 hours, you would have a realization rate of 80% (1,200 / 1,5000). Take Workamajig out for a spin today to see how its data-focused approach can transform your agency. The Right Approach to Project Management Metrics. How they help: Schedule and Cost Variance are crucial for getting a quick picture of the project’s status at any given time. You don’t have to use both SPI/CPI and SV/CV. The bigger this number, the better. There are tons of things you can calculate beyond these such as Net Promoter Score (NPS), Resource Capacity, etc. Keeping track of key performance indicators allows a more accurate understanding of project … It is a measure of the total billed hours vs the total available billable hours, expressed as a percent. Most healthy agencies have an AGI: FTE ratio of > $100,000. Workamajig shows you the Agency Gross Income for each client at a glance so you can easily tell who your top clients are. it does not differentiate between billable and non-billable work. Sylvia joined the Workamajig marketing team in ‘17 & with her background in graphic design & business, she’s an awesome addition. Examples of macro-level metrics include: number of successful projects, percentage of failed projects, and number of hours spent per project or program. This article looks at the 11 most important project management KPIs you need to track and why. This figure is a measure of how profitable each project is and can be calculated as follows: As you can imagine, the higher the margin, the healthier the agency. The two basic project management KPIs are “on time” and “on budget.” Simply put, your project has a deadline, and a budget. Sufficiently mature project management processes that produce reliable, consistent data. The formula for measuring PV can be given as follows: Thus, when a project starts, its Planned Value is always equal to its Budget at Completion (BAC). Essentially, they measure the same things - whether the project is following its schedule and budget - but express it as a ratio, not an absolute figure. All rights in this website and our software are reserved. You can calculate it as follows: This is a “raw” metric, i.e. For example, a resource has a billing rate of $100/hour. Even if you don’t have any billable work for them, it’s better to get them to work on in-house projects or training to upgrade their skills. For example, an on-time delivery rate or the rate of meeting SLA. Keeping track of key performance indicators allows a more accurate understanding of project status, success, and profitability. If this figure is low, it means that your resources are spending way too much time sitting idle. There are project management KPI … It is based on the work you’ve already done, not the work you should have done. Note that Earned Value is sometimes also called Budgeted Cost of Work Performed (BCWP). ZilicusPM has more than seventy (70+) KPIs for project managers to check health of the project… What might be a key metric for a Fortune 500 company will be entirely useless for a 10-person boutique agency. Measuring and monitoring project management metrics fills this gap. Strategy, Author Ask whether it is pertinent to your business, its current situation, and its short and long-term goals. For instance, if you make $1,000,000 in AGI and have 10 full-time employees, your AGI: FTE ratio is $100,000. Ambiguity is great in your summer blockbuster, but in project management metrics, it just leads to inconsistent analysis. You can calculate it as follows: Just like SPI, a ratio > 1 means that the project is under-budget, while a ratio < 1 means that you’re over-budget. For one, profit is an absolute figure, which is not only difficult to grasp at glance, but is also misleading. quantifiable value expressing the business performance in a shorter time-frame level You might have a month where you make $100,000 in profits, but your margin is just 1%. We'll be in touch to find a time that works for you, 11 Critical Project Management Metrics Every Agency Needs to Track, survey by SoDA (Society of Digital Agencies), 35 Team Building Activities Your Team Will Actually Love. Pertinent to your organization and its current goals, The metric you’re trying to measure must be consistent and predictable, The tools you’re using to measure the metric must have a low error rate. More importantly, Earned Value is used to calculate a host of useful metrics such as Schedule Variance, Cost Performance Index, etc. Most agencies follow this best practice. Helps you demonstrate performance - a particularly important benefit for project and account managers. The formula for measuring it is as follows: If the result of the above calculation is positive, it means that you’ve earned more value than planned, i.e. Check out these 10 examples of key performance metrics that every project manager can't afford to miss. An SPI ratio > 1 means that the project is ahead of schedule, An SPI ratio < 1 means that the project is behind schedule, An SPI ratio = 1 implies that the project is exactly on schedule. Effective metrics are necessary to improve project management and delivery, and can demonstrate year-over-year gains in project management maturity. Resource utilization —a measurement of how much time team members are spending on the project—is another of the most important metrics in project management. Management metrics are measurements of the objectives of managers. Project management metrics examples Program management metrics examples. They both tell you the same thing, but in different formats. Workamajig’s built-in reports automatically calculate all these metrics. Calculating gross profit margin is a better metric than simply calculating profit. In contrast, your Planned Value is $50,000, i.e. If you can’t measure or understand it, it’s not going to help you run better projects. Can this data be reviewed and the result replicated? You can calculate it as follows: For example, a project with an Earned Value of $50,000 and Actual Costs of $60,000 would have a CV of -$10,000. Including costs from time and materials that have been charges or are scheduled. The SMART framework front-loads work to the planning stage, but once these criteria are agreed, you have a clear roadmap for the metrics you measure throughout the rest of the project. See the platform in action, ask as many questions as you'd like, and discuss your specific needs with our friendly and knowledgable sales team. For example, a project with a budget of $100,000 has a duration of 12 months. You can reach her by sending an email to sylviam@workamajig.com. Billable hours reflect your employees’ time spent specifically on revenue-generating activities (i.e., project tasks). How it helps: Planned Value isn’t particularly useful by itself. If both these figures are positive, you know that the project is ahead of schedule and under-budget. What’s “good” for one client might be “excellence” for another. A way to accurately collect and analyze data. Project metrics are techniques for measuring a project. A low realization rate means that your employees are spending way too much time in training, admin tasks, or in-house projects. A tool like Workamajig that automatically measures so many data points is of great help. If it is negative, you’re behind, and if it is 0, you’re exactly on time. It’s important to be deliberate about choosing project management metrics. Instead of a subjective understanding of your agency’s health, these KPIs (Key Performance Indicators) tell you exactly how business, its projects, and its people are doing. Project management is riddled with complications. Keep definitions of KPIs and m… Helps you measure, monitor, and understand the maturity of your organization’s processes. Danielle Richards Project Management KPIs Examples. For that reason, it’s important to tailor metrics and reporting to your business’s unique needs. While Planned Value tells you the scheduled value of the project, Earned Value gives you the actual value. 100,000 in profits, but in different formats calculated on an ongoing basis to provide management with information can..., tells you how much money you ’ ll learn the top 5-10 metrics your. Practices and processes in any organization his 2,000 available hours has a scheduled period 12... 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