Critical Project Management KPIs You Should Be Tracking
- Project Management

Critical Project Management KPIs You Should Be Tracking

There should be no doubt that project management can entail great challenges. From scope definition to final timelines and beyond, there are often too many variables to remain on point. Because of this, project management hinges strongly on the manager’s ability to consistently and meaningfully keep track of progress. However, all these variables produce different KPIs with different significance, relevance, and actionable potential. As such, it’s vital to distinguish critical project management KPIs from secondary ones and prioritize the former.

Why is tracking KPIs important?

In simplest terms, tracking KPIs is essential simply because it allows you to track success. However, the longer answer is only slightly more complicated; tracking KPIs is integral to project management from the very foundations.

SMART goals, as defined by UCOP and marketers, are pretty universal in their definition:

  • Specific, as goals are direct and phrased in as specific terms as possible
  • Measurable, setting quantifiable goals which can be measured during and after the project
  • Attainable, as goals are realistically achievable given one’s resources and tools
  • Relevant, setting goals with broader benefits that align with one’s overarching mission  
  • Timely or time-bound, setting clear deadlines and time-sensitive milestones

To follow this type of goal-setting, tracking KPIs is imperative. For one, it allows for goals to be measurable and offers insights into post-deadline shortcomings. Neglecting this is among the most common mistakes that lead to project failure.

Incidentally, the DUMB technique – which spells out the inverse of “smart” but serves the same goals – also hinges on KPIs: 

  • Doable, which aligns with SMART’s “attainable.”
  • Understandable, which mostly aligns with “specific” and “timely.”
  • Manageable, which combines “measurable” with “attainable.”
  • Beneficial, which largely aligns with “relevant.”

As such, no matter which way you go, having critical project management KPIs as actual metrics to gauge success is a necessity. 

Types of project management KPIs

Now, approaching KPIs might best be done on a category basis. Depending on the project, there can be an abundance of possible KPIs of different types to track. Understandably, tracking them all is nigh impossible and, in many cases, not entirely productive. Gartner says, “if you’re tracking everything, you’re not paying attention to anything.”

In brief, KPIs largely fall under one of four main types:

  • For example, budget KPIs include budget variance, planned value, cost performance index, etc. 
  • Timeline KPIs, or “timeliness” KPIs, include cycle time, time spent, resource conflict year-over-year, and so on.
  • Effectiveness KPIs include billable hours, the average cost per hour, the number of change requests, etc.
  • Quality KPIs are primarily qualitative and include customer loyalty, complaints, satisfaction, NPS, etc. However, this type may also entail quantitative data, such as employee churn rates.

There may be some disagreement on exact naming conventions or category contents, but there’s a consensus on the above. Each of these four types focuses on a distinct aspect of project management, gauging specific qualities and attributes accordingly. Thus, no type should be discarded entirely, as doing so would likely create a measuring blind spot. 

Critical project management KPIs you should be tracking

Not all metrics are equally valuable in themselves. Not all hold the same value for different projects, and not all are as readily available. For example, calculating resource profitability requires both the Average Cost Per Hour and billing rates to deduce, which not all project managers may have available.

Still, there are plenty of KPIs of different types which have near-universal, mostly uncontested value. So, always consider the following examples across all four types with your unique project’s metrics, needs, and goals in mind.

#1 Budget KPIs

True to their name, budget KPIs seek to measure budget allocation effectiveness and weigh budget choices. Notable KPIs here include:

    • Budget creation cycle time. This will allow you to measure how long it takes to formulate a project’s budget, from initial research and planning to the final agreement. You may also track budget revision cycle time for additional insights over time.
    • Working capital. A valuable metric to measure your ability to meet short-term costs and project obligations. You may measure this by subtracting current liabilities from current assets.
    • Planned value. This measures the planned costs of the remainder of a project. To extract this metric, multiply the total task budget by the percentage of the project remaining.
    • Cost performance index. Finally, one of the most critical projects management KPIs to track is the measure of actual work completed versus actual cost incurred. To calculate this, divide the earned value by actual costs.  

Budget-related metrics can, of course, expand beyond those and are very rarely useless. As such, you may drill as far down as you feel appropriate and valuable for you.

#2 Timeline KPIs

Along similar lines come timeline KPIs, which help maintain a grasp on time efficiency and often help inform budget KPIs. Crucial ones among them include:

    • Cycle time. This metric measures the time needed to complete a specific task or activity and is typically more helpful for repeat tasks.
    • Resource capacity. A helpful metric early in the planning and over time measures the total available hours to complete a given task or project. Multiply the number of employees by their available time to extract this number.
    • On-time task completion rate. A simple but valuable metric, this measures the efficiency of employees. First, divide the number of assigned employees who completed their tasks on time by the total number of employees, then focus on investigating time waste. 
    • The time you were spent. On its own, this metric measures how much time was spent on an individual task. However, you may juxtapose this with planned hours to uncover potential miscalculations and adjust completion time projections accordingly.

Timeline KPIs, too, are rarely insignificant – but the primary challenge lies in identifying the most useful ones for your project.

#3 Effectiveness KPIs

Alongside the above, effectiveness KPIs overlap with budget and timeline KPIs. In essence, they gauge cost-efficiency, profitability, and more – making them critical project management KPIs to keep in mind. Among the most valuable ones in this category are:

    • Billable hours or billable utilization. As the name suggests, this metric measures the percentage of hours that can be billed to a client. The distinction is between unbillable hours, such as administrative, organizational, and negotiating tasks, and billable hours on project-relevant, tangible, revenue-generating tasks. Subtract the former from the total hours to extract this.
    • Average cost per hour. Adjacent to both previous categories, this measures the total costs of every project hour, including salaries, equipment, and other costs. Multiplied by total planned hours and total actual hours, this can help inform projected costs.

You may then combine billable hours, billing rates, and the average cost per hour to deduce resource profitability. In addition, if your project hinges on multiple parts, you may track related metrics, such as return rates.

#4 Quality KPIs

Finally, there are quality KPIs, often dubbed “satisfaction” KPIs. As both names suggest, they measure the final perceived quality delivered and final customer satisfaction. The two main metrics to track in this regard are:

    • Net Promoter Score (NPS). A household name, Net Promoter Score, requires a single survey question from your customers; on a scale from 0 to 10, how likely are they to recommend you to friends or colleagues? Subtracting the percentage of detractors (0 to 6) from the percentage of promoters (9 and 10) yields the final Net Promoter Score. Employers can also use this to gauge employee satisfaction.
    • Customer Satisfaction Score (CSAT). A similar metric, gauging satisfaction beyond advocacy, comes in CSAT. Again, simple customer survey questions can reveal how satisfied they were with the overall experience. This, too, can become more focused, such as by distinguishing between customer experience and perceived product quality or see use in gauging employee satisfaction.

Qualitative metrics may not seem as robust as quantitative ones, like cycle time or average cost per hour, but they’re no less useful. A close eye on satisfaction can, at the very least, inform future projects – especially if it comes via direct, extensive feedback.

Conclusion

To summarize, there are ample critical project management KPIs to keep in mind. Of course, not all KPIs will apply to every project; return rates may be insignificant to smaller-scale, concentrated projects, for example. In addition, not all KPIs will be equally valuable to every project manager, as each project differs significantly from the next. Still, the above should likely stay on your mind during project management, which can often inform your course.


About the author

Dylan Jacobson is a freelance digital marketer, copywriter, and aspiring web designer based in Houston, TX. He’s a frequent contributor to MoversTech CRM, where he discusses customer insights collection and use toward meeting the relocation industry’s unique needs.

Critical Project Management KPIs You Should Be Tracking

close
Digital Marketing Strategies by Understanding eCommerce

Join the Club!

Every week, we'll be sending you curated materials handpicked to help you with Digital Marketing. 

Plus, you'll be the first to know about our discounts!

We don’t spam! Read our privacy policy for more info.