Tracking Key Performance Indicators (KPIs) is essential during a project because they allow you to see your progress towards your goals. Not only do they solidify project responsibility, but they reflect the project’s organizational concept.
Sometimes in project settings, you only have a handful of measurable, short-term, time-bound, and specific objectives to track against, and KPIs come in handy with these.
Any project usually has teams with different tasks to accomplish and roles to play, and they all work simultaneously to support the KPIs in their way.
So, how do you track KPIs? Below is a guide on five steps that you can use to set and track key performance indicators on your project.
Step 1: Define your KPIs
The first step is to ensure you put metrics in place to help you measure the goals of your project. These should be relevant for the entire life of your project. If not, ensure that the KPI you will use will be used for a defined period.
Make it easy to capture the data and if you haven’t established a way of collecting data, set it up first. Data captured will help you measure performance, giving you something solid to report with.
For instance, you can measure hours spent on a project task against the estimated time. If it is proving difficult for your team to measure the time, you can use a low effort and better approach to measure the same thing. Below are generic examples that you can transform for your project.
- Cycle time
- Customer satisfaction
- Resource costs per month
- Cost performance
- Schedule performance
- Process efficiency
- Quality measures
The project manager officer may have a standard list of KPIs to make it easy for them and regularly used on projects.
Step 2: Set measures and targets
The formula of SMART goals should be used for KPIs. They include:
Make sure your KPIs are tailored in a way that makes them applicable with the SMART format. Set specific goals for your project and set reasonable targets for each item to end up being measurable.
Targets have no rights or wrongs, and so long as the project sponsor or stakeholders are happy with the targets you have defined for them, then you are good to go. However, it is important to choose sensible measures for your project, and projects vary from one industry to another.
For instance, some projects for some industries may have a target of 50%, and this might be acceptable, whereas having a 50% target for a high-performance race car might not work.
A general rule thumb for setting measures and targets is setting upper and lower limits so that you can track your KPI using colors.
- Red is the danger zone.
- Amber is average
- Green is excellent
It is important to explain measures to know what they mean, when, and how they will be calculated.
Step 3: Start tracking.
You have the green light to start tracking your KPI. Documenting the KPIs enables everyone in the team to know what the target is. It is also crucial to explain why KPIs are essential for the team and why you should capture a particular set of KPIs.
Using your project management software, update and automate it since gathering data manually is time-consuming and tedious.
Step 4: Publish the KPI measures
After getting your first KPI results, you can publish them and share them with the project team. This will enable you to share them with the stakeholders. It is important to note that the results will not be good the first few times you measure and track against your KPIs. However, you will encourage the teams to improve what you measure over time by shining light on the performance.
Step 5: Track results on an ongoing basis
KPIs are characteristic of trends, and it is vital to compare last month’s results against the current month’s data set. This can be daily, weekly, fortnightly, or yearly too. Carefully check the results so that you can establish consistent trends over time.
Use the data from your project to get a clear picture of your performance, which helps determine your project’s progress. The trends will enable you to access your project’s performance.
Now that you know how to track your KPIs on your project, use the information to make smart decisions and take your project forward. What are you waiting for? Take your project up by improving your efficiency and performance using your KPIs.
Ray Brosnan is the co-owner of Brosnan Property Solutions. He has helped many businesses with their project management needs. One of Ray’s roles is setting KPIs for these projects.