Measuring performance of any activity or task is essentially done to identify whether it is adding any value to your goal or not. This can be better understood by the example of arranging an event or building a house.
In case of arranging an event, we manage logistics, contractors, and direct workers. Mostly, the objective of an event arrangement is ‘attendee’s satisfaction’ in line with the budgeted price. To achieve the desired goal, we keep a check on each aspect of the event, including verifying all materials used, communicating regularly with contractors to get the best work done at the estimated price and so on. While juggling with all this, we keep a tab on our planned budget, and schedule and compare it with actuals. Comparison of such key performance metrics provide direction and control and help us answer significant questions such as Where are we? How much have we spent? Are we over-budget? etc.
Same is true for any project, measuring performance is as important as the project. The success of project directly or indirectly depends on good project performance scores.
Measuring project performance while it’s in the execution phase is the best way to keep an eye on performance aspects. It not only gives reasonable room to take corrective actions but also increases your chances of project success.
Now the major question is, what should be measured? Choosing measures which help in decision-making and insight alignment to organization objective is the key. For effective performance measurement following points must be considered:
- The measure should inherit from organization goals.
- Insight on how well the project has met its objectives.
- When detailed project planning is done at the beginning of planning phase, a baseline of this plan should be saved so that you may compare planned vs actuals.
- Performance measurement tracking rhythms should be set either weekly or fortnightly so that insight can be gained on the timely basis and corrective actions can be taken if needed.
- Know the difference between measuring the performance of team versus project. When team’s performance is measured, the impact of team’s performance on organization goal is measured. Whereas when project’s performance is measured, the impact of the project on organization goal, at a fixed period is measured.
‘What to measure?’ depends on a lot of factors such as who will use the measures and what decision they would make using this. In general, following are the key project performance measures:
(i) ROI (Return on Investment)
(iii) Cost of quality
(iv) Cost Performance
(v) Schedule Performance
(vi) Customer Satisfaction
(vii) Project Cycle time
(viii) Alignment to strategic business goal