Try using a tool like Workamajig which will show you all this data at a single glance. 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. If there is a metric to rule them all in project management, it has to be project gross profit margin. 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. In contrast, gross margin tells you how much of your revenue you’re spending in servicing that revenue. Examples of macro-level metrics include: number of successful projects, percentage of failed projects, and number of hours spent per project or program. Of course, the agency’s location and business focus affect this metric, but $100,000 is a good baseline to aim for. Some ways to measure the success of a project include asking how well the project … It’s not enough to measure things; you must also measure the right things in the right way. How it helps: Actual Cost gives you a broad understanding of your expenses on a project. 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. In other words, the project is over-budget by $10,000. 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. In contrast, your Planned Value is $50,000, i.e. Workamajig shows you the Agency Gross Income for each client at a glance so you can easily tell who your top clients are. Each project manager typically has different objectives, and metrics that work well for one business might not work for another. Keep definitions of KPIs and m… Formal code metrics… This article looks at the 11 most important project management KPIs you need to track and why. Billable hours reflect your employees’ time spent specifically on revenue-generating activities (i.e., project tasks). If your priority is raising revenue, for instance, focus on sales metrics, not operations-focused metrics like utilization rate. They are commonly used to measure the value created by a manager for purposes such as performance management.Management metrics may also be used to accomplish management … You’ll learn the right approach to use when measuring project performance. Measuring Planned Value is easy. 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. Project management metrics examples Program management metrics examples. Can this data be reviewed and the result replicated? The bigger this number, the better. Others indicate secondary factors such as risk. Measures how much ahead or behind of planned budget your project is running. Actual Cost is also called Actual Cost of Work Performed (ACWP). Project management metrics based on a budget would include: Expected vs actual budget: The profit margin for the project is assessed through this metric. Management metrics are measurements of the objectives of managers. The difference between the Earned Value and Planned Value. While Planned Value tells you the scheduled value of the project, Earned Value gives you the actual value. You can make the entire measuring process much easier by using a data-focused project management system such as Workamajig. 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. hbspt.cta._relativeUrls=true;hbspt.cta.load(357601, 'deed2443-0f76-43ae-b426-a32993882029', {}); Filed Under You can calculate it as follows: This is a “raw” metric, i.e. For example, a resource has a billing rate of $100/hour. For example, a project with a budget of $100,000 has a scheduled period of 12 months. However, when combined with other metrics (see below), it can tell you a lot more about your project performance. How it helps: Comparing Earned Value with Planned Value gives you a quick estimate of whether you’re behind or ahead of schedule. Project metrics are important so a project manager can evaluate a project’s status and assess project team productivity and quality of deliverables. You can create reports on the fly to understand exactly how each project and your entire agency is doing. These two related metrics tell you how far the project has strayed from its estimated budget and schedule. This data can be subjective or objective, individual or team-focused, project-wide or organization-wide. Remember to choose a handful of KPIs to benchmark and no more than seven. Instead, make a list of the top 5-10 metrics for your organization. Utilization rate is expressed as a percentage. There are a lot of Project Management KPIs present under the four KPI classifications, all serve different functions, system, and methods. 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. Trying to measure everything will just leave you confused and overwhelmed. Also referred to as: Actual Cost of Work Performed (ACWP). Danielle Richards 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. 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. You’ll learn the right approach to use when measuring project performance. 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. The estimated cost for your project activities planning/scheduled as of reporting date. It’s a good idea to calculate the gross profit margin for individual projects, clients, and resources. You can reach her by sending an email to [email protected] How they help: Schedule and Cost Variance are crucial for getting a quick picture of the project’s status at any given time. This is nothing but the realization rate multiplied by the resource’ billing rate. Developing meaningful PMO metrics for a project management dashboard is a challenge for many project management offices. That is, it tells you the ideal value you should have realized if the project was going 100% on track. This also means that you have at least $100k to spend on salaries for each employee. 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.”. The cost of generating revenue at your business. Utilization is typically … Although not strictly a project management metric, the AGI: FTE ratio is a powerful indicator of an agency’s health. A way to accurately collect and analyze data. Here are some additional tips: 1. It is imperative to keep track of performance metrics throughout the entirety of a project's lifecycle. This is all the more true for project management where you’re usually dealing with a mix of hard and soft data. For one, profit is an absolute figure, which is not only difficult to grasp at glance, but is also misleading. 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. Now that you can identify 1o example of performance metrics, it is time to apply them to your project, client, or business. Billable Utilization: This metric is the percentage of time you can bill to clients. Total Utilization: This metric measures the percent of time your employees spend on any productive work, including business development and proposal-writing. How it helps: Planned Value isn’t particularly useful by itself. Check out our recent ebook, Project Management. 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. Meeting both are the time-tested project management metrics … But more importantly, you can use it to calculate other useful metrics as we’ll see below. This allows you to identify if the project is running over or under the expected baseline that was originally forecasted. Measuring and monitoring project management metrics fills this gap. Simple, practical, and relevant metrics are vital to implementing practical and sustainable project management practices and processes in any organization. Quality metrics in project management are benchmarking tools that help companies determine whether or not their project management efforts are effective. At the same time, your choice of metrics should be limited in their scope. Workamajig shows you the net profit, inside costs, labor hours, COGS and overheads for all projects and clients at a glance. It is the comparison of billable vs. non-billable activities. Realization rate can also be used to calculate the Realized Rate for each resource. Billable utilization is a critical concept for firms that make money by billing out resources (people) to customers. Types of Software Metrics. Also referred to as: Budgeted Cost of Work Scheduled (BCWS). … Before you can start measuring these metrics, make sure that your business has the infrastructure in place for accurate, consistent measurement. These metrics include productivity, customer satisfaction, and cycle time. ©2021 Creative Manager Inc. dba Workamajig. Utilization rate is a measure of the utilization of your resources, i.e. You might have a month where you make $100,000 in profits, but your margin is just 1%. Effective metrics are necessary to improve project management and delivery, and can demonstrate year-over-year gains in project management maturity. Subtract the actual budget spent from the estimated budget set at the beginning of the project. There are project management KPI … 5 Critical Metrics for Project Management. 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. Only measure it if the answer is a resounding ‘yes’. Point #3, however, is even more important. On that note, let’s look at some of the top project management metrics agencies usually measure. Project … 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. For instance, a designer might have 2,000 available hours. I’ll cover project management metrics in detail in this guide. Similarly, Cost Variance (CV) tells you whether the project is on, over, or under-budget. Rather, pick only the metrics that impact your business, can be backed by real data, and can be measured accurately. If you can’t measure or understand it, it’s not going to help you run better projects. A good project management tool should help you get this figure in seconds. 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). ZilicusPM has more than seventy (70+) KPIs for project managers to check health of the project… KPIs in project management are a great way to keep a project on track using concrete data. Before you select your metrics, ask: Is there data to back this result? This helps signal—and may even help measure—discrepancies in comparative analysis. Any metric you measure should be clearly and accurately measurable. Far too many agencies fall into the trap of measuring metrics that are irrelevant to their business at that particular moment. Demos typically run for about an hour. Keeping an eye on these KPIs is essential to know if your project is on track. But for most agencies, these 11 metrics are a good place to start. Your goal should be to maximize your realization rate as much as possible. Strategy, Author Approximation of how much time you are behind or ahead of the approved project schedule. Including costs from time and materials that have been charges or are scheduled. Citing specific examples and the metrics … Take Workamajig out for a spin today to see how its data-focused approach can transform your agency. Realization rate is a more nuanced metric than utilization rate. 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. A metric that can’t be explained by data is a poor metric. I’ll cover project management metrics in detail in this guide. Expenses are calculated against the revenue at the end of a critical point of the project… Next, you have to define your KPIs in a manner that gives them clarity and focus. There are tons of things you can calculate beyond these such as Net Promoter Score (NPS), Resource Capacity, etc. The measure of how team members are spending their time while working on a project. It is a measure of the total billed hours vs the total available billable hours, expressed as a percent. SV tells you whether the project is ahead or behind schedule. Indicates how much money you have spent on a project as to date. How to Write the Most Compelling Creative Brief (with Examples). For example, if you’ve spent $10,000 on salaries and $10,000 on materials in a $100,000 project, your Actual Cost is $20,000 ($10,000 + $10,000). All you have to do is add up the money you’ve spent so far on the project. In project management, however, monitoring progress depends on more concrete data. Jun 17, 2019. Project Management, Your Earned Value, therefore, would be $40,000 (40% * $100,000). READ MORE on checkykey.com Program metrics examples Keeping your dashboard clearly defined will allow you to fully concentrate, keep your budget in line and focus on the high level metrics … Utilization rate tells you whether you have enough work for your people. They both tell you the same thing, but in different formats. What might be a key metric for a Fortune 500 company will be entirely useless for a 10-person boutique agency. Also referred to as: the indicator of the project’s cost efficiency. The more effort it takes to measure something, the less you’re going to use it. If SPI is >1, the project is ahead of schedule. If it is negative, you’re behind, and if it is 0, you’re exactly on time. Pick whichever is easier for you to understand and retain it throughout the project. This is the approved budget for all the performed project costs and activities completed by a specific date. You don’t have to use both SPI/CPI and SV/CV. These two metrics are related to Schedule Variance and Cost Variance. 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. You’ll use this to figure out whether you’re a) measuring correctly, and b) performing up to your own expectations. What is WBS (Work Breakdown Structure) in Project Management? After 6 months, 50% of the project’s time has elapsed. Thus, the Planned Value of the project at 6 months would be $50,000 (50% * $100,000). Most healthy agencies have an AGI: FTE ratio of > $100,000. Keeping track of key performance indicators allows a more accurate understanding of project … A tool like Workamajig that automatically measures so many data points is of great help. If you bill the designer for 1,200 hours, you would have a realization rate of 80% (1,200 / 1,5000). Think of it as a baseline KPI that you’ll reuse to measure several other more important metrics. Your project management metrics are used to compare performance over time. It is based on the work you’ve already done, not the work you should have done. The two basic project management KPIs are “on time” and “on budget.” Simply put, your project has a deadline, and a budget. Project metrics are techniques for measuring a project. 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. 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. However, since you’re only using the resource for 80% of their available time, your actual realized rate is $80 (80% * $100). Thus, whenever you see a list of “must have” metrics (including this one), don’t just blindly start using it. 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. Return on Investment (ROI) is a widely used metric to show … You only have to consider the total budget allocated for the project and the project’s completion rate. If both these figures are positive, you know that the project is ahead of schedule and under-budget. AGI: FTE, thus, tells you how much money you’re bringing in for each full-time employee in your business. Margin will always be a percentage and is the percentage of each dollar earned after costs have been subtracted. Check out these 10 examples of key performance metrics that every project manager can't afford to miss. A low realization rate means that your employees are spending way too much time in training, admin tasks, or in-house projects. For instance, if you make $1,000,000 in AGI and have 10 full-time employees, your AGI: FTE ratio is $100,000. Workamajig’s built-in reports automatically calculate all these metrics. At just under 5 feet, Sylvia is a living testament to the adage that good things come in small packages. For example, an on-time delivery rate or the rate of meeting SLA. Helps you manage resources and projects better. How they help: Both utilization and realization rates are crucial for understanding how well you’re using your resources. Of these, 200 hours are scheduled for training, while another 300 are scheduled for in-house work. You’ll also learn the top 11 metrics every agency needs to track. More importantly, Earned Value is used to calculate a host of useful metrics such as Schedule Variance, Cost Performance Index, etc. For example, a project with a budget of $100,000 has a duration of 12 months. If a change occurs to trigger a warning metric, for example. The Right Approach to Project Management Metrics. That is, most agencies used their mix of metrics. Even if it is accurately measured, it only tells you the effect, not the cause. Also referred to as: >Budgeted Cost of Work Performance. Let’s look at Schedule Variance (SV) first. Sylvia joined the Workamajig marketing team in ‘17 & with her background in graphic design & business, she’s an awesome addition. Keeping tabs on project management metrics is crucial for optimizing your agency. Ambiguity is great in your summer blockbuster, but in project management metrics, it just leads to inconsistent analysis. A designer spending 10 hours on a client project and 10 hours on administrative tasks both come under the same category. 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. Keeping track of key performance indicators allows a more accurate understanding of project status, success, and profitability. This metric allows you to see all the work that has been done, and at what budget it was completed. A primary strength of BrightWork is its reporting capability, including a wide choice of configurable project management performance metrics … Compare your Planned Budget vs. Actual Budget at a given point in time. Actual Cost is the third of the baseline metrics alongside PV and EV. Regardless of what industry or space you’re in, there are certain metrics set in stone. Below is a brief list of the best metrics to keep track of for a project: They are typically calculated on an ongoing basis to provide management with information that can be used to direct and control projects. you’re $10,000 behind schedule. A measure of the benefits vs. costs of a project. Project management metrics are specifically used to describe how we can find out how successful a project was. 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. Note that Earned Value is sometimes also called Budgeted Cost of Work Performed (BCWP). Your target utilization rate will vary based on your businesses and roles within those businesses. Ask whether it is pertinent to your business, its current situation, and its short and long-term goals. you’re ahead of schedule. All rights in this website and our software are reserved. Helps you measure, monitor, and understand the maturity of your organization’s processes. Any project management system, however rudimentary it might be, throws up a lot of data. Choosing which project management KPIs to track and measure is only the first step. You’ll also learn the top 11 metrics every agency needs to track. For that reason, it’s important to tailor metrics and reporting to your business’s unique needs. After 6 months, you realize that only 40% of the project is completed vs the estimated 50%. Calculating Actual Cost is easy. Any project management … Select these carefully so that they cover only the parts of the business you care about. An insight into the delivery timeline for your 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. In the former case, you have much more leeway to grow. A list of common management metrics. Similarly, Cost Performance Index (CPI) helps you evaluate how the project is faring in terms of its budget. Any good project management tool should be able to tell you both these figures at a glance. A business with a 50% margin and profits of $10,000 is healthier than one with 5% margins and profits of $50,000. Project Management KPIs Examples. 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. Project metrics are a useful way to track progress against key. Privacy Policy. Similarly, the metric that’s right at the start of the project won’t be as useful at the end. It’s important to note that this metric focuses on the scheduled value, not the actual value. KPIs let you examine your project’s progress in real dollars, hours, or whatever unit is necessary to … You can compare Planned Value with other KPIs to determine if you are running ahead or behind schedule on a project. 9/19/17 1:13 PM, 10 Performance Metrics Examples Project Managers Can't Afford to Miss, 16 Project Metrics You Should Be Tracking, Proven Project Management Techniques from 50 Project Management Experts, 35 Essential Resources for Project 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. You don’t have to use them all, but this list is a good place to start. 7. This is a measure of the actual expenses incurred in completing all of the work done to date. A baseline for performance, including industry benchmarks. It is imperative to keep track of performance metrics throughout the entirety of a project's lifecycle. Don’t just pick to measure anything - even if it’s standard for the industry. If SPI <1, the project is behind. If the benefits exceed the cost, you have a positive ROI. Thus, an employee who works 1,500 hours out of all his 2,000 available hours has a utilization rate of 75%. It’s important to be deliberate about choosing project management metrics. Calculating gross profit margin is a better metric than simply calculating profit. On the other hand, Realization Rate tells you if you’re using your resources profitably. the total hours worked for each resource out of all their available hours. 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. This can help you zero in on your most profitable people and projects. Helps you demonstrate performance - a particularly important benefit for project and account managers. it does not differentiate between billable and non-billable work. Maybe project management isn’t divination, but there are some metrics that can help you plan better for the future. Enhancing operations requires a in-depth understanding of the metrics you need to keep track of to keep your business afloat. 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. This, of course, doesn’t cover the entire gamut of project management metrics. Utilization and realization rate are two closely related metrics that track how well you’re using your resources. Thus, the designer has only 1,500 total billable hours. Whatever else you might measure, it is crucial that you measure these three metrics at least. Like Planned Value, think of it as a baseline metric you must calculate for all projects. Sufficiently mature project management processes that produce reliable, consistent data. Those in project and time management know that measuring is everything! 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. Project management metrics related to costs can prove the value of a team. quantifiable value expressing the business performance in a shorter time-frame level This should include everything from salaries to software purchases. What’s “good” for one client might be “excellence” for another. 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. Most agencies follow this best practice. 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. 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. Since it focuses on billable hours, realization rate discounts all the time spent in training, administrative tasks, and in-house work. The following examples below will be you guide in selecting the appropriate Project Management … If this figure is low, it means that your resources are spending way too much time sitting idle. Measure Project … Most project metrics indicate if a project is on schedule and budget. Living testament to the adage that good things come in small packages this, of,! 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Promoter Score ( NPS ), resource Capacity, etc ( i.e., project tasks.! Whether the project and the result replicated for the industry relevant metrics are a good to! Is imperative to keep track of performance metrics throughout the entirety of a.. Only 40 % * $ 100,000 development and proposal-writing scheduled ( BCWS ) time you can compare Value. Given point in time you guide in selecting the appropriate project management a. Entirety of a project on track using concrete data it tells you how much ahead or behind on... Ratio is $ 100,000 ) place to start course, doesn ’ t cover the gamut. Baseline metrics alongside PV and EV and Planned Value with other KPIs to track and measure is only the of... Worked for each client at a glance won ’ t cover the entire measuring process much easier using! Business development and proposal-writing Index, etc their time while working on a project, including business development and.! Your most profitable people and projects ‘ yes ’ objectives of managers backed... ( CPI ) helps you demonstrate performance - a particularly important benefit for management. 12 months vs. costs of a project 's lifecycle 11 most important project management metrics months, 50.... Start measuring these metrics, it just leads to inconsistent analysis budget schedule. Other hand, realization rate multiplied by the resource ’ billing rate meeting.