What are the performance metrics for managing projects?

How do organizations measure project and project management performance? Is it based on a customer satisfaction survey or is there more to it? Is it enough to measure the performance of a given project or should we also measure the organizational performance in delivering projects?

This is a chapter in the book that we are finalizing at this time.

Performance Management

Introduction

Performance management is part of project management and control. It can have various dimensions, but in the context of this book, the discussion is limited to project metrics, the key performance indicators that the Prime Minister Office[1] and the Integrated Project Management Team (IPMA)[2] will use throughout the project to ensure that the project progresses on the right track leading to its successful delivery and realizing the expected benefits.

Project versus Stage

Like almost everything else in this book and the CAM2P™ methodological approach, project performance metrics are also at various levels, in particular, the project and stage levels. What is discussed here is project metrics but some will apply at the stage level.

Project versus Organization

On the organizational level, it is important to consider projects and their performance – as stand alone initiatives. This is necessary to ensure that the team deliver the project and manage success. However, projects, at least from the Project Owner’s perspective, are part of the ongoing programs and portfolios, consequently one must view projects’ performance in relation to the organizational projects’.

Organizational project management systems must be built to be sustainable. Sustainable OPM System requires the ongoing and continual improvement, which comes from the various planned and delivered projects. OPM Maturity depends on this ongoing feedback and an organization cannot achieve higher level of mature project management practices without the proper performance assessment at all levels.

An essential part of any the organizational project management system is establishing and updating the performance metrics used on projects.

Based on this discussion, there are metrics to use on any given project. Further, at the organizational level, there will be other metrics that would report on the performance of all projects (and programs) within the organization; this is the OPM System performance.

Sample Project

Some of the metrics on the Integrated City Project could be managed by the various contractors for their own work. However, the Integrated Project Management Team must require those metrics (at least some of them) to be shared with the contractors’ reports.

Other metrics will be managed directly by the integrated project management team.

Project Metrics

It is outside the scope of this book to cover metrics in details; there are other references to this work. What is listed here is just for illustration purpose and to trigger the reader to think about the possibilities.

The sections below show some of the metrics and performance indicators that can be used to support the measurement of project success, the four dimensions. The metrics are listed here, but project success discussion is left to the next chapter.

One last comment, many of these indicators might be meaningless on their own and should be compared to organizational or industry benchmarks.

Product Development Indicators

In general, most indicators here will be technical and related to the standards and specifications as outlined in the Project Requirements Document and updated in the preliminary engineering stage.

  • Number of waivers to specifications approved.
  • Number of waivers requested.
  • Number of issues not resolved at handover.
  • Number of major defects (or below optimal solutions) that had to be accepted.
  • Customer satisfaction rating at final acceptance.
  • Number of design errors.
  • Front End Loading / Project Definition Rating Index (PDRI)[i].
  • Number of lessons learned identified (related to product development).

Project Management Indicators

In order for these project management indicators – metrics to be effective one needs to reflect on the earlier discussion and view them in isolation (for the project) and in comparison to the organizational benchmark, performance of other projects in the system.

  • Variance at completion in term of cost (within established limits).
  • Variance at completion in term of schedule (within established limits).
  • Percent of hours (cost/time) spent on rework.
  • Percent of hours (cost/time) spent on changes.
  • Percent of hours (cost/time) spent on issues.
  • Percent of hours (cost/time) spent on occurred risks.
  • Percent of project team turnovers.
  • Number of project requests for clarifications issued.
  • Number of estimating errors.
  • Claims index.
  • Percent of work packages over or under the budget/ schedule control
  • Cost and schedule performance indices.
  • Project management index (project management cost as a percent of total estimated cost).
  • Variances from the Class 1 to Class 2 Estimates and from the Class 2 to Class 3 Estimates.
  • Actual cost of contracts over budgeted costs and awarded values.
  • Number of risks identified and their split in term of how they were grouped or prioritized.
  • Categories of changes.
  • Source of changes.
  • Number of lessons learnedidentified (related to project management)

General Project Indicators

These indicators and metrics are related to project authorization.

  • Was the project delivered with product and project management success?
  • Did the project deliver all of the set requirements as defined in the project authorization?
  • The rating of customer satisfaction.
  • The rating of management satisfaction.
  • The rating of team satisfaction.
  • Safety, health, and environment performance indices.
  • Sustainability index.
  • Number of lessons learnedidentified (general).

Project Objectives Indicators

  • Did the project deliver on the expected outcome?
  • Did the organization realized the benefits, per the established timelines?
  • Did the team identify issues with the Feasibility Study?
  • Number of lessons learnedidentified (related to the objectives)

[i] https://www.construction-institute.org/scriptcontent/more/rr113_11_more.cfm (Project Definition Rating Index (PDRI), 2015)

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[1] In the book this is the organization that is leading the project and the investors for the Integrated City Project; the subject of the book.

[2] The Integrated Project Management Team is the team managing the project.