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KPIs for project management: A project manager’s guide to data-driven success

KPIs for project management: A project manager’s guide to data-driven success

10
min read

Measuring success is a key component of any project. Although project managers often spend much of their time planning projects, coordinating efforts among key contributors, and tracking task completion, it’s hard to truly pull off an impactful project without some clear goals and measures of success.

The practice of creating KPIs for project management involves identifying clear benchmarks to measure success. We’ll dive into what KPIs are, how to create effective ones, and how to use them to improve your project success rates. 

What are KPIs and why should I use them?

Each project has an overarching goal. Perhaps you’re adding a new video course to your website. Your overall goal may be to increase customer adoption of your product or service, but it’s difficult to know how your project is doing while you’re in the process – you haven’t even launched it yet!

Key performance indicators (KPIs) are data points that tell you if you are tracking towards success in your project. They help you measure success in more bite-sized, actionable pieces. 

Good KPIs will help you plan your work on the project and make it clear from the very beginning whether or not you’re making steady progress towards your goal. They’ll also help you understand if you need to course correct at any point throughout your project. When your project is complete, KPIs help you determine how successful it was as a whole.

So if your goal is to increase customer adoption with a video course, some of your KPIs might be around:

  • Lessons completed
  • Customer feedback or reviews of lessons
  • Budget for the project

To help understand why KPIs are important for project management, consider this analogy: When you begin a journey, you have a destination in mind. The destination is your goal. Along the way, you look for landmarks and you know approximately when you should pass those landmarks. These are your KPIs.

Missing a landmark by a specific time could mean that you are not going as fast as you thought you’d be going, or that you took a wrong turn. 

KPIs for project management are similar in this respect - they help guide your team to success in any project by letting you know if you are falling behind or need to reconsider a part of your plan.

What makes a good KPI for project management? 

You likely won’t be able to copy and paste a set of KPIs for project management off the internet and find that it perfectly suits your project. It’s important to understand how to create your own KPIs to provide clarity and offer direction as you work on your project.

Ideally, your KPI not only helps you measure the success of a completed project, but it also acts as a measuring stick throughout your project. 

You should be able to grade each KPI with a percentage – just like in school – to track your progress at any point during your project. To do this, you need to be very specific about which accomplishments indicate success in your project.

SMART KPIs

A good KPI for project management follows the SMART method:

  • Specific: Isolate a specific indicator for your project to avoid confusion or complication. As a rule of thumb, the more your KPI involves the word “and”, the less specific it is.
  • Measurable: You should be able to unambiguously assign a percentage grade to your KPI at any point throughout your project. This means your KPI needs to be based around a specific target number.
  • Achievable: Your KPI should be realistic. This is a fine needle to thread - if your KPI is unrealistic, it’s not going to give you any valuable insights. If it’s too easy to achieve, you’re leaving something on the table.
  • Relevant: Each KPI needs to tie to your overall goal. This may sound like a no-brainer, but this is what separates out vanity metrics from meaningful milestones. When evaluating a KPI, ask yourself how scoring 100% would help you achieve your overall goal.
  • Time-bound: Your KPIs would change a lot if you had a week to work on a project vs. an entire quarter. Make sure to set a specific timeframe for each KPI to help keep it achievable, and to indicate when you’ll grade the KPI for success.

Once you’ve drafted KPIs for your project, proof read for clarity to make sure they’re easy to understand. Next, review them with each team member involved in the project and make sure each person agrees on the KPIs. This not only helps you get everybody on the same page, but it keeps each person accountable for their role in the project.

Measuring input KPIs vs. output KPIs

Throughout your project, you’ll want to measure inputs and outputs. 

Inputs are the work you’re doing. For example, maybe you’re going to interview 20 customers as research for your project, or you’re going to track hours spent on project-related tasks. 

Outputs are results of your work. For example, your score on customer satisfaction surveys or how many tasks are completed on time. 

Outputs are what really matters for your project - after all, if you get consistent 5-star reviews from customers, does it matter if you do 10 interviews instead of 20 to prepare for the project? However, inputs can help you course correct when you’re not on target to hit your goals. 

For example, if you’re not completing tasks on time, you might want to look at the hours spent on each task. Are project contributors not spending enough time, indicating you need to dedicate more resources to the project? Or perhaps they’re hitting the input KPI of hours per task and you need to look at how you can increase efficiency.

What KPIs should you measure for project management?

It can be tempting to measure as much as possible during your project. More data is better, right? 

Well… maybe not. 

This is where it’s important to check that your KPI is relevant to your overall goal. As you narrow down your list of possible performance indicators, ask yourself what each datapoint will actually tell you about your project.

If you’re still not sure, try this exercise: Imagine what kind of data you might receive from a potential performance indicator if you were not meeting your goal. If the data from your KPI wouldn’t help you understand that you’re off track and how to improve your project management, eliminate it from your list.

While each project is unique, a few key project management KPIs are widely applicable regardless of industry or project type. We’ll detail each one below.

Deviations from the budget

KPIs developed around deviations from the budget can tell you if you are being wasteful, or they can tell you that the budget should have been better planned. In either case, this indicates whether or not you need to adjust your plans and reorganize your team to be more cost-effective.

For example, let’s say that your KPI is “Actual cost vs budgeted costs.” If your team has budgeted $1000 for monthly services but you are consistently paying $1500, there is a cost somewhere that you are not accounting for. This leaves you with a few options: you can campaign for more budget, or see how you can cut costs. Perhaps this means you find another vendor, agree to completing less of the project by the deadline, or sacrifice some quality to get the project out the door.

Tracking deviations from budget is important because it means that your team’s plans regarding budgeted costs are off by 50%. As a result, you can make a plan to get ahead of the unplanned expenses.

Differences in planned hours of work

The idea of tracking hours of work is similar to the budget but focused on improving where you are placing your efforts. It can also help you identify the most efficient teams or individuals in certain tasks. It will identify training needs and may also drive incentives and rewards for individuals to perform well.

Suppose you have employee A and employee B doing a similar task that is expected to take roughly twenty work hours to complete. When you track the difference in planned hours of work, you discover that employee A is consistently completing the task in 10 hours while employee B takes 18. 

This can indicate that, while both employees are working within the expected time, employee A has a more efficient process. Once you identify the difference in the process, you can train employee B to replicate it and increase overall productivity. 

If you find that members of your team are spending more hours than allotted, it can indicate that your estimate for overall project completion may be off and cause you to adjust your project completion estimates or processes.

On-time milestone completion

Tracking on-time milestone completion can help dedicate resources and accurately plan your project to reach your goals faster. 

Track key milestones from each person contributing to the project to understand where you may be experiencing delays and bottlenecks. If their on-time milestone completion percentage falls below your agreed-upon target level, you can work with them to address the issue.

For example, say part of your team's responsibility is putting out a weekly blog post to engage customers. The process involves a content manager picking a topic, your team working with the writer to get a quality draft, and then clearing it with management before posting. 

Now, suppose the content manager is consistently late in delivering topics, causing every deadline afterwards to be missed. With this insight, you can restructure your process to have the content manager provide more topics in advance, or assign someone else on the team to create the topics instead. 

Customer satisfaction rate

We’re not going to tell you that the customer is always right, but they do often have valuable insights. 

Tracking customer satisfaction can help you understand the impact your project has on the end user and whether or not your quality levels are meeting their expectations.

The simplest way to understand customer satisfaction is to send out a survey - you can ask general satisfaction questions or conduct a Net Promoter Score survey. However, we all know that sometimes the displeased customers are the loudest, so you may consider tracking complaints or support inquiries for the result of your project.

How do you set a quantitative goal for each KPI?

You know you have a good set of KPIs when they clear up uncertainty and give your team information to make meaningful decisions. This eliminates ambiguity and allows you to track your progress against the goal at any point during your project. 

For example, if your KPI is “conduct 20 user interviews by December 1, 2022,” you can measure your exact progress at any point during the project. 

Conducted 7 interviews so far? You’re 35% of the way there. Already 3 weeks into a 4-week project? You better hustle. 

Quantifying KPIs isn’t just for pointing out when you’re not meeting your goals - it can help you demonstrate the work you put in. If you’re setting an ambitious KPI, maybe hitting 85% is satisfactory – and you can prove it.

Using tools to help you track your process

Tracking tasks and milestones in a project management pipeline will help you keep tabs on your KPIs and grade them when the time comes. 

Steak pipelines allow you to add project items, create tasks with due dates, and move them through a series of project management milestones. Managing your project management pipeline in Gmail with Streak also allows you to: 

  • Create a completely customized project management pipeline in minutes
  • Automatically create tasks and update your pipelines
  • Filters tasks and items by team member to see who’s responsible for what
  • Add emails from your inbox and share emails with your team
  • Check in on all of your overdue tasks
  • Collect data about how long it takes to hit each milestone
  • And more!

Add Streak pipelines to your Gmail inbox for free to try it out.

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