The creation of a set of key performance indicators (KPIs) is almost always an effective measure of how a project has performed in relation to the agreed strategic objective. Without KPIs to determine success, reaching goals becomes a guessing game.
The types of KPIs vary depending on the critical success factors (CSFs) for an industry, product or service, business, and operational strategies. But they need to be clearly identified, achievable, quantifiable and appropriately defined and within specific parameters in order to be fully adequate for a given project.
Understand the Current Scenario
Before deciding on the KPIs to be used, it is necessary to clearly and accurately define the critical success factors and then identify the KPIs that are most directly connected to those CSFs. Again, KPIs and CSFs should be clearly defined and agreed upon by stakeholders and should be ranked in order of importance to the overall business objectives and strategy.
Here are some examples of types of project management with KPIs applied by the team to measure their performance:
KPIs for performance evaluation of project teams should be used to measure the quality of those teams, but it is also possible to use process KPIs or quantitative metrics, depending on the nature of the project, product, service or industry, as long as individual and team activities involve processes or activities to which they can be applied.
The right metric depends on the clear understanding of what you want to accomplish. Imagine that, instead of working in IT, you are a highway policeman. If your goal is to catch anyone who drives above the maximum allowed speed, your metric will be the highest number of fines issued per agent per hour. If, on the other hand, your goal is to minimize the amount of speeding on the roads, you will ensure that each police car is highly visible, and the metric will become the smallest amount of fines issued.
In most cases, there are four different ways to do metrics wrong:
In order to identify the most appropriate KPIs for your project, you need to go through two indespensable steps.
Step 1: Clearly Define Team Duties
When you are trying to determine your team’s performance measurement KPIs, think about expectations and factors that will determine success against specific project objectives and all other goals. It is important to know, as accurately as possible, what you want the team to do before you can decide how to measure it. Here are some steps that will help you compose this list:
This list will help you determine KPIs that will effectively and truly measure team strength and performance. But remember that KPIs must not only be clearly identified, but must also be quantifiable, appropriately, using correct parameters.
Step 2: Focus on Criteria Selection
Consider the 10 project management knowledge areas: scope, time, cost, quality, human resources, communication, risk, power, management, and stakeholders. Try to identify exactly how your team will manage each of them and respond to them. This will ensure that you have a holistic view of the project and take into account all the factors that can join the game before choosing the criteria that determine the KPIs.
As part of this exercise, keep in mind that team KPIs must meet some needs, such as:
Here are eight KPIs that can be adapted to measure the performance of a team:
Most companies have not developed the internal capabilities required to effectively implement a performance measurement system. Some kind of technical support for implementation seems to be desirable for many companies. If that's your case, do not think twice. KPIs-based companies ensure that their teams are working to achieve project objectives and have feedback, data challenges or strategies. Remember, all KPIs must be appropriately identified and realistically measurable, as well as clearly communicated, documented, and accepted by all.