The projects your company works on will need to need to be properly structured and managed properly in order to avoid disastrous situations. In a recent study, nearly 37 percent of the business owners polled claimed that the lack of clearly defined goals led to project failure.
Tracking key performance indicators (KPI) is a great way to keep your projects on track. Making sure your managers understand their team’s work process is the only way to achieve the goals you have set for a particular project.
The following are just some of the most important KPIs to keep an eye on as your project progresses.
1. The Planned Value of the Project
In essence, the planned value of your project is the estimated cost of the scheduled activities. Checking in on this KPI will allow you to see what has been done and how much of your budget has been spent to date. Failing to keep up with this metric may lead to you going way over budget, which is never a good thing.
Typically, the planned value of a project is calculated in two different ways. The first formula you can use to calculate planned value is by figuring up the hours you have left on the schedule for your project multiplied by your workers hourly pay rate. You can also calculate this KPI by figuring out the percentage of planned activities left in the project multiplied by the project budget.
2. The Return on Investment
As a business owner, one of the biggest concerns you should have regarding the projects your company takes on is the return on investment (ROI) they provide. Basically, the project ROI will reflect profitability. Ideally, you only want to take on projects where the benefits far outweigh the projected cost.
You need to be aware that not all projects are designed to have a positive ROI. There will be times when the ROI should be calculated as a long-term investment rather than a one off influx of capital. Calculating the ROI of the project is only possible when looking at actual cost and earned value metrics.
3. Cost of Managing the Project
When trying to calculate the total cost of your project, don’t forget to look at how much your managers are getting paid. In most cases, higher than normal management costs may indicate that your team is not doing a great job. However, if the management costs are too low, it can be an indicator that the project is poorly organized or structured.
Your team will undoubtedly spend time on things like project meetings. Allocating enough time in the budget for these meetings is important. Without frequent get-togethers, it will be hard for your team to stay on the same page and reach the project goals you have set.
4. Overdue Project Tasks
Before you begin a project, you will need to sit down with your management team and make a list of goals. Tracking the progress of your team can help you nip problems in the bud before they develop into major disasters. If you have a slew of overdue projects showing up on your dashboard, you need to speak with the team members who seem to be lagging behind.
In some cases, these overdue projects will be caused by problems within the app or software you are using for project management purposes. This is why using a program that features faster application centric troubleshooting is so important. With the ability to easily troubleshoot app-related issues, you can get your project back on track easily.
5. Schedule Variance
The schedule variance metrics gives you information on how ahead or behind you are on certain tasks. Watching the KPI throughout the progression of a project can help you address serious problems head on.
Often times, schedule variance issues will be caused by under-performing employees. The longer you wait to speak with these team members about their lack of hustle, the harder you will find it to complete your projects on time and on budget.
The first people you need to talk to about issues like this are your project managers. They will be able to give you a breakdown of what is going on and help you come up with a solution on how to fix it.
6. A Breakdown of Quality KPIs
While finishing a project on time and on budget is important, you don’t want the quality of the work your team does to suffer. This is why monitoring a series of quality KPIs is essential.
The Customer Satisfaction Factor
Most of the projects taken on by small businesses involve providing a service or products to their customers. By taking a brief survey, you can quickly find out whether or not your customers are getting the service they deserve. Projects that deal directly with the customer are usually much easier to track. If there are problems with customer service, you need to work with your team to come up with a quick and comprehensive solution.
The Number of Errors That Have Occurred
You will also need to monitor just how many tasks are having to be redone within a project. Not only do these types of mistakes affect the quality of the work, it can affect the budget and the projected date of completion. Often times, these errors will be caused by either a lack of communication or the use of outdated tools.
If the quality of the work performed within a project is not consistently high, it is only a matter of time before you start to lose customers. In some cases, altering the scheduled dates of completion within a project can help to reduce the pressure your team feels and will allow them to focus more on completing their work correctly.
Be a Leader!
As the owner of a business, it is your job to lead your team. This means you need to focus on providing with the proper tools and motivation to complete projects in a timely and efficient manner.
About the author:
Ashley is an award-winning writer who discovered her passion in providing creative solutions for building brands online. Since her first high school award in Creative Writing, she continues to deliver awesome content through various niches.