on September 9, 2021 (last modified on January 11, 2022) • 16 minute read
How do you ensure that your team’s projects are delivered on time, on budget, and at a high-quality level?
Too often, people are quick to dismiss project management as an important skill.
However, if you remember back to any group projects from your high school or university days, you know how chaotic and stressful these projects could be.While projects in large organizations might be more organized than your high school group history project (Hopefully!), they are also far more complex behind corporate politics, scope creep, and gold plating.
In this post, we’re taking a closer look at the project KPIs you should be tracking to help your team’s projects run smoother.
Project management KPIs allow you to monitor your team’s performance from kick-off to launch. This allows you to understand what’s working well and where you are falling behind. You can use this information to course-correct along the way.
According to our recent survey of project managers, the average project team has between 3-6 people.
It’s worth noting that they are tracking anywhere from 4-6 primary project management KPIs.
These KPIs range from timeliness and effectiveness to quality and budget.
Rely on this information when you are setting KPIs for your project management team.
According to our research, the top 3 most popular tools for tracking project management KPIs are Asana, Trello, and Jira. Almost 60% of our survey respondents prefer to track their project management KPIs in Asana, around 30% uses Trello, and over 20% of our respondents rely on Jira and ClickUp. Other popular project management tools include Monday, centralized project management dashboard solutions like Databox, Basecamp, Teamwork, Wrike, and Harvest.
Project management is all about juggling: resources, expectations, people, data, and much more. And as a project manager, you not only have to know where your projects are at any given moment, but you also have to be aware of where they’re going and where they need to be in the future. To do that using a project management system, you need an actionable dashboard that allows you to monitor metrics like:
Now you can benefit from the experience of our project managers, who have put together great plug-and-play Databox templates showing the most important KPIs for tracking your team’s performance. It’s simple to implement and start using as a standalone dashboard or in management reports, and best of all, it’s free!
You can easily set it up in just a few clicks – no coding required.
To set up the dashboard, follow these 3 simple steps:
Step 1: Get the template
Step 2: Connect your project management tool with Databox.
Step 3: Watch your dashboard populate in seconds.
Here are some of the KPIs that teams are most likely to track within various project management software.
There is a good chance team members are working on more than one project at a time. This is where project capacity planning becomes vital. So, you can map how many hours they are spending across all of their projects.
“One project management KPI that’s important for PMs is resource capacity utilization,” says Amanda Haynes of Ganttic. “This is the percentage of a resource’s work hours occupied by projects or tasks, and there are 2 different ways to find this number:
Scheduled Utilization = Scheduled time/ resource capacity
Actual Utilization = Reported time/ resource capacity
This KPI is important because it’s the foundation for other metrics. Add up the utilization of a specific team to get the group’s utilization. And analyzing it will show how effective the planning has been. Plus, this KPI prevents employee and team burnout – protecting the project from high turnover rates, productivity issues, and going over budget.” Stay on top this data with the help of a project overview dashboard.
Whether you use waterfall, agile, or some other methodology, mapping out a big project in cycles or sprints is essential to keep your team motivated and on track.
Chris Westmeyer of Caring Advisor explains, “One of the most important KPI that every project manager should track to see the performance of their team is as follows:
Project cycle time is the time needed to complete a certain task or activity. This key performance indicator evaluates team productivity by assessing the time and speed with which the project is completed. This is an important KPI because efficiency is an essential consideration for any organization as inefficient processes adversely affect the bottom line including goals and objectives. Therefore, managers should track cycle times to monitor the performance of the team and project simultaneously.”
Leszek Dudkiewicz of Passport-Photo.Online adds, “The KPI that I track to monitor my team’s performance is the cycle timing. The timing of the tasks and business processes to be developed is a crucial factor in measuring productivity. Besides being simple to implement, it is a good KPI to know the actual effectiveness of a project or work process.
This KPI will show the differences between different work areas and the study of how to improve those that are not so profitable or effective. And if this indicator expands, the project will need more to determine bottlenecks.”
Monitoring the percentage of tasks in a project completed on time can help you get in front of potential issues.
“As a business owner, I can say that one of the most important project management KPIs to consider is the On-time Completion Rate or Percentage which pertains to the rate over the total tasks that are done within the set time frame or schedule,” says Jacob Sapochnick of Sapochnick Law Firm. “This KPI assesses the productivity and efficiency of employees when doing their tasks. Moreover, it can also help the managers oversee the tasks that consume more time than expected as well as individuals that might need extra assistance to meet the deadline. I believe that this metric should be one of the top considerations given that schedule or time budget is one great factor that affects the whole project.”
In addition, Yoann Bierling of YB Digitalt adds,”Tracking individual progress against the global project results is crucial to understanding where the pain points are, and be able to quickly act on them, by providing more support to overloaded resources, more training to underskilled ones, or any other corrective action that will get each single project member to give its best toward project completion.”
A KPI that is closely related to on-time task completion rate is schedule performance index (SPI).
Michelle Symonds of Parallel Project Training explains, “The Schedule Performance Index (SPI), which is a measure of how actual progress compares to the planned progress of the project.”
Grant Clleland of Infiniti Tracking adds, “Schedule Performance Index is a metric that managers use to measure how well their team executes the project on its schedule. It is important because it helps assess the accuracy of the planned schedule. Depending on the value of this metric, managers can determine how the baseline schedule was created or if there is any need for changes. The SPI is especially helpful in indicating if a project is behind schedule so managers can make timely adjustments. These adjustments can include redistributing workload or expanding teams. The SPI is also a measure of a team’s efficiency. It shows us how much work has been completed compared to how far along the project schedule is.”
Another KPI to keep an eye on is errors made. When the number of errors increases, this can be a signal that your team is overworked or undertrained.
“The number of errors made while working on the project can have a huge impact on the timeliness and quality of the work,” says Aviad Faruzo of Faruzo. “A high number of errors means that a different approach must be taken towards the project. Because in the end it is the timeliness that gets affected because the tasks have to be done a second time. This makes it difficult to meet the project deadlines and timely deliver the work to clients. It also determines how many times you have to redo things during the project timeline, which is a key factor in time management. This is why the number of errors made are extremely important to track.”
The time to complete tasks tends to expand or contract based on the amount of time allocated for it. Keeping an eye on how much time your team is spending in addition to quality metrics is vital.
“Every project manager should be aware of the total time a team has been working divided by the number of tasks completed,” says Natasha Rei of Explainerd. “This makes it easy to see how efficient each team member is and how their efforts contribute to a larger whole. If you’re struggling with prioritizing tasks or making decisions about what’s taking up too much time, this metric will show you where adjustments need to be made to ensure your entire team can get everything done on schedule. It also means less confusion about what different people are doing or if teammates contribute equally across all stages from design and implementation until the final shipping of a product launch.”
How much time is your team actually working on the project compared to the hours allocated?
“Planned hours of work vs actual hours of work,” says Andrew Fiebert of Lasso. “If there’s a big disparity between the two, it means that a few factors need to be evaluated – team/individual productivity, resource allocation, and scope creep. Sometimes it can indicate a need to move people around in a project, other times it can indicate a need for additional resources.”
You may find it helpful to monitor the total number of tasks submitted.
“Tracking your team’s project submission history is a great way to monitor performance,” says Laura Gast of Truck Driver Institute. “If project deadlines are being met consistently with quality work on the other end, that is a clear indicator that your team is productive and cohesive. On the other hand, teams that struggle to meet project deadlines may indicate a need for a shift in workload, team size, or changes otherwise. Either way, tracking this KPI will help project managers obtain a clearer understanding of their team’s performance.”
Another crucial KPI to watch is schedule variance because this can tell you if your project is ahead or behind schedule.
“One important KPI that Project Managers should set and keep track of is the Schedule Variance (SV).” says Kevin Miller. “This metric is an indicator of if the project is ahead or behind schedule. It gives the project manager an accurate picture of the progress which is a vital element of running a successful project. It helps to ensure that you stay on budget and have enough resources to complete the job.
Schedule Variance is also part of managing stakeholder expectations. It provides insight and figures to provide stakeholders to either assure them the project is running smoothly or give context as to why changes are needed to address a delay.”
This is particularly important if your team works in sprints.
“Velocity measures the quantity of work completed in a sprint and gives teams an idea about how much work can be done in the next sprint,” says Sergei Moskvin of Orangesoft. “A flat velocity is better than one trending down, but unless there’s nothing to improve in the teamwork, the velocity trend should be up over time.”
Jake Carroll of Create Kaizen adds, “Velocity is not to be used to performance manage people/teams but to understand how fast we can run. If we know that then we can aim to get complex problems finished within our cone of confidence. Velocity is very important because scrum teams are usually working on complex software that is sometimes hard to predict, and are often heads down solving problems right here and now. Having a strong grasp on velocity will enable the Product Manager to interface with non-technical partners easier and bring them into your world.”
What’s the actual cost of this project compared to what you estimated at kickoff?
Max Benz of remote-job.net says, “Knowing how much the project is expected to cost and when it will be completed is a good indicator of whether or not the project will be successful. It also helps with budgeting for future projects as well as meeting overall financial goals in a business.”
You can compare these estimates to the actual project cost.
When you know your costs, this makes it easier to evaluate if the project had a positive or negative ROI.
“One absolutely essential KPI to track is Return On Investment (ROI),” says Marcin Stoll of Tidio. “It is the crown of all other metrics, measuring the overall financial worth of a particular project related to its cost. ROI calculations can help the company to understand if a project will result in a positive payback for the company, estimate financial value, and compare to the other planned projects. Figuring out whether to start a project should go hand in hand with continuously measuring ROI to avoid making decisions that will result in losses.”
Tim Sutton of CoffeeGeek TV agrees, “The one KPI every project manager should track to monitor the performance of their team is the Return on Investment (ROI) = Net Profits/Costs * 100.
It shows how well the project is generating profits from the cost of input that’s invested. The costs can include labor costs, physical resources, and overhead.
Managers should monitor and analyze this figure throughout the whole project to note the effects of changes in input investments.”
360 degree feedback can help you determine if the team is working well together and respects one another.
“360-degree feedback is essential in measuring and understanding how effectively your team reaches its individual and group goals,” says Harris Rabin of R3SET. “This anonymous feedback comes from those working around the employee. Typically, they’re managers, teammates, and direct reports. The data you collect should be both quantitative and qualitative. This means the questions can range from how well the team member prioritizes their workload and meets deadlines to whether they embody the company values. 360-degree feedback also offers employees the opportunity to evaluate themselves.
While it’s not always easy to trust in this process, its goal is to solicit constructive feedback and actionable insights. A well-structured 360-degree review helps team members know what actions to take to improve their performance and ensures that each employee’s daily activities align with the team’s overall goals.”
This admittedly only applies to software engineers, but it is a key KPI for technical project managers to keep track of.
“For me, the number one KPI that every project manager should mind is the current development backlog,” says Heather Reid of Ukelele Tabs. “This will not only show how efficient and productive your team has been but will also show how effective you are as the project manager. Are you getting the tasks done on time? Are there any tasks which you’ve left behind and now needs to be looked after to get yourselves back on track? These are important metrics that need to be observed so you can really know if you’re actually making progress and hitting your goals or you’re just wasting your time while pretending to work.”
If the project is public-facing, then measuring client or customer satisfaction is important. The most common way to do this is through a survey like NPS or CSAT.
“The most important KPI to track is customer satisfaction,” says Elizabeth Harrin of GirlsGuideToPM. “Success is determined by the client and the perception of success is shaped by their experiences throughout the project. In other words, they don’t decide on whether the project is a success at the end, their opinion is formed throughout the life cycle, whether you are using predictive, hybrid or iterative approaches. I think it’s important to track measures that are important to the customer/client. They typically don’t care, in my experience, about whether you have completed all the project management documentation or filed everything correctly, or ticked the box for lessons learned. They judge projects completely differently: by the experience of being part of the delivery team and how they feel they were treated, and by the value of the outcome.”
In sum, monitoring project performance can help you stay on track and avoid unnecessary delays. While you don’t need to track all 15 KPIs, tracking 4-6 of them can help align your team and give you the best chance at success.
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