Project management is a long and complicated process. Many factors heavily impact the success of a project, and consistency is one of the most important factors. You have a project, a team, a goal, a deadline, and everything else.
But if you are not consistent, you are more likely to fail or be late for the project. This is where KPIs come to change the game. So, what is the KPI in project management? Let’s find out!
What is KPI in Project Management?
KPIs or Key Performance Indicators use data to quantify the actions that have an important influence on the success of a project. They allow the authority or leader to track every team member’s performance and the project’s progress. It will maintain a consistent workflow, development, and project growth, resulting in success within the due time. Tracking the KPIs in project management can also reveal the reasons for a project’s slow growth or failure.
Project Metrics vs Project KPIs
It is easy to be confused between project metrics and KPIs. So, before we start a more elaborate discussion on KPIs, let’s clarify the concept.
KPIs are direct, clear, and significant indicators that show the project’s overall status. These KPIs are agreed upon before the project even starts. Metrics have similar functions in a project, but they are less important. So, overall, we can say that all KPIs are metrics, but all metrics are not KPIs. Only the significant metrics with high impact in the project can be considered as KPIs.
Why Use KPI in Project Management?
We keep saying that KPIs are highly important for project management systems. Now, let’s change the question and look at why KPIs are important for project management. Here are some crucial reasons:
Objective Measurement of Success
KPIs provide direct, clear, and measurable status reports of the project’s flow, direction, and progress. They really allow you to measure the success and progress of the project objectively based on a predetermined goal.
Decision Making
KPIs provide real data that help the project manager understand the project’s overall status and make informed decisions. The authority can identify issues earlier, allocate resources efficiently, and even modify strategies to keep the project on the right track.
Clear Accountability
KPIs set specific tasks for all individuals to monitor their contributions. It also allows you to know who is responsible for what. So, if anything goes wrong, you can easily track the responsible person for that and take proper action.
Focus on Important Aspects
KPIs will naturally bring out the most important factors that have a high impact on the project’s success. You can assign your expert team to the significant and crucial areas of the project to optimize the result.
Initiates Communication
KPIs create a common topic of discussion between the team members, leaders, project managers, and clients. It initiates a transparent and direct way to communicate and discuss the growth and issues regarding the project. It encourages collaboration and teamwork among everyone.
Risk Management
The project manager can track and identify any potential risks in the early stages with proper analysis of KPIs. He can make data-driven decisions to address the risks and find a proper solution to them.
Consistent Growth
After the project is finished, you can analyze the KPIs to figure out which decision had a good impact and which one had a bad impact on the project. This knowledge will be precious in the next projects, where you can maintain flawless project and employee growth consistency.
What are the Types of KPI in Project Management?
There are countless potential KPIs, but they are not the same value. Which KPIs to choose depends on the unique requirements and characteristics of the project. However, we have prepared a list of some of the most crucial project management KPIs that can be useful for almost any kind of project.
1. Shifts in Budgets
Although budgets are already set before the project starts, unexpected issues can sometimes arise. So, you may need to modify the budget to address the issue. Understanding and remembering the change in budget, the reason for the change, and the time of change is important to remember. In this case, cost-related KPIs like CPI and Budget Adjustments are useful.
2. Timing
It is a common and great practice to divide your project into small portions and identify the critical phases. It will make tracking progress and finding issues easier and the workflow easier. When the project is complicated and has several vital factors related to success, it is easy to miss the team goals. You can use timeline KPIs like Cycle Time and Deadline Adjustments to keep tabs on these milestones.
3. Return on Investment (ROI)
Budgets are crucial, and so are ROI goals. To maintain the value of the overall projects, you have to understand and track your costs. Using ROI as a KPI, you can identify when and why the costs exceed the estimations. It also helps in the risk management aspect and controls the costings.
4. Changes in Team Structure
It is another important KPI that tracks your team structure and changes. You must use SMART goals to identify what roles you need for your project team before it starts. After the project starts, you may need to relocate your employees, or some of them may need further training. You can use Resource Capacity and Time Spent Per Person to track goal achievement and use this knowledge in the future.
How can ProKPI Help Your Project Management?
Setting KPIs for your project manually is complicated and can fail to provide accurate results. So, which software should you use? There are tons of options, but the best among them is ProKPI. Assigning strategic business objectives is fast and easy with this software. There are lots of features that will make your work easier, such as:
- You can set goals for departments, teams, and even individual-level
- You can set your own goals and track the success
- A designation-based authority must approve self-assigned goals
- You can set as many goals as needed for the proper functioning of the project
- You can divide the timing of the project portions into yearly, quarterly, monthly, or even weekly basis.
- If you face any issues, you can contact the 24/7 customer support
- It has a subscription-based payment system that is priced reasonably
One of the best things is that the user-friendly interface is properly sorted. According to the Research Gate, the UX is an important aspect of tracking and managing KPIs. The admins and team members can adapt to the interface easily and start working quickly.
We also focus on 3 major aspects of project management that contribute to your business improvement.
- Tracking Every Project Detail: You can track every project detail using ProKPI, including project name, timeline, deadline, team members, etc. You can keep an eye on everything and maintain a stable and consistent workflow.
- Smart Reporting: You can check the updates and reports of the project in graphs, pie charts, curves, and other presentable methods. It makes the evolution and performance tracking of the team members easy.
- Decision Making: You can update the KPI of the team members based on the SMART goals system for the best output. As you get the whole report in an easy format, you can find out the issues and make proper and data-driven decisions to solve them.
After all, ProKPI will make using KPIs in project management fast, efficient, and easy. As a result, you will finish the project properly in time and contribute to improving your business.
Bottom Line
KPIs are versatile factors that you can use in various aspects of a business. From all the discussions, you can imagine the impact of KPIs on the project management system. There is no better way to manage an informed and properly functioning project management other than using KPIs.
FAQs
What are the 4 P’s in KPI?
The 4 P’s is a term that identifies the most crucial aspects of a KPI that aligns with your business strategy. They are Product, Price, Place, and Promotion. These 4 P’s are key to business success.
How to track KPIs?
Tracking KPIs is not that hard if you use the proper tools and software. For example, you can use ProKPI, an easy and effective KPI management system to assign, track and report KPIs.
What is SMART KPI?
SMART KPI is a format for assigning KPIs to boost employee productivity and success. SMART stands for Specific, Measurable, Achievable, Relevant, and Time-bound. It is the most successful and efficient framework for setting KPI goals.
