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Project Management:Key Performance Indicators

Table of Contents

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Introduction1

What are KPIs?2

KPI Display Types3

Project Dashboards4

Summary5

IntroductionThe Importance of Conveying Information

– Project Management requires the accurate monitoring of several key data points and types throughout the lifecycle of a particular project or program

– These data points need to be observed and presented in a fashion that makes their interpretation easy to discern

– In addition to the project manager, the team members, stakeholders and project sponsor all need to be able to get a sense of project progress in a simple and straightforward fashion; inundating them with complex jargon or difficult to read data sets will lead to confusion

– As such, the best strategy to utilize is to identify and leverage a few pertinent Key Performance Indicators (KPIs) that will properly convey information in a simple yet effective manner to anyone wishing to interpret current project status and progress

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IntroductionThe Need for KPIs

– KPIs provide a window not only into the current status of the project or its past performance, but also serve as a means to detect future problems

– This ability to spot a potential problem manifesting (eg. schedule slippage) will allow the project manager and team to address the situation ahead of time and take steps to mitigate it accordingly

– Different KPIs can yield different insights into the project as a whole, allowing for several views for the project manager and team

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What are KPIs?Primary Definition

– To put it simply, a Key Performance Indicator is essentially a type of performance measurement

– In essence, it is a way to evaluate the success of a particular endeavor or activity

Real World Examples

– Example 1: A simple analogy for a KPI would be something like a batting average in baseball; higher averages denote better hitting success rates and allow teams to gauge performance of their players

– Example 2: Another example would be a stock portfolios rate of return, which could be demonstrated several ways including increase in monetary wealth of the account as well as rates of return for key investments and how they performed against each other

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What are KPIs?Anatomy of a KPI

– KEY = A major contributor to the success or failure of the project; a KPI is therefore ONLY a key when it can either make or break the project

– PERFORMANCE = In essence, a metric that can be measured, quantified, adjusted, and controlled; note that the metric MUST be controllable to improve performance

– INDICATOR = An easy to read and interpret representation of present and future performance

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What are KPIs?KPI Types

– Quantitative Indicators: A measure that can be presented numerically– Qualitative Indicators: Cannot be measured numerically– Leading Indicators: Forward looking measures that help predict future outcomes– Lagging Indicators: Provide a post hoc mechanism– Input Indicators: Measure the usage of resources used during project execution– Process Indicators: Used to measure overall efficiency– Output Indicators: Used to demonstrate the outcome or results of the process activities– Practical Indicators: Interfaces to existing company processes– Directional Indicators: Demonstrating whether organization or project is improving or not– Actionable Indicators: Those which are in control of the organization– Financial Indicators: Monetary measures(**Source: Wikipedia: http://en.wikipedia.org/wiki/Key_performance_indicators)

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What are KPIs?KPI Project Management Examples

– There are numerous KPI types that exist within the project management space; a few key examples would be the following:

I. Estimate to project completionII. Number of unresolved issuesIII. Current resource allocationIV. Labor costs spent (per month)V. Current development backlogVI. Project schedule (Agile or Waterfall)VII. Issues found in code reviewVIII. Issues found by QAIX. Issues found by customers

What are KPIs?KPI Selection Process

– A key aspect of picking the right KPIs is to ensure you are choosing the specific ones that are actually most pertinent to establishing project success

– Creating a KPIs ‘library’ is quite straightforward; however, ensuring you only select the relevant KPIs is a little more challenging

– Too many KPIs will lead to confusion and could start sending false positives to the project stakeholders, sponsor and team members; additionally, overloading the usage of KPIs will eventually lead to the situation of ‘noise’, whereby so many factors are monitored that it becomes a blur

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What are KPIs?KPI Selection Process – S.M.A.R.T.

– A simple method on KPI selection is to leverage the ‘SMART’ technique, which can be summarized as follows:

What are KPIs?KPI Problems and Issues

– There can be several reasons why a KPI may end up being either insufficient or downright detrimental when being used in a project. Listed below are several of the key ways that may cause failure of the KPI to yield what it was meant to provide:

The KPI is not related or relevant to the work being performed The rate of change in the KPI is too slow to produce a result that is actionable Turnaround time for actions needed to correct low performing KPIs takes too long The responses necessary or the processes needed to deal with KPIs indicating a problem

either do not exist or are woefully inadequate The KPIs are only loosely monitored by front line managers as opposed to being shared with

the team as a whole Too many KPIs put in place leading to confusion and ‘noise’

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KPI Display TypesConveying KPIs

– The most effective way to convey a particular point in a straightforward fashion is to derive a simple representation of what you are attempting to show

– Think of road signs: they are often very terse with minimal verbiage, often times leveraging a particular shape or color to drive home their point

– Even when one is traveling overseas and does not understand the language of the region, the symbolism of the signs are often so ubiquitous, that they can still provide insight into what they are conveying even if one is not cognizant of the language; eg. Consider the different ways that ‘stop’ are conveyed in the signs below:

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KPI Display TypesConveying KPIs

– As alluded to, a KPI is meant to be an item that someone can look at quickly, at a glance, and instantly discern its status

– In that sense, KPIs should always be kept concise and too the point; additionally, when showing KPIs, make sure they exist in mutually distinct areas on your report so as to not create clutter (this will be discussed further in the dashboarding section

– One important point: when performing measurements for a KPI, it is not necessary to strive for perfection. Warren Buffett once famously said: “It is better to be approximately right that to be precisely wrong”

– As such, focus on thinking of the KPIs as being a ‘rough guide’ rather than absolutes

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KPI Display TypesWidget Types

– The following slides will provide examples of some of the common widget types that can be used to display various KPIs

– The nature and type of each widget is portable to different KPIs and the selection of which widget to use for which KPI type is up to the discretion of the project manager

– Each widget will be accompanied by a brief description of its type and inherent display function

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KPI Display TypesStandard and Stacked Histograms

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Usage

Conveying total amounts in singular or segmented (stacked) fashion

Provides visual comparisons against totals

Tips

Avoid too many data points in a singular chart; it will make the information harder to read

Use effective color schemes

KPI Display TypesPie Charts

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Usage

Conveying percentage amounts in separate ‘pieces’

Provides quick view of larger segments versus smaller ones

Tips

Keep pie pieces separated by spaces; it makes them easier to view

Use effective color schemes

KPI Display TypesLine Charts

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Usage

Conveying aggregate data sets in line format

Provides trending analysis of data points

Tips

Avoid excessive use of additional line segments; try to keep it at no more than four segments per chart

Use effective color schemes

KPI Display TypesTabular Data

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Rank Company Order Total Revenue

1 ACME $1,000,000 $100,000

2 UFP $2,500,000 $250,000

3 Uber Comp $1,200,000 $120,000

4 Happy Games $600,000 $60,000

5 Wonder Comp $4,200,000 $420,000

Usage

Conveying various key/value pieces of data

Provides ‘hard’ values for viewing and analysis

Tips

Try to avoid too many lines and columns to your table; minimize vertical and horizontal scrolling

Use effective fonts and keep them consistent

KPI Display TypesFocus Grid (Tiled Matrix)

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Usage

Simplistic conveyance of certain items

Provides simplistic representation

Tips

Do not overload grid with excessive number of items

Use effective color schemes

KPI Display TypesSpeedometer

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Status: Slight delay Issues: NoneNote: Follow-up with

client

65% Complete

Usage

Provides ‘progress to completion’ or ‘current status’ indicator

Gives easy to interpret mechanism at denoting status

Tips

Keep concept simple and akin to standard methodology

Use effective color schemes

KPI Display TypesRadar Plot

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Usage

Provides overlay and scatter analysis of data

Gives indicator on how disparate data points correlate

Tips

Avoid attempting to compare too many series in one plot

Use effective color schemes

KPI Display TypesArea Graph

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Usage

Provides a line-based histogram type overlay of multiple series

Can be used to determine trends and derive projections

Tips

Avoid attempting to compare too many series in one plot

Use effective color schemes

Project DashboardsDisplaying Multiple KPIs

– Once individual KPIs are produced, they will need to be displayed in some manner that can allow the casual observer to easily read various data points in one pass

– Enter the ‘Project Dashboard’, a means by which many KPIs can be showcased in a tiled fashion

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Project DashboardsNotes on Best Practices for Dashboards

1. Try to avoid using too many KPIs on a singular dashboard; if there are many KPIs to display, break them up into separate dashboards organized by KPI commonalities

2. Use effective spacing; try not to ‘clutter’ your dashboard with KPI charts mushed up together too tightly

3. Keep KPI chart tiles at uniform sizes (when possible); from a viewing standpoint, it is far easier to scan a dashboard with equally sized chart widgets than it is to try to discern a malaise of uneven or different sized tiles

4. Leverage ‘highlighting’ when possible to bring out specific data points more easily5. Provide ‘drill down’ or ‘tool tip’ capability if possible; this will give additional information to

the end user as they hover or click over parts of the charts6. Have additional controls if possible; i.e. zooming, filtering, color adjustment, etc

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***Note: The following slides will provide samples of different dashboard and layout concepts, utilizing both mid level and high level KPI display items

Project DashboardsSample Dashboard of Common Project KPIs

Project Status: GreenKey Discussion Items•Currently performing unit tests and validations of primary architecture design concepts•QA planning

Project DashboardsSample High Level Project Overview

Objective

•Primary Manhattan rollout

Main Focus

•Usability improvements and new features, focusing on more robust client/server architecture

Project: Manhattan

Primary Resources

Name Role

Sanjay H. Dev Lead & DBA

Joe Smith GUI Developer

Steve M. CLI Developer

Amit K. API Developer

Jeff Wong GUI & API Developer

Melanie R. Graphic Artist

Philip R.S. QA Engineer

King Uber Project Sponsor

Tom the Grunt Project Manager

Issues/Risks

•No current risks identified

Key Discussion Items

•Currently performing unit tests and validations of primary architecture design concepts

Project Status: Green

65% Complete

Timeline

Milestone Start End Mar April May June July Aug

1. Project Charter Mar 1 ---

2. Gather Requirements Mar 4 Mar 22

3. Design Discussions Mar 25 April 30

4. Primary Coding May 1 Aug 2

5. Testing Cycle Aug 5 Aug 16

6. Beta Release Aug 19 Aug 29

7. Rollout Aug 30 ---

SummaryUsing and Understanding KPIs

– Picking and choosing the right KPIs to display is not always a straightforward task and in most cases will require a little trial and error

– Knowing how to interpret the KPIs and ensure that actionable measures can be taken must be adequately understood up front so as to have a means of mitigation if problems or changes to the project occur

Displaying KPIs Effectively– In order to properly convey KPI and pertinent project information, leverage a dashboarding

mechanism that showcases key pieces of data in easy to read tiles– Each tile ‘widget’ should be properly spaced and aligned with others in the display– Try to group similar KPIs into functional areas and separate them into different dashboards

if too many KPIs result in clutter within a singular view

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SummaryConclusion

– KPIs are the mechanism by which a project manager can gauge the status of their project

– Picking the right KPIs is a group exercise and should be done with care

– Displaying KPIs should be done in an easy to interpret fashion, minimizing clutter and ‘noise’ as much as possible

– A dashboard is the most efficient way of displaying multiple KPIs in a singular view

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