How to maximize the use of KPIs in project management?

Would you drive a car without a dashboard? Without a speedometer, a fuel gauge or even a route planner? 

If this exercise seems complex or even dangerous to you, consider that managing a project without KPIs amounts to this. Of course, the consequences are not of the same magnitude. On the other hand, this deliberately impactful example illustrates the importance of using KPIs to manage your projects.

To see the benefits, you need to learn how to use them appropriately.

We have therefore designed this guide to help you maximize the use of KPIs in project management, also considering the monitoring indicator as a key element.

 

1. What are project management KPIs?

A KPI, or Key Performance Indicator, is a performance indicator . It usually takes the form of a number or percentage.

Its use makes it possible to measure the progress of the project and facilitate decision-making , acting as a real monitoring indicator.

2. Choose appropriate and relevant project management KPIs

     A) Make an assessment 

Taking stock of your project and your capabilities as a company is a necessary step in choosing KPIs.

You must precisely identify: 

• Progress already made on the project 

• The data you have or may have
• Collection and processing tools at your disposal
• Resources for analyzing KPIs

 

Collecting KPIs involves being able to read, analyze and interpret them . KPIs remain tools supposed to help you manage your project, reading them generates adjustments and corrections .

 

     B) Determine objectives

KPIs are efficient indicators, which serve objectives . Otherwise, they become what we call “vanity metrics”, which only serve to flatter the ego without helping with project management.

Take the time to define what you want to achieve with their use. Here are questions to help you identify goals:

• What are the stakeholders' expectations regarding the project results?
• What indicator will help define my project as a success? 
• What are the potential risks for my project?
• What is the optimal frequency of measuring KPIs to ensure effective responsiveness?

 

     C) Identify the data to measure

• SMART method

Once your objectives have been determined, you must define the data that will be measured.

These must be specific , measurable , achievable , realistic and temporarily limited . Otherwise: SMART.

 

Make sure your KPIs meet these requirements: 

• Linked to a goal
• Understandable by all employees who will use it
• Personalized to the needs of your business and especially your project.

 

• Reduce your selection to the strict minimum 

Collecting and using a KPI in project management consumes resources . This requires time and collaborators: collection, processing, reading, analysis, etc.

Therefore, avoid choosing a KPI because your colleagues or competitors use it.

If a KPI is not useful for your project management, there's no need for it! Choose KPIsthat are truly suitedto your project. Note that the more indicators you follow, the more itcomplicates your projectand increases your workload.

 

• The 3 groups of KPIs

As mentioned in this article on defining evaluation criteria, measuring project performance requires 3 criteria: quality, deadlines, costs.

 

💡 Scroll right to see the 3 KPIs

1. Quality KPIs

These indicators measure the degree of satisfaction of customers and employees.

Here are examples of quality KPIs in project management: 

• Customer satisfaction
• Net Promoter Score
• The number of errors
• The number of complaints
• Employee turnover                                                                                 

                                                                                                                  >

2. Deadline KPIs

Like costs, deadlines are often studied closely to measure the success of a project.

Here are examples of KPIs to measure deadlines in project management: 

• Time passed
• The delay rate
• Resource capacity
• Planned vs. actual hours

                                                                                                                                                      >

3. Cost KPIs

Costs are often the most decisive element for the success of a project. We have also dedicated this article to present to you 12 financial indicators for project management .

Here are some examples of KPIs to measure costs in project management: 

• The budget gap
• The real cost
• Return on Investment (ROI)                                                                                                                                                                                                  

At Stafiz, we have developed our tool to facilitate the measurement of KPI deadlines.. For example, we can help you go one step further by enabling you to measure progress rate and task progress rate.

For us, invoicing is an integral part of project management. However, this aspect is often neglected. We offer you an indicator to identify everything that can be invoiced to date, and everything that remains to be invoiced.

In the same way, we are aware that costs represent one of the most strategic indicators. We have therefore developed this aspect in particular, enabling you to monitor and control your costs :

• Calculate project profitability using gross margin, net margin and margin rate indicators. To find out more, read our article on calculating profitability.
  
• Calculation of the turnover forecast using the progress forecast
• Calculation of production versus invoicing
• Presentation of income statements for a specific and consolidated activity

In addition, we offer granularity allowing detailed cost analysis by project, by team, or by department.

Find out more about KPIs in Stafiz

• Follow certain precautions 

Make sure the team is ready to work with the chosen KPIs.

Take the time to talk with your colleagues . You must be sure that they understand the indicators selected and that they see the benefit of working with these tools.

Additionally, make sure you can achieve the selected KPIs . Indeed, they must constitute a reliable source of information on which you can rely. This may require specific implementation:

• Setting up collection tools
• Creating dashboards
• Collaboration with other stakeholders (technical teams for example)

3. Implement a monitoring strategy

     A) Set goals

You have already defined objectives for the selection of your KPIs. 

Here, it is about defining objectives supporting the implementation of your monitoring strategy .

What motivates you to track your KPIs? For example : 

• Improving delivery time
• Reduction in production costs
• Improving the quality delivered
• The development of a specific skill in an employee 

     B) Choose the appropriate tool

Once your objectives have been established, you will be able to list your needs in order to compare and select the tool that meets your needs. Consider the following:

• The features offered 
• Ease of use and deployment
• The level of support available: the implementation of certain software requires significant skills and support may be necessary
• The price 

At Stafiz, our strength lies in the design of an interface adapted to several levels:

• Project management
• Project portfolio management
• Program management

 

Centralizing information provides global visibility : this avoids the need for manual tracking from different sources. Often time-consuming, it is also tedious and imprecise.

Finally, we offer dedicated support to help you clarify your needs and configure the tool according to your expectations.

     C) Driving on a daily basis

Daily management represents the whole point of KPI monitoring in project management.

• Build dashboards

Dashboards will prove to be valuable tools for managing your projects using KPIs. In fact, they make it possible to group KPIs , make them readable , visual, contrast them or provide more context by associating them .

To find out more, read our article on creating dash boards for project management.

• Obtain a consolidated vision

At the micro level, KPIs will allow you to identify your progress in terms of deadlines, costs and objectives. At Stafiz, we have designed the product to provide you with an aggregated view of this information . This is particularly useful for program or portfolio management . The idea is to provide you with the necessary information to help you organize and optimize your resources .

• Manage projects brought together into a program

This organization consists of managing a set of interconnected projects serving and aligning the company's strategic objectives with each other serving strategic objectives for the company.

Stafiz thus makes it possible to group several projects into a program and helps in particular to consolidate financial and invoicing data .

• Manage a project portfolio 

For managing a project portfolio, Stafiz offers a global view of the situation . You will thus be able to identify:

• Projects that deviate in terms of time
• Projects that deviate from the margin 
• Projects that deviate from task level

This vision of project portfolios makes it possible to compare the performance of one project in relation to another. By analyzing what works and what, on the contrary, does not achieve the expected results, you are part of a process of continuous improvement .

• Coordinate human resources

Management , optimization of resources and employee satisfaction represent strategic aspects of project management .

Stafiz has therefore developed features to meet this need: 

• Resource allocation and planning
• Notification and improvement of employee visibility. 

Information is better distributed . Thus, view management allows everyone to have the right information according to their scope and rights. Each employee therefore feels more responsible .

Project management in Stafiz

     D) Make informed decisions and adapt

• Gain visibility 

Managing on a daily basis provides all the necessary capabilities to be flexible and adapt in order to lead the project to success.

Stafiz allows for increased responsiveness because the tool facilitates access to reliable and precise data, all calculated automatically. So everything happens in real time: you get an immediate overview of the status and the risks of deviation . Regular monitoring remains essential to identify what is working and what could benefit from improvement.

• Demonstrate flexibility and responsiveness 

A project is destined to evolve. As project, program or portfolio manager, your role is to identify points to optimize. 

Certain indicators can help you in this process. Evaluating the gaps between the forecast and the actual (in terms of time, budget or resources) will help you optimize your strategy.

Maximizing the use of KPIs in project management requires a precise definition of your objectives as well as several strategic choices.

Identifying KPIs adapted to your project and choosing the tool corresponding to your needs can represent a real challenge. Relevant use of KPIs requires intense preparation , a precise inventory and constructive collaboration .

That said, strategically chosen , collected and analyzed KPIs will allow you to manage your activities in order to adapt your strategy . At Stafiz, we have taken all these criteria into account in order to build a complete, flexible and effective product for your project management.