Progressively tracking the metrics for your IT project can be the difference between success and failure. Metrics allow you to gauge the status of your project concerning your goals and deadlines. Without tracking your metrics, you are essentially in the dark about how your project is performing. As deadlines grow closer, such ignorance can result in an unexpected failure. For this reason, you must track metrics throughout the duration of your IT projects, and we know exactly which ones are the most important.
The Value in Metrics
Aside from keeping tabs on the status of your project, what’s the benefit of tracking metrics? Well, tracking your progress is a huge plus, especially if you’re working with tight deadlines, but it is also beneficial in proving the value and improving your project's performance.
Metrics related to cost and quality can help prove the value in your project and thus your team. A significant and common value metric is return on investment (ROI), which demonstrates exactly how much value was procured from the investment of your project.
Even more important than proving project value is improving performance for the future. With qualitative goals, it can be challenging to track performance and thus improve it. Alternatively, quantitative metrics give you a precise number to evaluate. With this number, you can quickly determine if the project was successful or not and determine if project management was effective. If not, you now have an exact number to work with and improve upon.
Choosing the Right Metrics
Understanding the value in metrics isn’t the issue for many project managers - it’s which metrics to use. Within project management, you can essentially track anything and everything, but you shouldn’t. Tracking too many metrics can waste resources and result in confusion, so it is important to only stick to those that matter.
To determine which metrics you should be tracking, you must first understand the project's purpose, which success factors will impact the project, and how you plan to measure each success factor. On top of those factors, there are four fundamental considerations to determine project success:
Timeliness
Did you meet your project deadline? How long did it take compared to the forecasted time? Metrics regarding time help project managers to determine the timeliness of their project: whether it was completed on time. If not, these metrics help track where time was lost to determine issues and adjust future forecasts. It is also important to not only understand your time for efficiency but also for billable resource utilization.
Budget
Financial metrics help project managers to evaluate their project budget. How did the actual budget compare to the forecast? Did you stay under budget, or is the project exceeding costs? These metrics help improve future resource allocation and budgeting, in addition to evaluating value.
Quality
Quality metrics help you determine if the quality of the project delivery met customer expectations. These metrics may calculate errors, customer satisfaction, earned value, and more to determine if the quality was satisfactory in accordance with budget and time.
Effectiveness
Are you spending time and money effectively? Could you be completing the project more effectively? Project effectiveness helps project managers determine if the most effective means were taken to complete the project.
With these considerations in mind, these are the most significant and beneficial metrics for tracking IT project success:
Project Management Metrics
1. Gross Profit Margin
Gross profit margin is a well-known and well-used metric as it is directly tied to a company's bottom line. The higher the margin, the greater the success of the business. Any project completed will contribute to the financial profit of a business, and this metric can help you determine your contribution to the business’ success.
2. ROI
As mentioned previously, ROI is a hugely valuable metric. ROI demonstrates the dollar amount earned for the amount invested in a project. Contrary to gross profit margin, this metric looks specifically at the benefit of the project divided by the costs. To use ROI, you must assign a dollar amount to each unit of data in order to determine net benefits and cost.
3. Earned Value
Much like ROI, earned value shows how much value a project has earned from the money spent on a project. By comparing the value of work completed by a specific date to the approved project budget, you can determine how much value was earned from the project. This metric is excellent in guiding a project and is often referred to as the budgeted cost of work performed.
4. Actual Cost
Another standard financial metric is actual cost, a number that demonstrates how much money was spent on the project - not an estimate. This metric is determined by adding all expenses for the project over the timeline together.
The actual cost is often calculated not only to serve an individual metric itself but also to determine cost variance. Cost variance shows the difference between the planned and actual costs within the project timeline. The difference will help project managers determine more accurate budgets for the future.
5. Cost Performance
Equally important to understanding the accuracy of your budget is to understand how efficiently your budget was utilized. Cost performance evaluates the value of the work performed in relation to the actual costs it took to accomplish the earned value. Tracking this metric will allow you to forecast it better, resulting in a more accurate budget in the future.
6. Customer Satisfaction
With any project, a significant goal is to meet, if not exceed, customer expectations. For this reason, it is crucial to track customer satisfaction to determine if you were successful in doing so.
A customer satisfaction score provides a quantifiable measure of quality for your completed project, and it is typically guided by customer survey data. Each company and project may develop a unique customer satisfaction score with variables of different importance, but it essentially determines if the project met customer expectations.
Beyond these essential metrics, other metrics to be considered include productivity, employee satisfaction, schedule variance, number of errors, billable utilization, and more.
Metrics Mean Value and Improvement
Project management metrics are essential for tracking the progress and success of your project. Without tracking your project, you may be headed for project failure without even realizing it. Beyond this, metrics help you prove the value of your project while providing you the insights you need to improve current and future projects. With this information, you can turn a project around before it is too late and ensure that future projects not only avoid the same obstacles but find greater success.
