Having the Right Key Performance Indicators for Your Dashboards

Driving a project to success requires having real-time project performance and status reporting to provide clear and concise information of the key drivers of the project performance. Like a car dashboard, the project dashboard is crucial for the project stakeholders to provide them with the insight to make better and faster decisions that could affect the success of their journey or project life cycle stages.

The layout, information shared, level of detail, key performance indicators and other components of dashboards used in projects centric environments vary depending on the needs and role of the dashboard recipient. Some of those recipients could be interested in having the overall performance of all projects being delivered by the organization or a portfolio of projects. Others could be interested to have the performance details of projects that are part of a program or a strategic initiative while others could be interested in the details of a single specific project. In addition, some recipients might be interested in the performance details of a specific phase of the project life cycle like design stage, bid/award, construction, defects liability among others. Further, other recipients could be interested in performance details as it relates to project cost, schedule, risk, procurement of contracts, documents, quality assurance and quality control, health and safety, environment, sustainability among others.

All of those dashboards provide a real-time synopsis of the project performance information in a visual format that is easy to read, remembered and understood by the dashboard recipient. All of this project information should be based on a single data source otherwise those dashboards could provide conflicting and contradicting information for the different recipients. The damage that could result from not having a single version of the truth could also extend to negative impact of taking uncoordinated decisions that although it could help in addressing the issues of one recipient but it will create new issues for other project team members. Therefore, unless the organization impose formal processes for capturing and sharing project’s data, the likelihood of having conflicting and contradicting information will always be on the high side. 

Key Performance Indicator (KPI)

Similar to the gauges and other meters on your car dashboard, a project dashboard will always include a number of key performance indicators (KPI) to report on the performance, health and status of the project in a visual format. There are hundreds of KPIs that are being used by projects intensive organizations to help them to manage the delivery of their projects portfolio. Some of those KPIs are used to manage the project scope, cost, schedule, documents, risks, issues, quality, safety, sustainability, stakeholders, communications among others.

The list below is an example of some of the projects’ KPIs that are available in the KPI Mega Library book by Rachad Baroudi (https://books.google.ae/books/about/Kpi_Mega_Library.html?id=vDvHbwAACAAJ&redir_esc=y). Of course, there are many other books and manuals that provide example of KPIs used in managing projects performance.

• # conflicts arisen during the project
• % decrease in complaints after project execution
• % of overdue project status reports
• % of overdue project tasks
• % of projects on time
• % of projects or resources allocated through business unit approval
• % of projects receiving Quality Assurance review
• % of projects with high risk profile
• % of projects with missed milestones
• % of projects with scope changes
• % of projects without deviation of planned hours of work
• # project cost performance index
• # project cost schedule index
• % budget allocated to budget spent ratio
• % of projects on budget
• % of projects on time and on budget
• % of projects without deviation of planned budget
• % project budget variance
• % projects on budget
• % Full Year Budget Vs. Full Year Actual Cost 

For example, for the KPI “% Full Year Budget Vs. Full Year Actual Cost” which is used to report on the ratio of the total project cost to the full year allocated budget. The total project cost is the approved total value of work in place submitted by the contractors using the monthly progress invoice during a specific fiscal year. The full year allocated budget is amount of budget that has been reserved for this project to complete the scope of work planned for the same fiscal period along with contingency allowance for scope creep and variations.

The objective of this KPI is to measure the project management team ability to meet forecasted expenditure targets committed by the project owner. Failing to spend the expenditure targets means that those funds are sitting idle without generating the value that they are supposed to produce as well as depriving other projects from using those funds to pay for work in place. On the other hand, if actual cost spending exceeds the allocated budget spending, then the organization will not be able to fulfill its obligation to make payment for the completed works which could result in a claim for failing to pay or delayed payments.

The performance threshold for this KPI can differ from one organization to another but the best score is achieved when the actual cost coincides with the allocated budget spending. The preferred performance, or the green zone, could allow +/- 5% variance. The warning, alert or amber zone could allow from +/- 5% to +/- 10% variance while the red zone will be any variance that exceeds +/- 10%.

How Can Technology Help in Creating Trust Worthy KPIs?

Using PMWeb Project Management Information System (PMIS), the budget for each project at the desired level of detail can be created. This will be followed by distributing the budget value for each line item into the project’s performance periods. The distribution will be aligned with the project’s schedule and how the allocated budget will be spent for each line item. This will enable the project team to have a spreadsheet report that summarizes the planned budget for each period. For a specific fiscal year, the planned budget value for that particular year will be summed up.

For the actual cost spending, PMWeb Progress Invoices module will be used the capture the details of the work in place for each period. When the progress invoice is formally review and approved, it becomes the actual cost that the project owner needs to pay. PMWeb captures the progress invoices details for all awarded project contracts and the progress invoices for each period. The actual cost will include the approved work in place, materials on site and payments against approved variation orders. The actual cost for a specific fiscal year will be the total of all approved progress invoices approved within that year for all awarded contracts.

The automatically generated tables not only avoid the requirement of having to create them using MS Excel, but also helps in enforcing the trust worthiness of the information included in those report. The forms used to capture the project budget, awarded contracts and progress invoices are examples of the many forms that are available out-of-the-box from PMWeb. In addition, the custom form builder enables creating unlimited number of new forms when needed.

For each form, there will be pre-defined fields to capture the needed data for the needed information. Those fields could be assigned for different project team members to fill depending on the authority levels assigned to each. In addition, supportive documents such as the awarded agreement document and other details can be attached to the form to further enforce transparency. The completed form can be assigned a workflow to formalize the submit, review and approve steps to enforce accountability. Those workflow steps will be in line with the project manual which sets the procedures for managing the different project processes.

The “% Full Year Budget Vs. Full Year Actual Cost” KPI will be automatically calculated by PMWeb Report Writer tool which is used to create the different tabular and graphical reports and dashboards. The same approach will be followed in calculating the many other KPIs that an organization needs to have in their dashboards to provide the decision maker with the insight to make better and faster informed decisions. The drilldown approach adopted by PMWeb in creating the projects’ dashboards enables the decision maker to drilldown to the data source from which the KPI was created. For example, if the reviewer of “% Full Year Budget Vs. Full Year Actual Cost” KPI wanted to have the details of the reported actual cost for a specific period for a specific contract agreement, this can be done by drilling down to the project invoices log, then select the specific contract agreement and finally select the progress invoice for that particular period. The reviewer can view the record and the documents attached to the record as well as the workflow steps which detail who approved the record and if there any comments made.

The same approach will be repeated for all the other key performance indicators that the organization might require for assessing their projects performance. Actually, it is also common that there are some KPIs that depend on the value of other KPIs. For example, the organization could have a single KPI to report the overall project performance. This KPI could be based on KPIs like the project safety performance indicator, multiple cost performance indicators, multiple schedule performance indicators and quality performance indicator. Each one of those KPIs would have weight factor for which the overall project performance KPI will use to determine how good the project is performing. For example, the Safety KPI could have a weight of 10%, the two cost KPIs could have a weight of 30%, the three Schedule Milestone KPIs could have a weight of 35% while the Quality KPI will have 25% which will bring the total weights to 100%.