What Performance KPIs Predict Project Execution Outcomes

I’d like to share the key metrics I discuss during our monthly project review and steering committee calls. I present project execution data in a way that provides a comprehensive progress report, ensuring program managers, portfolio managers, and directors are fully informed and engaged in my projects’ journeys.

1. Scope KPIs

Requirements Completion Rate: Measures the percentage of requirements that have been completed. High completion rates indicate good progress, while low rates may suggest scope creep or challenges in requirement fulfilment. We use JIRA extensively to capture and track all the requirements, and exporting this data from JIRA is very easy.

Change Requests: Track the number and impact of change requests. A high number of change requests can signal issues with initial planning or scope definition. Since we use a hybrid model, most of the requirements are captured in advance. However, any new change requests are added to the backlog, and we try to deliver them on a best-effort basis according to the priority defined by the business team. If we receive more change requests and face budget or time constraints, we raise a change request using ServiceNow and treat it as a new project.

2. Time KPIs

Schedule Variance (SV): Compares planned progress to actual progress. A positive SV indicates the project is ahead of schedule, while a negative SV indicates delays. This is the standard execution monitoring KPI used widely across all projects.

Schedule Performance Index (SPI): Ratio of earned value (EV) to planned value (PV). SPI > 1 means the project is performing well, while SPI < 1 indicates delays. I have not used this KPI extensively, but I assume that it might be applied to projects that are being micromanaged by leadership.

3. Cost KPIs

Cost Variance (CV): The difference between budgeted cost and actual cost. A positive CV means the project is under budget, while a negative CV indicates cost overruns. This KPI is less informative and therefore only presented to a selective audience. It needs to be coupled with Time and Scope KPIs to provide holistic information.

Cost Performance Index (CPI): Ratio of earned value (EV) to actual cost (AC). CPI > 1 suggests cost efficiency, while CPI < 1 indicates budget issues. We use ServiceNow and JIRA to monitor projects. To capture this KPI, we have something called ‘Physical Progress,’ which we mark every week in ServiceNow.

4. Quality KPIs

Defect Density: The number of defects per unit of work (e.g., lines of code, function points). High defect density suggests quality issues. Furthermore, using JIRA, we also track the number of issues raised during internal testing and compare them with the number of issues raised during Business UAT to review our testing efficiency.

Test Coverage: The percentage of the system tested. High test coverage can indicate thorough quality assurance practices. We prepare the test cases with the business team and the end users to ensure comprehensive coverage of all the scenarios our tools would be used for.

5. Risk KPIs

Risk Register: The number of identified risks and their status. A growing risk register or unresolved high-priority risks can indicate potential challenges. This is presented in almost all weekly, monthly, and PRC calls. I prepare this using previous project experiences and risk management activities for all new projects. Risk charters, RAID sheets, and risk metrics are widely used for this. I mostly use MS Excel to create and maintain my risk charters, as it’s easy to use.

Risk Mitigation Effectiveness: Measures how effectively identified risks are being mitigated. Ineffective mitigation strategies can signal upcoming difficulties. I learned to create a Risk Assessment Matrix through YouTube and developed an easy but effective charter for monitoring all the risk KPIs. Here is the link to that video: [YouTube Link](https://www.youtube.com/watch?v=KIS4L4kn0RM).

6. Resource KPIs

Resource Utilization Rate: The percentage of resource capacity being used. High utilization can indicate efficient use, but overutilization can lead to burnout and decreased productivity. This is a monthly activity that I do with my program manager and director, as it is extensively used for planning pipeline projects. I use a Capacity Utilization chart, which I fill out from one-on-one interactions with each team member as a monthly exercise.

Team Morale: Surveys or feedback mechanisms to gauge team satisfaction and engagement. Low morale can affect productivity and project success. This is tracked daily using a ‘Yellow’ whiteboard (www.sensorit.en), where each team member highlights their mood and morale before starting the day. Since we initiated this from other domains recently, we are still reviewing how this KPI can be leveraged to increase productivity.

7. Stakeholder KPIs

Stakeholder Satisfaction: Regular feedback from stakeholders on their satisfaction with project progress and outcomes. High satisfaction indicates alignment with stakeholder expectations. This is a qualitative KPI, and we capture feedback from users on three major aspects: Time, Scope, and Quality.

Communication Effectiveness: Measures the frequency and quality of communication with stakeholders. Poor communication can lead to misunderstandings and misalignment. Currently, we don’t have a KPI to measure the effectiveness of my communications, but this is something I will be researching further. Perhaps my next post will focus on this.

8. Delivery KPIs

On-Time Delivery Rate: The percentage of deliverables completed on time. High rates suggest good schedule management. This is tracked using the ServiceNow tool and is one of the most important KPIs monitored across all domains in my company. I cannot emphasize its importance enough; we have a mandatory course for each of us to understand On-Time Delivery in-depth, as there are penalties associated with projects. We use ServiceNow to track each project phase, and the PMO team extracts the same data to review On-Time Delivery with their respective audiences.

Milestone Achievement: The percentage of project milestones achieved on schedule. Falling behind on milestones can indicate broader project delays. We track this at the project level and review it almost daily. I primarily use MS Excel and Microsoft Project for this. Again, since certain tools require licenses, MS Excel and SharePoint are widely used for creating timelines and tracking progress.

Practical Examples from IT Companies:

1. Google - Data-Driven Project Management: Google uses extensive data analytics to track KPIs across projects. By continuously monitoring schedule variance, cost variance, and defect density, they can predict project success and address issues proactively.

2. Amazon Web Services (AWS) - Customer Satisfaction as a KPI: AWS places a strong emphasis on customer satisfaction. They regularly measure stakeholder satisfaction and feedback, ensuring their projects align with customer needs and expectations, which helps forecast project outcomes.

3. IBM - Comprehensive Risk Management: IBM’s project management approach includes detailed risk registers and regular risk assessments. They track the number of risks identified, mitigated, and resolved, which helps them anticipate challenges and prepare mitigation strategies.

Conclusion:

Monitoring these KPIs allows me to gain insights into the health and progress of my projects. By closely monitoring these indicators, I can forecast potential outcomes and take proactive measures to ensure project success. What KPIs have you found most effective in your projects? Share your thoughts and experiences in the comments!