Metrics

METRICS

Most senior executives are not interested in the measures of success used by project management:

– scope

– time

– cost

– quality

Their measures of success are:

– profitability

– return on investment

– delivery of benefits

– taking advantage of windows of opportunity

Executives used to be interested in just two things about projects:

– when will they be finished

– what they will cost

Executives are now more interested in:

– what mix of potential projects will provide the best utilization of human and cash resources to maximize long-range growth and return on investment for the company?

– how do the projects support strategic initiatives?

– how will the projects affect the value

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Potential Metrics

• Getting products to market on time resulting in safeguarded or increased revenue.

  1. How long does it take to deliver value?  Measure time from definition to revenue.

• Development Metric:  Cycle Time.   How long does it take to complete a story?  (This measurement will be out of control at first, but over time should stabilize.  Also encourages small story/units.)
  
  Portfolio Metric:  Implementation target/ dates - on/off plan.
  
  

  • Driving delivery of quality products with increases client satisfaction and reduces warranty claims.

• CSD metrics
  
  Quality/bug metrics
  
  

  • Reducing cost through supporting procurement in the effective acquisition and use of material resources.

    1. Can we lower the cost of inputs?

  • Increasing productivity by assigning human resources to priority work and ensuring that they are assigned according to their skill sets.

• Success metric % - indicator of ability to deliver
  
  Development Metric:  Number of new unit tests written.  Most closely aligns with equal-sized function points.  Also, encourages unit testing.
  
  

  • Increasing profitability by emphasizing projects that provide maximum return on investment.

    1. Revenue producing/ ROI  (drives resource engine) –or-

       1. IRR is sometimes deferred – e.g. return from platform investment will not pay off for a few years.  Also, it’s strategically vital to  long term viability.  So ROI is *not* necessarily the most important thing:

    2. Strategically important (what are we best at?) .. E.g. platform strategy/ sharing.

• Project/program selection  & change management – demonstrable tie to outcome….
  
  

  • Planning/forecasting human resource and equipment demand and comparing them to available resource and equipment in order to better understand enterprise capacity and meet present and future human resource and equipment needs.

• Use of contingency budget & ability to stay within bounds of resource limits
  
   
  
  Are we doing the right things?
  
  

  • % of Portfolio spend in strategic objectives?

  • % of Portfolio spend in “run the business”

  • % of Portfolio in “grow the business”

  • % of Portfolio in “innovate the business”

• …… Are our % allocations consistent?
  
  

  • % of Portfolio in Short/Medium/Long-term projects 

  • % of portfolio in Large and Extra Large Projects (mitigation of risk)

Strategic Alignment

1) % of Projects Aligned with Strategic Objectives. The number of projects, or weighted cost of projects, that are aligned with at least one strategic objective over the total of projects.

2) Investment Class Targets ($). Set investment targets for Run, Grow, and Transform type of projects and analyze spend variance against these. A simpler alternative is to report the percent of effort/cost going toward ‘Keeping the Lights On’ (KLO) activities for IT.

** we should do this across GPM/GE & not within portfolio (because the numbers will not be consistent.)  Work as a team to lower maintenance cost across the board.

3) Business Unit Investment Targets ($). Set investment targets for cost and effort devoted to each business unit and analyze spend variance against these.

Operational Efficiency

4) % Resource Utilization. The percentage of time spent on productive activities such as project work, ticket resolution, etc.

** is peoplesoft data reliable to measure development –vs- meetings, etc?

5) % Project Effort. For IT PMOs, the percentage of time spent working on projects, as opposed to maintenance, enhancements and tickets. This should be measured against a target to show delivery of new business/technology investments.

6) % Project Churn. The number of projects put on hold or cancelled over the total number of projects in a given period.

Execution

7) % Increase in Project Success Rate (or % Decrease in Failure Rate). This assumes success is defined not just by time and budget, but by delivering the business requirements (based on satisfaction surveys of the business stakeholders post-delivery).

8.) Variance to Budget ($). Cost savings measured by positive variances to budget. This assumes project costs are accurately estimated during planning. Earned Value can also be used for this, for instance looking at the % of projects with a Cost Performance Index (CPI) over 1. CPI = Budgeted Cost of Work Performed (BCWP)/Actual Cost of Work Performed(ACWP). BCWP is Earned Value (this is the PMI definition). PMO will need to monitor CPI on a per project basis.

Business Value Delivered

9) Customer Satisfaction (%). A measure of stakeholder/customer satisfaction of business value delivered based on surveys post-delivery.

10) Business Value Realized. Business value is realized when the right projects are selected and executed at the right time. Selecting the right projects involves estimating Economic Value Add from a project. This is best if based on actual benefits measurements post-project, but in reality the estimated benefits are simpler to calculate tied back to the project delivery date. This can be measured in cost savings, additional revenue, increased customer satisfaction etc. A standard scoring model can be used to normalize across different benefits, and business value points used to demonstrate value delivered.