Project Management Metrics – Key Techniques

A project, by the definitions provided by the PMI institute, goes through five distinct phases or ‘process groups’:

  • Initiating
  • Planning
  • Executing
  • Monitoring and Controlling
  • Closing

All areas are crucial to the success of the project and each need to be handled with due diligence. But to ensure the eventual success of the project, it is necessary to have systems in place to determine if everything is moving along smoothly. And this is where defining, setting up and continuously monitoring metrics and specific reports inherent to the project become paramount.

The nature and type of reports (and metrics) being presented can vary depending on the type of project and the actual technical attributes of the project’s primary deliverable. Manufacturing plants may rely on one of set of metrics while software releases may rely on another. Knowing which metrics types to leverage is an important consideration for the project manager. Not being cognizant of certain key pieces of data or metrics can lead to things being missed or problems being overlooked. That is why the project manager must be vigilant in this regard.

With that being said, what are some of the key metrics types that a project manager may wish to leverage for his/her project?

Time Metrics

From the standpoint of metrics, this is usually the project schedule itself. All projects should have some sort of timeline, complete with key milestones and target dates. By having this schedule drafted up front, the project manager will be able to determine how things are proceeding with the project. Extrapolation can be used in conjunction with other key metrics to determine if project schedule slippage is a concern or not.

Cost Metrics

When referring to project costs, this is basically the project’s primary budget. Most projects will have a budget of some sort with payouts performed either up front or on a schedule basis. (Example: a quarterly budget) From the standpoint of how to manage the budget, having an idea of the general cash flow of the project is the best mechanism for ensuring that the project budget is being maintained. So if the project manager has a metric of some sort that is monitoring cash flow of the project on a monthly basis, he/she will be able to adequately estimate if there are any potential cost over-runs that could occur.

Resource Metrics

Every project will have a set number of resources allocated to it. This is the human capital portion of the project. These resources are usually broken down by skill set and assigned to specific portions of the project. The amount of man hours or ‘level of effort’ that each resource contributes needs to be monitored on an individual basis. This will allow the project manager to determine if any resources are not keeping up with their workload or are becoming overwhelmed. There is sometimes a natural tendency for managers to allocate work to their most skilled resource. But one must be mindful of the workload that resource has on their plate already.

Scope Metrics

From the standpoint of scope, this refers to the primary enhancements or features inherent to the project deliverable. The scope should be defined up front, in the initial planning stages. Scope can change during the project release cycle, but caution must be taken as this will affect the overall project as a whole. (For further information, please read the post: Scope, Time and Cost – Managing the Triple Constraint) In order to ensure that overall scope is being handled, the completion rate of features needs to be monitored. This can be achieved by either monitoring the features themselves individually, or by using trend analysis to determine completion rates. (i.e. open/close rates or burndown charts) This trend analysis will give progress on scope but also allow for extrapolation to determine if target milestones can be met based on the outstanding scope remaining on the project.

Quality Metrics

As the project matures and the deliverable is being produced, ensuring the quality of the deliverable becomes a very important attribute of the project. As such, the metrics in relation to that quality also need to be monitored on a regular basis. Generally speaking, issues (bugs) with a particular deliverable are being discovered and cataloged during the product’s life cycle. The project manager should be monitoring these issues as they are discovered and resolved. Normally, a trend chart can produce a curve of issue discovery and resolution, usually by monitoring open/close rates of those issues. The curve should swing upwards at the initial stages of the project, normalize (flatten) and then begin to decline. This trend can be extrapolated against to ensure that the quality level of the product deliverable will be at acceptable standards at release time. Note that different release cycles (alpha, beta releases) will also cause spikes to the curve. Factoring in those release cycles into the overall project life-cycle is also imperative. Note that depending on the process being utilized, quality may have a very high set of standards, such as a Six Sigma level. The project manager will also need to be cognizant of the organization’s quality standards and processes to ensure that the project conforms to expectations.

Action Items

Finally, if the project manager is keeping regular status meetings and maintaining engagement with the team, there will be action items that need to be cataloged and revisited on a regular basis. Every action item needs to be addressed as it manifests and no action items should ever be left unattended. The project manager should keep a running tally of what action items are outstanding, who is working on them and what the estimates are for their resolution.

Building a PMO – Specific Techniques and Concepts

Most individuals within the realm of project management are intimately familiar with the concept of the Project Management Office (PMO). A centralized agency within an organization, the PMO serves the purpose of defining the process standards relating to project management. The PMO will be the one stop shop for all matters relating to project management and will strive to introduce standardization across projects within the organization. Depending on the structure of the organization (matrix, functional, projectized), the PMO could also be the primary reporting structure for the project and program managers that work within the organization.

PMOs are not always part of an organization. And if they do exist, they are often times segmented in specific lines of business rather than functioning across the entire organizational spectrum as a whole. The decision to utilize a PMO is one that has to be endorsed by the senior leaders of an organization who recognize the value add of a centralized agency responsible for project management and process standards.

With that being said, suppose you are an organization that recognizes the value of a PMO, but has not yet instituted it within your organization. How would you proceed and what steps should be taken to create a viable PMO that will serve the company well?

Receive Endorsement and Support from Senior Management

As alluded to earlier, senior sponsor support is absolutely imperative when beginning the process of establishing a PMO. There could be a requirement for an organizational change or a fundamental shift in the way the organization operates internally. With that being said, having the full endorsement and support of senior leaders is a must. Senior leaders will also have the clout and influence to be able to ensure adoption of any new processes or procedures that result from the new PMO.

Decide how the PMO will be Setup and Staffed

Depending on whether the PMO is part of a business unit or an over-arching entity that spans the entire portfolio of the organization, it is important that care is taken when setting up its initial structure. Setting up a PMO does not have any template per se, but how it operates will be heavily influenced by the general structure of the organization itself. (For more information on organizational structures, please read the post: The Power of the PMO) Whatever structure is eventually agreed upon will be dictated by the specific variables conducive to the business and its inherent culture. It is also extremely important to staff the PMO with project and program managers who have strong working knowledge of PM fundamentals, but also be cognizant of the end game business strategy of the organization. The PMO is after all, trying to achieve some endgame and it is important that the PMs assigned to it are fully aware of what the business goals are and what portfolio and process strategy the business is attempting to achieve. This will ensure alignment between project management, senior leadership and the remainder of the organization.

Standardize and Document

Tackling the standards, best practices and process methodologies right at the inception of the PMO will be a great way to begin effective brainstorming on what aspects of the organization’s current concepts require change or improvement. Discussing this information up front will also allow for all the newly assigned project/program managers that make up the PMO constituency to bring their ideas to the table and collaborate right out of the gate. Any new concepts, processes, methodologies or business organizational changes should all be documented thoroughly for future reference and sharing as needed.

Instantiate Training and Transfers of Information

Whenever a PMO is created, it is important that anyone who will be directly (or indirectly) involved in either maintaining it or utilizing its services, be brought up to speed as needed with adequate training. This can include specific training for the project managers who may be new to the idea of a PMO and need additional proficiency training. Additionally, any members of the organization who will be tasked with adhering to the new processes or methodologies that will become doctrine within the organization are given proper TOIs (Transfers of Information) to ensure they are aware of how to utilize any new concepts for their own specific areas.

Set Measurement and Success Criteria

Whatever they may be, some baseline success criteria should be set when instantiating a new PMO. This could involve specific milestones like defining the new internal process or certain monetary measures, like ‘X’ amount of cost savings over a given timeframe. Whatever the criteria, it is important to demonstrate the value add of adopting the PMO. Note that the measurement criteria should not be pie-in-the-sky values or completely ambiguous and generic goals, but something tangible that can be referenced.

Continue to Monitor and Evolve the PMO

Once created, the PMO should not remain static. It should grow and mature like any other aspect of the business. New ideas from the mainstream project management world or new technologies can be evaluated and adopted. Structural changes within the organization can also be considered. Like anything in life, the success of the PMO will be its adaptability and vigilance.

*Conclusions*

The establishment of a PMO is fantastic way for any organization to improve its internals. Whenever planning and developing the PMO, it is vitally important that it is performed in a way that aligns well with the existing structure of the organization. Although it could also be part in parcel with an organizational shift; the latter is fine provided it was performed and sanctioned by the senior leaders. Whatever the structure, the PMO should seek to optimize its capabilities against this structure to provide maximum benefit to the organization as a whole. There will likely be some adjustments to the PMO during its infancy in order to adequately adjust and align itself with the organization. These growing pains are normal and should be encouraged to ensure the PMO eventually reaches maximum potential.

Once created, the capability of the PMO will become self-evident as it streamlines processes and develops common standards. This will provide the organization with continuity, reduction in duplication of efforts, reduced costs and improved productivity.