Pmo Kpis 1719578918
Pmo Kpis 1719578918
1. Relevance to Objectives
KPIs are directly tied to the goals and objectives of the entity being measured. They provide insight into
whether these objectives are being met.
2. Measurability
KPIs are expressed in quantifiable terms, allowing for objective measurement and comparison. This
could be in the form of percentages, ratios, counts, or other numerical values.
3. Visibility of Performance
KPIs provide a clear and easily understandable indication of performance. They offer insights into
areas that require attention or improvement.
4. Timeliness
KPIs are often time-bound, allowing for monitoring of performance over specific periods. This helps in
identifying trends and making timely adjustments.
KPIs are aligned with the overall strategy of the organization or project. They help ensure that efforts
and resources are directed toward strategic priorities.
6. Actionable
KPIs should be actionable, meaning that the insights gained from them can be used to inform
decision-making and drive improvements.
7.1 LEADING, LAGGING, AND COINCIDENT INDICATORS
Leading Indicators Leading indicators are metrics or data points that provide insights
into potential future trends or changes in a system. These
indicators are used to predict or forecast future outcomes,
allowing organizations to take proactive measures and make
informed decisions.
Leading indicators are valuable for anticipating shifts in
performance, identifying opportunities, and mitigating risks.
Predictive Nature
Leading indicators are forward-looking, providing early signals or warnings about potential future
changes. They are used to anticipate shifts in performance, market conditions, or other relevant
factors.
Proactivity
Organizations use leading indicators proactively to take preventive measures, adjust strategies, or
capitalize on emerging opportunities. They are a tool for staying ahead of changes rather than
reacting to them.
Causality
Leading indicators often have a causal relationship with future outcomes. Changes in leading
indicators may influence or cause subsequent changes in other metrics or aspects of a system.
Varied Metrics
Leading indicators can be diverse, encompassing financial, operational, customer-related, and other
metrics. The specific indicators chosen depend on the goals and characteristics of the organization.
Strategic Planning
Leading indicators are crucial for strategic planning. They help organizations set proactive strategies
based on early insights into potential future developments.
Risk Management
By monitoring leading indicators, organizations can identify and mitigate risks before they escalate.
This is particularly relevant in industries where early detection of issues is critical.
Competitive Advantage
Leading indicators can provide a competitive advantage by allowing organizations to innovate, adapt,
and respond quickly to changing market conditions.
Resource Allocation
Organizations can allocate resources more efficiently by aligning them with areas identified by
leading indicators as having high potential or requiring attention.
Manufacturing
Finance
Technology
It's important to note that the effectiveness of leading indicators can vary based on the context and
industry. Organizations often use a combination of leading and lagging indicators to gain a
comprehensive understanding of their performance and make well-informed decisions. Monitoring
leading indicators helps organizations stay ahead of potential challenges and capitalize on emerging
opportunities.
Lagging Indicators Lagging indicators are measurable and observable factors that
reflect the impact or results of past actions, events, or changes.
These indicators provide a retrospective view of performance over
a specific period, confirming the success or failure of strategies,
projects, or initiatives that have already been implemented.
Lagging indicators are backward-looking and offer insights into
historical outcomes.
Reflective Nature
Lagging indicators are backward-looking metrics that reflect the impact or results of past actions.
They provide a retrospective view of performance over a specific period.
Confirmation of Outcomes
These indicators confirm whether strategies and actions taken in the past were successful. They
measure the consequences of completed projects, initiatives, or changes.
Historical Perspective
Lagging indicators provide a historical perspective on performance. They are often used to analyze
trends and assess the effectiveness of strategies over time.
Outcome-Driven
Explanation: Lagging indicators measure outcomes or results, making them useful for evaluating the
success or failure of specific endeavors or the overall performance of a system. Develop KPIs /
Performance Measures
Performance Assessment
Lagging indicators are critical for assessing the actual results of actions and initiatives. They help
determine whether objectives were met and how well the organization performed.
Decision Validation
Organizations use lagging indicators to validate and verify the impact of decisions made in the past.
They provide evidence of the success or failure of implemented strategies.
Continuous Improvement
Lagging indicators offer insights into areas that may need improvement. Organizations can use this
information to refine strategies, processes, and operations for better future outcomes.
Benchmarking
Lagging indicators serve as benchmarks against which current performance can be compared. They
help organizations set realistic goals and expectations based on historical performance.
Financial Metrics
Sales Performance
Project Management
Customer Satisfaction
Lagging indicators are a crucial component of performance measurement and evaluation. While they
offer insights into historical performance, organizations benefit most when they integrate them into a
comprehensive performance management strategy that also considers leading indicators and other
relevant contextual factors.
Real-Time Reflection
Cyclical Movement
They move in sync with the business cycle, rising during economic expansions and falling during
contractions.
Immediate Impact
Economic Health
Coincident indicators offer a current and direct reflection of the overall health of the economy.
Policy Implications
Policymakers, including central banks and governments, use coincident indicators to assess the need
for economic stimulus or intervention.
Analysts and economists use coincident indicators to track the current phase of the economic cycle,
helping them make informed predictions about future trends.
Policy Formulation
Governments and central banks use coincident indicators to formulate economic policies and
respond to the immediate needs of the economy.
Employment Levels
Industrial Production
Coincident Indicator: The output and production levels of industrial sectors, including
manufacturing, mining, and utilities.
Explanation: Increasing industrial production is indicative of economic growth, while a decline
suggests a slowdown or contraction.
Coincident Indicator: The total value of all goods and services produced within a country's
borders.
Explanation: While overall GDP is considered a lagging indicator, certain components or real-time
estimates can act as coincident indicators, providing insights into the current economic state.
Personal Income
Coincident Indicator: The total income received by individuals, including wages, rents, profits, and
transfer payments.
Explanation: An increase in personal income is associated with economic growth and higher
consumer spending.
This table provides a concise comparison of leading, lagging, and coincident indicators, highlighting their
definitions, timing, examples, significance, use in analysis, interrelation, and application. Understanding the
distinctions between these types of indicators is crucial for a comprehensive analysis of economic trends.
Definition Metrics that change before Metrics that change after Metrics that move in
overall economic shifts, the economy has conjunction with the overall
providing early signals undergone a shift, business cycle, reflecting
about potential changes. confirming outcomes of the current state of the
past events. economy.
Timing Forward-looking, predicting Backward-looking, Simultaneous with the
future trends. confirming past trends. current state of the
economy.
Significance Predictive, used for Reflective, assess the Real-time reflection of
proactive decision-making. success of past strategies. current economic
conditions.
Aspect Leading Indicators Lagging Indicators Coincident Indicators
These practical step-by-step methodologies and tools were designed to help organizations:
Select and design performance measures that are far more meaningful than simple brainstorming or
benchmarking can produce
Get buy-in from staff and stakeholders to enthusiastically own performance measurement and
improvement
Bring measures to life in a consistent way, using the right data and with the right ownership
Design insightful and actionable reports and dashboards that focus discussion on improvement
Convincingly hit performance targets, and make measurement about transformation
7.2.1 PRE-MEASUREMENT
1. Engaging Leadership
2. Communicating “Why formally measure performance?”
3. Establishing Teams and Roles
4. Agreeing on Process and Procedures
5. Considering Automation
6. Fostering a Performance Culture
1. Engaging Leadership
Objective
Secure commitment and support from organizational leadership to ensure the success and
sustainability of the performance management process.
Actions
Outcome
Clearly communicate the purpose and benefits of formal performance measurement to all
stakeholders.
Actions
Articulate the link between performance measurement and achieving organizational goals.
Emphasize how formal measurement contributes to transparency, accountability, and continuous
improvement.
Address concerns and provide a compelling case for the value of measuring performance.
Outcome
Objective
Define roles and responsibilities for individuals and teams involved in the performance
management process.
Actions
Outcome
Clearly defined roles and responsibilities for all involved in performance management.
Increased collaboration and accountability among team members.
Objective
Establish standardized processes and procedures for consistent and reliable performance
measurement.
Actions
Develop a documented framework outlining the steps in the performance management cycle.
Clearly define the methodologies for data collection, analysis, and reporting.
Ensure agreement and understanding among stakeholders on the established processes.
Outcome
5. Considering Automation
Objective
Explore the possibility of leveraging technology and automation tools to streamline performance
management processes.
Actions
Assess available technology solutions for data collection, analysis, and reporting.
Implement automation tools where appropriate to reduce manual efforts and enhance accuracy.
Train staff on the use of technology tools to support performance measurement.
Outcome
Objective
Cultivate a workplace culture that values performance improvement, learning, and adaptability.
Actions
Outcome
A culture that embraces continuous improvement and values the importance of performance
measurement.
Increased employee engagement and commitment to achieving organizational goals.
MEASURE
There are four process components within the measurement development phase of the MPRA framework:
Objective
Clearly define the objectives or goals that an organization, project, or process aims to achieve.
Actions
Engage stakeholders to articulate and clarify organizational goals.
Define specific, measurable objectives that align with the overall strategy.
Ensure that objectives are clear, achievable, and directly tied to the organization's mission.
Outcome
Objective
Explore and consider various measures that can be used to assess performance against
objectives.
Actions
Identify different types of performance measures, including quantitative and qualitative indicators.
Consider alternative approaches to measurement, recognizing that different measures may
capture different aspects of performance.
Evaluate the feasibility and relevance of potential measures.
Outcome
Objective
Actions
Outcome
Objective
Clearly define and document the chosen performance measures for each objective.
Actions
Outcome
A well-documented set of performance measures with clearly defined parameters.
Guidelines for data collection, analysis, and reporting.
PERFORM
The performance review cycle follows a regular pattern (usually quarterly) organized around a simple
pattern: set targets, implement improvement actions, track performance, and learn from the results. In the
Perform phase employees organize their activities around two process components:
Objective
Establish specific, measurable targets for each performance measure to indicate the desired level
of achievement.
Actions
Outcome
Objective
Actions
Outcome
REVIEW
In the Review phase of the process, data is transformed into evidence-based knowledge and
understanding. The Review phase is organized around two process component steps:
Objective
Actions
Outcome
Objective
Actions
Outcome
ADAPT
The Adapt phase of the process explores whether improvement strategies were effective and correctly
executed, and if assumptions turned out to be valid. The final stages of a comprehensive performance
management and improvement process involve reporting, sharing insights, and fostering a culture of
continuous learning. The Adapt phase is organized around four process component steps:
1. Report
2. Share
3. Learn
1. Report
Objective
Communicate performance results and insights to relevant stakeholders through formal reports.
Actions
Outcome
2. Share
Objective
Facilitate open and transparent sharing of performance insights across the organization.
Actions
Conduct regular meetings or presentations to share performance data with teams and
departments.
Encourage discussions around successes, challenges, and areas for improvement.
Create a platform for collaborative problem-solving and knowledge exchange.
Outcome
3. Learn
Objective
Actions
Outcome
The MPRA cycle is a continuous and iterative process, as the adapted strategies and changes become the
new baseline for the subsequent cycle. This iterative nature allows organizations to learn from experience,
respond to changing conditions, and continually refine their approaches for ongoing success and
improvement. The MPRA framework is widely applied in areas such as performance management, project
management, quality improvement, and organizational development
What is a SMART Goal? A SMART goal is a framework designed to guide the setting of clear
and achievable objectives. The acronym SMART stands for Specific,
Measurable, Attainable, Relevant, and Time-bound. This framework is
widely used in various fields, including business, education, project
management, and personal development, to ensure that goals are
well-defined and have a higher likelihood of success.
The purpose of the SMART methodology is to provide a template to help you write actionable, achievable
goals in an organized fashion. And it’s done just that. Since its debut, the SMART goal system has become
popular across the globe, and variations of the acronym have developed over the decades.
Each element of the SMART acronym adds crucial value to the goal. Address each component separately
before piecing them together.
Specific
The first step in the SMART goal setting process is to be as specific as possible with your goal.
We recommend addressing the 5 Ws when making a goal specific: why, what, when, who,
where.
It’s important to know how to measure SMART goals. Goal tracking is a vital part of the goal-
setting process. This keeps teams accountable for measuring the progress, success, or failure
of their goals.
By identifying Key Performance Indicators (KPIs) during the early stages of setting SMART
goals at work, you’ll be able to measure the short- and long-term progress of your goals over
time.
The most compelling goals push us out of our comfort zones and encourage us to grow. But
they also need to be realistic.
For example, it’s commendable if your goal is to increase ad revenue by 100%, but impossible
to accomplish if you don’t have the budget or time to dedicate to testing.
If your goal isn’t directly connected to the work you’re doing, it’s probably not a good goal.
And on a higher level, if it’s not aligned to your company’s mission statement, then it can be
hard to understand the meaningful impact of your work.
Your goal can be specific, measurable, attainable, and relevant — but it’s all trivial if your goal
isn’t time-bound.
Imagine you own a synthetic Christmas tree store, and your goal is to sell 325 trees to people
within a 50-mile radius of your shop. You have the necessary equipment and inventory to
accomplish the goal, it aligns with your company mission, and you can easily track your
success. The only problem is it’s the middle of summer, and very few people are shopping for
Christmas trees.
Specific
The team aims to enhance social media engagement for their software product.
Measurable
They want to measure success by increasing the average number of likes, comments, and shares on
their social media posts.
Attainable
Given the current social media following and the team's capacity to create engaging content, a 20%
increase in engagement over the next two months is considered achievable.
Relevant
Improving social media engagement aligns with the overall marketing strategy to increase brand
awareness and user interaction.
Time-bound
The goal is set for the next two months to allow for focused efforts and timely assessment of progress.
Specific
The organization aims to enhance the technical skills of its software development team.
Measurable
They plan to measure success by increasing the average proficiency level in a specific programming
language among team members.
Attainable
Given the availability of relevant training resources and the team's commitment to learning, a 15%
improvement in proficiency over the next six months is considered achievable.
Relevant
Enhancing technical skills is aligned with the company's goal of delivering higher-quality software
products and staying competitive in the industry.
Time-bound
The goal is set for the next six months to provide a timeframe for assessing the impact of the training
program.
Measurable
They plan to measure success by reducing the average response time to customer inquiries
submitted through various channels.
Attainable
Given the team's current workload and the implementation of a new ticketing system, a 20% reduction
in response time over the next three months is considered achievable.
Relevant
Enhancing customer support responsiveness is aligned with the company's commitment to providing
excellent customer service and improving customer satisfaction.
Time-bound
The goal is set for the next three months to allow for a focused effort and timely assessment of the
impact of process improvements.
1. KPIs
Definition
KPIs are specific, measurable indicators used to evaluate the success of an organization or a
particular activity in achieving strategic objectives.
Focus
KPIs are highly focused on the most critical aspects directly tied to organizational goals and
strategies.
Purpose
The primary purpose of KPIs is to assess and drive performance in alignment with organizational
goals.
KPIs provide a clear, quantifiable way to monitor progress, make informed decisions, and assess
the overall performance of a business.
Scope
KPIs are specific and targeted indicators that play a crucial role in guiding decision-making and
assessing overall performance.
Examples
Actionability
KPIs are directly tied to actionable goals and often used to guide strategic decisions.
2. Metrics
Definition
Metrics are quantifiable measures used to track and assess various aspects of business
performance or specific activities.
Focus
Metrics are broader than KPIs and can encompass a wide range of performance measures,
including operational, financial, or process-oriented metrics.
Purpose
Scope
Metrics include a diverse set of measures, such as operational, financial, and process-oriented
metrics, contributing to a holistic view of performance.
Examples
Total Revenue: A financial metric that measures the total income generated by a business.
Website Traffic: An operational metric that measures the number of visits to a website.
Actionability
Metrics provide data for analysis but may not always be directly actionable without interpretation.
3. Insights
Definition
Focus
Insights arise from the interpretation of metrics and KPIs, providing meaningful context and
actionable understanding.
Purpose
Insights help in making informed decisions, identifying trends, and understanding the root causes
behind certain performance outcomes.
Example
Understanding that a decline in customer satisfaction (KPI) is correlated with a recent change in
product features (Insight).
Actionability
Insight offers actionable understanding and informs decision-making based on the interpretation
of metrics and KPIs.
USEFUL TIPS
NOT ALL METRICS ARE KPIS, BUT ALL KPIS ARE METRICS
Certainly! Let's break down the statement "Not all metrics are KPIs, but all KPIs are metrics."
Specific KPIs
Conversion Rate
Measurable KPIs
Website Traffic
Achievable KPIs
Inventory Turnover
Definition: The number of times inventory is sold and replaced within a specific period.
Goal: Achieve an inventory turnover of 6 within the first six months.
Relevant KPIs
Time-bound KPIs
Definition: The time taken to launch new products on the e-commerce platform.
Goal: Launch at least 10 new products within the first quarter.
Metrics
Total Revenue
Definition: The percentage of visitors who navigate away from the site after viewing only one
page.
Definition: The count of new customers acquired through the e-commerce platform.
Inventory Levels
Insights
Insight 1
Observation: A spike in website traffic is observed after a successful social media advertising
campaign.
Action: Allocate more resources to successful advertising channels to drive traffic.
Insight 3
Observation: High customer satisfaction scores coincide with positive product reviews.
Action: Encourage customers to leave reviews and consider promoting products with positive
reviews.
Specific KPIs
Definition: The percentage of target users who have successfully adopted the new software.
Goal: Achieve a user adoption rate of 70% within the first three months.
Software Reliability:
Definition: The percentage of time the software performs without errors or crashes.
Goal: Maintain a software reliability rate of 95%.
Measurable KPIs
Definition: The total revenue expected from a customer throughout their relationship with the
company.
Goal: Increase CLV by 15% compared to the previous year.
Definition: The count of customer support tickets related to the new software.
Goal: Reduce the number of support tickets by 20% through product improvements.
Achievable KPIs
Relevant KPIs
Net Promoter Score (NPS)
Definition: Customer satisfaction and loyalty score based on the likelihood of recommending
the software.
Goal: Maintain an NPS score of 40 or above.
Definition: The increase in the company's market share within the software product category.
Goal: Achieve a 10% increase in market share within the first six months.
Time-bound KPIs
Definition: The time taken from product development to the official launch.
Goal: Launch the new software product within the specified timeline of six months.
Definition: The percentage of new customers who have completed the onboarding process.
Goal: Achieve an onboarding completion rate of 80% within the first month.
Metrics
Definition: The total number of times the software has been downloaded.
Definition: The percentage of customers who have discontinued using the software.
Definition: The average time users spend actively using the software.
Definition: The count of users actively engaging with the software within a given period.
Definition: The percentage of users who have adopted the latest software updates.
Definition: Scores provided by customers based on their experience with the software.
Definition: The cost incurred to acquire a new customer for the software.
Software Downtime
Definition: The total time the software is not available due to maintenance or unexpected
issues.
Insights
Insight 1
Observation: A decline in user adoption rate is observed after the latest software update.
Action: Investigate and address issues causing the decline, and communicate updates more
effectively.
Insight 2
Insight 3
Project Schedule Project Schedule Performance KPIs are metrics used to evaluate
how effectively a project is adhering to its planned schedule.
Performance KPIs
These KPIs provide insights into whether tasks and milestones are
being completed on time, ahead of schedule, or behind schedule,
allowing project managers to assess progress and make
informed decisions to keep the project on track.
Here are some common Schedule Performance KPIs along with their definitions, objectives, and potential
formulas:
Earned Value (EV) Earned Value (EV) is a measure of the value of work performed on a
project at a specific point in time. It represents the budgeted cost of
the work actually completed, expressed in monetary terms.
Formula
Where:
Objectives
It provides a quantitative measure of the progress achieved on a project compared to the planned
schedule and budget.
It helps project managers assess project performance, identify deviations from the plan, and make
informed decisions to keep the project on track.
Usage
EV is used to calculate various project performance metrics such as Cost Performance Index (CPI) and
Schedule Performance Index (SPI).
It helps project managers track progress and make informed decisions regarding resource allocation
and project adjustments.
Interpretation
Higher Earned Value (EV): Indicates that more work has been completed than planned, suggesting
favorable progress.
Lower Earned Value (EV): Suggests that less work has been completed than planned, indicating
potential delays or inefficiencies.
Planned Value (PV) Planned Value (PV), also known as Budgeted Cost of Work Scheduled
(BCWS), represents the authorized budget assigned to work
scheduled to be completed up to a specific point in time. It represents
the planned cost of the work scheduled to be accomplished.
Formula
Where:
Objectives
It establishes a baseline for measuring project performance against the planned schedule and
budget.
It helps project managers determine whether the project is progressing as planned and identify any
schedule deviations early on.
Usage
PV is used to compare the planned value of work against actual progress to evaluate project
performance.
It helps in forecasting project costs and scheduling future work activities.
Interpretation
Higher Planned Value (PV): Indicates that more work was planned to be completed by that time.
Lower Planned Value (PV): Suggests that less work was planned to be completed.
Formula
Where:
Objectives
Assess Schedule Performance: SV helps project managers assess how well the project is adhering to
the planned schedule. It provides insights into whether tasks are being completed on time or if there
are delays in the schedule.
Identify Schedule Deviations: By comparing the planned schedule with actual progress, SV helps
identify deviations from the schedule early on, allowing project managers to take corrective actions as
needed.
Support Decision-Making: SV provides valuable information for making informed decisions about
resource allocation, task prioritization, and schedule adjustments to keep the project on track.
Usage
SV is used to monitor schedule performance throughout the project lifecycle.
It helps project managers identify deviations from the planned schedule and take corrective actions
accordingly.
Interpretation
Schedule Variance (SV) > 1: Indicates that the project is ahead of schedule, meaning that the value of
work completed (EV) exceeds the planned value (PV). This suggests that tasks are being completed
faster than originally planned.
Schedule Variance (SV) < 1: Indicates that the project is behind schedule, meaning that the value of
work completed (EV) is less than the planned value (PV). This suggests that tasks are taking longer to
complete than originally planned.
Schedule Variance (SV) = 1: Indicates that the project is exactly on schedule, with the value of work
completed (EV) equal to the planned value (PV).
Formula
Where:
Objectives
Assess Schedule Efficiency: SPI helps project managers assess how efficiently the project is
progressing in terms of schedule performance. It provides insights into whether tasks are being
completed according to the planned schedule or if there are deviations.
Monitor Schedule Variance: By comparing the planned schedule with actual progress, SPI helps
monitor schedule variances and deviations early on, allowing project managers to take corrective
actions as needed.
Facilitate Performance Improvement: SPI provides valuable information for identifying areas where
schedule performance can be improved. It helps project managers make informed decisions about
resource allocation, task prioritization, and schedule adjustments.
Usage
SPI helps project managers assess how effectively resources are being utilized to achieve scheduled
tasks.
It provides insights into whether the project is ahead of or behind schedule based on the ratio of
earned value to planned value.
Interpretation
Schedule Performance Index (SPI) > 1: Indicates that the project is ahead of schedule, meaning that
the value of work completed (EV) exceeds the planned value (PV). This suggests that tasks are being
completed more efficiently and faster than originally planned.
Schedule Performance Index (SPI) = 1: Indicates that the project is exactly on schedule, with the value
of work completed (EV) equal to the planned value (PV).
Schedule Performance Index (SPI) < 1: Indicates that the project is behind schedule, meaning that the
value of work completed (EV) is less than the planned value (PV). This suggests that tasks are taking
longer to complete than originally planned.
Formula
Objectives
Usage
Project managers use this metric to monitor the project's progress in meeting key milestones within
the scheduled timeframe.
It helps in identifying potential delays or bottlenecks in milestone achievement and allows for timely
corrective actions to be taken.
Interpretation
Higher Percentage of Milestones Completed on Time: Indicates better schedule adherence, with a
larger proportion of milestones completed on time. This suggests that the project is progressing
according to the planned schedule, and critical milestones are being achieved within their scheduled
deadlines.
Lower Percentage of Milestones Completed on Time: Indicates poorer schedule adherence, with a
smaller proportion of milestones completed on time. This may indicate schedule deviations or delays
in milestone achievement, requiring further investigation and corrective actions to keep the project on
track.
7.4.6 SCHEDULE ADHERENCE
Formula
𝑺𝒄𝒉𝒆𝒅𝒖𝒍𝒆 𝑨𝒅𝒉𝒆𝒓𝒆𝒏𝒄𝒆
𝑨𝒄𝒕𝒖𝒂𝒍 𝑪𝒐𝒎𝒑𝒍𝒆𝒕𝒊𝒐𝒏 𝑻𝒊𝒎𝒆 − 𝑷𝒍𝒂𝒏𝒏𝒆𝒅 𝑪𝒐𝒎𝒑𝒍𝒆𝒕𝒊𝒐𝒏 𝑻𝒊𝒎𝒆
= × 𝟏𝟎𝟎
𝑷𝒍𝒂𝒏𝒏𝒆𝒅 𝑫𝒖𝒓𝒂𝒕𝒊𝒐𝒏
OR
Objectives
Assess Schedule Performance: Evaluate how well the project sticks to its planned schedule.
Monitor Schedule Variance: Track differences between actual progress and planned schedule.
Support Decision-Making: Provide data for informed decisions on resource allocation and task
prioritization.
Usage
Project managers use this metric to monitor and track project progress compared to the planned
schedule.
It helps in identifying schedule variations and allows project teams to take corrective actions to bring
the project back on track if deviations occur.
Interpretation
A Schedule Adherence = 100%: Indicates that the actual progress of the project is fully aligned with the
planned schedule, meaning that tasks, activities, and milestones are being completed exactly as
scheduled.
A Schedule Adherence > 100%: Suggests that the project is ahead of schedule, with actual progress
exceeding planned progress. This indicates efficient schedule performance and early completion of
tasks.
A Schedule Adherence < 100%: Indicates that the project is behind schedule, with actual progress
falling short of planned progress. This suggests delays in schedule execution and potential risks to
project timelines.
Where:
Objectives
Schedule Accuracy: Evaluate the accuracy of the initial project schedule by comparing it to the
number of adjustments made during execution.
Change Management: Monitor the frequency and extent of schedule changes to assess the
effectiveness of change management processes.
Risk Management: Identify potential risks and issues impacting the project schedule and take
proactive measures to mitigate them.
Resource Allocation: Determine if resources are being allocated effectively to meet project schedule
requirements.
Usage
Interpretation
Higher number of adjustments to the schedule: Indicate challenges in project planning, execution, or
coordination. It could suggest issues such as inaccurate initial scheduling, scope changes, resource
constraints, or external factors impacting project timelines.
Lower number of adjustments to the schedule: Indicate effective planning, proactive risk
management, and smooth project execution.
These KPIs provide insights into the financial health of the PMO,
including budget utilization, cost management, resource
allocation, and return on investment (ROI) for project initiatives.
Formula
Where:
Objectives
Usage
Cost savings are used as a performance metric to measure the effectiveness of cost-saving initiatives
or projects.
They inform decision-making processes related to resource allocation, investment prioritization, and
budget planning.
Cost savings analysis helps identify opportunities for process optimization, supplier negotiations, and
strategic sourcing.
They contribute to the overall financial health of the organization by reducing overheads, improving
margins, and maximizing return on investment.
Interpretation
Cost Savings > 1: Indicates that the implemented measures or actions have successfully reduced
expenses, resulting in improved financial performance.
Cost Savings < 1: Suggests that costs have increased instead of decreasing, indicating inefficiencies or
ineffective cost-saving efforts.
Cost Savings = 0: Indicates that there has been no net reduction in expenses or expenditures as a
result of the implemented measures or initiatives.
7.5.2 COST VARIANCE (CV)
Cost Variance (CV) Cost Variance (CV) is a project management metric that measures
the variance between the actual costs incurred for completing work
and the planned costs as per the budget.
Formula
Where:
Objectives
Assess Cost Performance: Evaluate whether the project is under or over budget.
Monitor Cost Control: Track deviations from the planned budget to identify cost-saving opportunities
or cost overruns.
Usage
Cost variance is a critical metric used by project managers and stakeholders to evaluate project
financial performance.
It helps in making informed decisions regarding resource allocation, budget adjustments, and project
prioritization.
By analyzing cost variance, organizations can identify trends, patterns, and areas of concern that may
require corrective action.
Interpretation
Cost Variance (CV) > 1: Indicates that the project is under budget, meaning that the actual costs are
less than planned.
Cost Variance (CV) < 1: Indicates that the project is over budget, suggesting that the actual costs
exceed the planned budget.
Cost Variance (CV) = 0: Indicates that the actual costs incurred for completing work are exactly equal
to the planned costs as per the budget. In other words, there is no variance between the planned and
actual costs.
Cost Performance Cost Performance Index (CPI) is a project management metric that
measures the efficiency of cost performance by comparing the value
Index (CPI)
of work completed (Earned Value) to the actual costs incurred (Actual
Cost).
Formula
𝑬𝒂𝒓𝒏𝒆𝒅 𝑽𝒂𝒍𝒖𝒆 (𝑬𝑽)
𝑪𝒐𝒔𝒕 𝑷𝒆𝒓𝒇𝒐𝒓𝒎𝒂𝒏𝒄𝒆 𝑰𝒏𝒅𝒆𝒙 (𝑪𝑷𝑰) =
𝑨𝒄𝒕𝒖𝒂𝒍 𝑪𝒐𝒔𝒕 (𝑨𝑪)
Where:
Objectives
Evaluate Cost Efficiency: Assess how efficiently the project is utilizing resources to achieve the planned
work.
Forecast Final Costs: Provide insights into expected final costs based on current cost performance.
Usage
Cost Performance Index is a critical metric used by project managers and stakeholders to evaluate
the efficiency of cost utilization in a project.
It helps in making informed decisions regarding resource allocation, budget adjustments, and project
prioritization.
By analyzing CPI, organizations can identify trends, patterns, and areas of concern that may require
corrective action to improve cost efficiency.
Interpretation
Cost Performance Index (CPI) > 1: Indicates that the project is under budget, meaning that the value of
work completed exceeds the actual costs incurred.
Cost Performance Index (CPI) < 1: Indicates that the project is over budget, suggesting that the actual
costs exceed the value of work completed.
Cost Performance Index (CPI) = 0: Indicates that the value of work completed is zero or negligible
compared to the actual costs incurred.
Budget Variance (BV) Budget Variance (BV) is a financial metric used in project
management to measure the variance between the actual project
expenses and the budgeted amount. It indicates whether the project
is under or over budget based on the actual costs incurred.
Formula
Where:
Objectives
Evaluate the financial performance of the project against the budget.
Identify areas of overspending or cost savings.
Assess the effectiveness of budget management practices.
Usage
Budget Variance (BV) is widely used in project management and financial analysis to assess the
financial performance of a project or initiative.
It helps project managers and stakeholders monitor and control project expenses by comparing
actual costs to the budgeted amount.
BV provides valuable insights into cost management practices, enabling corrective actions to be
taken if actual costs deviate from the budget.
BV is utilized to evaluate the efficiency and effectiveness of resource allocation, identify areas of
overspending or cost savings, and optimize budget utilization.
Interpretation
Budget Variance (BV) > 0: Indicates that the actual costs exceed the budgeted amount, suggesting
overspending.
Budget Variance (BV) < 0: Indicates that the actual costs are less than the budgeted amount,
indicating cost savings or under budget.
Budget Variance (BV) = 0: Indicates that the actual costs are exactly equal to the budgeted amount,
implying that the project is on budget.
Benefit Cost Ratio Benefit Cost Ratio (BCR) is a financial metric used to evaluate the
economic feasibility of a project by comparing the present value of its
(BCR)
benefits to the present value of its costs. It measures the efficiency
and profitability of an investment by determining whether the benefits
outweigh the costs.
Formula
Where:
Objectives
BCR is commonly used in cost-benefit analysis to evaluate the financial feasibility of projects and
investments.
It helps stakeholders, investors, and decision-makers prioritize projects based on their potential
economic returns.
BCR assists in comparing alternative investment options and selecting the most cost-effective and
beneficial projects for implementation.
Interpretation
Benefit Cost Ratio (BCR) > 1: Indicates that the present value of benefits exceeds the present value of
costs, suggesting that the project generates positive net benefits. A BCR greater than 1 indicates that
the project is economically viable and potentially profitable.
Benefit Cost Ratio (BCR) < 1: Indicates that the present value of costs exceeds the present value of
benefits, suggesting that the project generates negative net benefits. A BCR less than 1 indicates that
the project is not economically viable and may result in a net loss.
Benefit Cost Ratio (BCR) = 1: Indicates that the present value of benefits is equal to the present value
of costs, suggesting that the project breaks even. In this case, the project neither generates a profit nor
incurs a loss.
Actual Benefits Actual Benefits Realized refer to the tangible or measurable outcomes
that have been achieved as a result of implementing a project,
Realized
initiative, or strategy. These benefits represent the actual value
delivered to the organization or stakeholders.
Formula
Financial savings
Increased revenue
Improved profitability
Increased productivity
Reduced cycle times
Improved efficiency
Increased output
Improved customer satisfaction
Increased customer loyalty
Reduced complaints
Higher customer ratings
Enhanced employee engagement
Increased employee morale
Reduced turnover
Improved job satisfaction
Improved risk management
Reduced operational risks
Enhanced compliance
Improved safety
Objectives
Measure the tangible impact of projects or initiatives on the organization's goals and objectives.
Assess the effectiveness of project management practices and strategies in delivering intended
outcomes.
Provide stakeholders with evidence of the value generated by investments in projects or initiatives.
Usage
Used by project managers and stakeholders to evaluate the success of projects or initiatives.
Provides insights into the contribution of individual projects or initiatives to organizational
performance.
Helps in decision-making processes related to resource allocation, project prioritization, and future
investments.
Interpretation
Higher Actual Benefits Realized: Indicate successful project implementation and alignment with
organizational objectives.
Lower Actual Benefits Realized: Suggests inefficiencies, challenges, or discrepancies between planned
and actual outcomes.
Expected Benefits Expected benefits refer to the anticipated or projected outcomes that
are forecasted to be achieved as a result of implementing a project,
initiative, or strategy. These benefits represent the intended value or
impact that the project aims to deliver.
Formula
Objectives
Define the desired outcomes or objectives that the project or initiative intends to achieve.
Provide a basis for assessing the feasibility and viability of the project.
Serve as benchmarks for measuring the success or performance of the project.
Usage
Used during project planning and initiation stages to establish project goals and objectives.
Provides a framework for identifying and prioritizing project deliverables and outcomes.
Helps in evaluating project performance and assessing the alignment with organizational objectives.
Interpretation
Expected benefits represent the anticipated value or impact that the project is expected to deliver.
Act as targets or benchmarks against which the actual outcomes can be compared.
Variance between expected and actual benefits can provide insights into project performance,
effectiveness, and success.
Benefits Realization The Benefits Realization Rate (BRR) is a key performance indicator
(KPI) used to measure the efficiency and effectiveness of an
Rate (BRR)
organization's ability to achieve the intended benefits from its projects
or initiatives. It reflects the percentage of expected benefits that have
been realized or achieved compared to the total expected benefits.
Formula
Where:
Objectives
Assess the extent to which anticipated benefits from projects or initiatives are being realized.
Evaluate the effectiveness of project management and implementation in delivering intended
outcomes.
Provide insights into the organization's capability to achieve strategic objectives and deliver value.
Facilitate decision-making regarding resource allocation, project prioritization, and investment
optimization.
Usage
BRR is used by project managers, executives, and stakeholders to monitor and evaluate the
performance of projects or initiatives.
It helps in identifying gaps between expected and actual benefits and enables proactive measures to
enhance benefits realization.
BRR assists in prioritizing projects based on their potential to deliver value and align with organizational
objectives.
It supports continuous improvement efforts by identifying areas for process optimization and
performance enhancement.
Interpretation
Benefits Realization Rate (BRR) > 100%: Indicates that actual benefits realized exceed expected
benefits, suggesting that the project or initiative has overachieved its objectives.
Benefits Realization Rate (BRR) = 100%: Indicates that actual benefits realized are in line with expected
benefits, indicating successful delivery of project outcomes.
Benefits Realization Rate (BRR) < 100%: Indicates that actual benefits realized are lower than expected
benefits, highlighting potential challenges or shortcomings in project implementation.
Return on Investment Return on Investment (ROI) measures the financial benefits generated
by the PMO's activities and initiatives compared to the costs incurred
(ROI)
in establishing and operating the PMO. It assesses the efficiency and
effectiveness of the PMO in delivering value to the organization.
Formula
Where:
Objectives
Usage
Used by senior management and stakeholders to justify the existence of the PMO and its ongoing
funding.
Helps in decision-making related to resource allocation, budgeting, and prioritization of PMO initiatives.
Provides a basis for continuous improvement and optimization of PMO processes and activities.
Interpretation
Return on Investment (ROI) > 0: Indicates that the financial benefits generated by the PMO exceed the
costs incurred, indicating a profitable investment.
Return on Investment (ROI) < 0: Suggests that the costs outweigh the financial benefits, indicating a
need for reassessment or optimization of PMO activities.
Return on Investment (ROI) = 0: Signifies that the financial benefits generated by an investment are
exactly equal to the costs incurred. In other words, the organization neither gains nor loses financially
from the investment. This scenario is often referred to as "breaking even."
7.5.10 TOTAL FINANCIAL BENEFITS
Total Financial Total Financial Benefits represent the cumulative financial gains or
savings generated by an investment, project, or initiative. It
Benefits
encompasses all quantifiable positive financial outcomes resulting
from the endeavor.
Formula
Where:
Objectives
Quantify the overall financial gains achieved from the investment or initiative.
Provide a comprehensive view of the financial impact of the project or initiative.
Assist in assessing the profitability and value generated by the endeavor.
Usage
Used in financial analysis and investment evaluation to assess the economic viability of projects or
initiatives.
Helps in decision-making by comparing the total financial benefits against the costs incurred.
Provides stakeholders with a clear understanding of the financial value delivered by the investment.
Interpretation
Higher Total Financial Benefits: Indicates greater financial success and effectiveness of the
investment.
Lower Total Financial Benefits: Indicates that the project is generating less value or cost savings
compared to the initial investment or project costs. It suggests that the project may not be as
financially lucrative or profitable as anticipated, potentially leading to concerns about its overall
viability and return on investment.
Net Financial Benefits Net Financial Benefits represent the total financial gains or savings
achieved from an investment or initiative after accounting for all
associated costs. It provides a measure of the financial impact or
profitability resulting from the investment.
Formula
Objectives
Usage
Used in financial analysis and investment appraisal to evaluate the viability and performance of
projects or initiatives.
Helps in decision-making by comparing the expected financial benefits against the costs incurred.
Provides a basis for assessing the return on investment (ROI) and determining the overall value
delivered by the investment.
Interpretation
Net Financial Benefits > 0: Indicates that the financial benefits exceed the costs, resulting in a net profit
or financial gain.
Net Financial Benefits < 0: Suggests that the costs outweigh the financial benefits, resulting in a net
loss or financial deficit.
Net Financial Benefits = 0: Indicates that the total financial gains or savings from an investment,
project, or initiative exactly offset the total costs incurred. In other words, the financial benefits neither
exceed nor fall short of covering the costs, resulting in a neutral financial outcome. This scenario is
often referred to as "breaking even."
Formula
Where:
Actual Work Hours: The total number of hours that resources have
spent on productive work during the specified period.
Available Work Hours: The total number of hours that resources
were available to work during the specified period.
Objectives
Usage
Interpretation
Higher Resource Utilization Rate: Indicates efficient resource utilization, maximizing productivity and
minimizing idle time.
Lower Resource Utilization Rate: Suggests underutilization of resources, which may indicate
inefficiencies or capacity constraints.
Formula
Where:
Objectives
Usage
Compare planned resource allocation against actual resource utilization on a regular basis.
Analyze deviations to identify reasons for discrepancies and take corrective actions as needed.
Use historical data to refine resource allocation processes and improve accuracy in future projects.
Interpretation
Higher Resource Allocation Accuracy: Indicates that resources are allocated effectively and
efficiently, leading to successful project outcomes within budget and schedule.
Lower Resource Allocation Accuracy: Suggests discrepancies between planned and actual resource
utilization, which may result in delays, cost overruns, or resource shortages.
Resource Cost Resource Cost Variance measures the variance between the planned
cost of resource utilization and the actual cost incurred for utilizing
Variance
resources in project execution. It indicates whether the actual
resource costs are higher or lower than planned, helping to assess
cost performance and budget adherence.
Formula
Where:
Objectives
Usage
Interpretation
Resource Cost Accuracy > 0: Indicates that actual resource costs are lower than planned, which is
favorable as it contributes to cost savings.
Resource Cost Accuracy < 0: Indicates that actual resource costs are higher than planned, indicating
cost overruns and potential budgetary issues.
Resource Cost Accuracy = 0: Indicates that the actual cost of resource utilization matches exactly with
the planned or budgeted cost. In other words, there is no variance between the planned and actual
resource costs. This situation suggests that resource utilization is precisely aligned with the budgeted
expectations, neither exceeding nor falling short of the planned costs.
Resource Turnover Resource Turnover Rate measures the frequency at which resources
are utilized and replaced within a given period. It indicates how
Rate
efficiently resources are utilized and replenished in project execution,
helping to assess resource management effectiveness.
Formula
Where:
Objectives
Evaluate resource utilization efficiency by assessing how frequently resources are utilized and
replaced.
Identify opportunities to optimize resource turnover processes and minimize resource idle time.
Ensure adequate resource availability and timely replenishment to support project execution without
disruptions.
Usage
Monitor resource turnover rates periodically to identify trends and patterns in resource utilization.
Analyze factors contributing to high or low resource turnover rates and take corrective actions
accordingly.
Use resource turnover data to optimize resource planning, allocation, and procurement strategies.
Interpretation
Higher Resource Turnover Rate: Indicates frequent resource utilization and replacement, suggesting
efficient resource management and utilization.
Lower Resource Turnover Rate: Suggests infrequent resource utilization and replacement, which may
indicate underutilization of resources or inefficient resource management practices.
Total Skill Gap The Total Skill Gap represents the cumulative difference between the
skills required for project tasks and the skills possessed by available
resources. It quantifies the overall extent of skill deficiencies within the
resource pool and serves as a measure of the overall skill
misalignment in a project or organization.
Formula
Where:
Objectives
Assess the overall level of skill misalignment between project requirements and available resources.
Identify the specific skill areas where resource deficiencies are most pronounced.
Inform resource allocation decisions and skill development initiatives to address identified gaps and
improve project outcomes.
Usage
Calculate the Total Skill Gap regularly to monitor changes in skill misalignment over time and track the
effectiveness of interventions aimed at addressing skill deficiencies.
Use the Total Skill Gap analysis to prioritize resource allocation and skill development efforts, ensuring
that projects have access to the necessary skills for successful execution.
Collaborate with HR departments and training providers to design targeted skill development
programs tailored to address identified gaps.
Interpretation
Higher Total Skill Gap: Indicates a greater misalignment between project requirements and available
resources, suggesting a higher risk of project delays, errors, or suboptimal outcomes.
Lower Total Skill Gap: Signifies a better match between required skills and available resources,
indicating a higher likelihood of project success and efficient resource utilization.
Resource Skills Gap The Resource Skills Gap Index measures the disparity between
required skills for project tasks and the skills possessed by available
Index
resources. It quantifies the extent to which resources lack the
necessary skills to fulfill project requirements, helping organizations
identify skill deficiencies and plan for skill development or resource
allocation accordingly.
Formula
Where:
Total Skill Gap: The cumulative gap between the required skills for
all project tasks and the skills possessed by available resources.
Total Required Skills: The total number of skills required across all
project tasks.
Objectives
Assess the alignment between the skills of available resources and the skills required for project tasks.
Identify skill gaps within the resource pool to prioritize skill development or resource allocation efforts.
Ensure that projects have access to resources with the necessary skills to effectively execute tasks and
deliver quality outcomes.
Usage
Calculate the Resource Skills Gap Index regularly to monitor changes in skill misalignment over time.
Analyze the specific skill gaps identified by the index to tailor training programs or recruitment
strategies to address deficiencies.
Use the index to make informed decisions about resource allocation, project staffing, and skill
development initiatives.
Interpretation
Higher Resource Skills Gap Index: Indicates a larger disparity between required skills and available
resources, suggesting a greater need for skill development or resource augmentation.
Lower Resource Skills Gap Index: Indicates a smaller skill gap, indicating a better alignment between
resource skills and project requirements.
Actual Resource Actual Resource Usage refers to the quantity or amount of resources
that are actively engaged or utilized in performing project tasks within
Usage
a specific period. It represents the actual consumption of resources
during project execution, including labor hours, materials, equipment
usage, or any other resources allocated to project activities.
Formula
Where:
Total Resources Consumed: The total amount of resources used
in the production process.
Total Units Produced: The total number of units produced during
the production process.
Objectives
Usage
Track actual resource usage regularly throughout the project lifecycle to monitor resource
performance and adherence to project plans.
Compare actual resource usage against planned or budgeted amounts to assess resource efficiency
and identify any variances.
Use actual resource usage data to make informed decisions about resource allocation, staffing levels,
or project scheduling adjustments.
Analyze trends in actual resource usage to forecast future resource needs and optimize resource
planning and allocation for upcoming project phases.
Interpretation
Higher Actual Resource Usage: Indicates efficient resource utilization and alignment with project
requirements.
Lower Actual Resource Usage: Suggests potential resource underutilization or inefficiencies that
require investigation and corrective action.
Total Resource Total Resource Capacity refers to the maximum amount or quantity of
resources available for allocation to project tasks within a given
Capacity
period. It represents the total pool of resources that an organization or
project team has at its disposal to execute projects effectively.
Formula
Where:
Objectives
Determine the overall resource availability and capacity of the organization or project team.
Ensure that there are sufficient resources available to meet project demands and timelines.
Identify potential resource shortages or constraints early in the project planning process.
Facilitate effective resource allocation and planning to optimize resource utilization and support
project success.
Usage
Estimate total resource capacity based on factors such as resource availability, skills, qualifications,
and any constraints or limitations.
Regularly review and update total resource capacity estimates to account for changes in resource
availability or project requirements.
Use total resource capacity data to inform resource allocation decisions, project staffing plans, and
overall project scheduling.
Compare total resource capacity against project resource demands to identify any gaps or
mismatches and take proactive measures to address resource shortages or constraints.
Interpretation
Higher Total Resource Capacity: Indicates that the organization or project team has sufficient
resources available to meet project needs and deliverables.
Lower Total Resource Capacity: Indicates that the organization may face constraints in meeting
production targets. This may lead to resource shortages, bottlenecks, or delays in project execution.
Resource Capacity Resource Capacity Utilization measures the extent to which available
resources are being utilized or engaged in project activities compared
Utilization
to their total capacity. It indicates the efficiency of resource allocation
and utilization within a project or organization.
Formula
Where:
Objectives
Usage
Calculate Resource Capacity Utilization regularly to monitor resource utilization trends and identify
potential capacity constraints or inefficiencies.
Use Resource Capacity Utilization metrics to adjust resource allocation strategies, redistribute
workloads, or allocate additional resources as needed to maintain optimal resource utilization levels.
Analyze Resource Capacity Utilization in conjunction with other resource management KPIs to gain
insights into overall resource performance and make informed resource management decisions.
Interpretation
Higher Resource Capacity Utilization: Indicates that resources are being efficiently utilized, with a
greater proportion of their capacity allocated to project tasks.
Lower Resource Capacity Utilization: Suggests that resources may be underutilized, leading to
potential inefficiencies or resource wastage.
Formula
𝑫𝒆𝒍𝒊𝒗𝒆𝒓𝒂𝒃𝒍𝒆𝒔 𝑷𝒓𝒐𝒅𝒖𝒄𝒆𝒅
𝑹𝒆𝒔𝒐𝒖𝒓𝒄𝒆 𝑷𝒓𝒐𝒅𝒖𝒄𝒕𝒊𝒗𝒊𝒕𝒚 =
𝑹𝒆𝒔𝒐𝒖𝒓𝒄𝒆𝒔 𝑪𝒐𝒏𝒔𝒖𝒎𝒆𝒅
Where:
Objectives
Evaluate the efficiency of resource utilization in achieving project goals and objectives.
Identify opportunities to improve resource allocation and utilization to enhance project performance.
Optimize resource productivity to maximize project outcomes while minimizing resource waste or
inefficiencies.
Provide insights into the effectiveness of resource management practices and inform decision-
making for resource allocation and planning.
Usage
Define relevant project outputs or deliverables that represent the desired outcomes of resource
utilization.
Determine the appropriate metrics or units of measurement for both resource consumption and
project outputs.
Calculate Resource Productivity by dividing the total project outputs by the total resources expended
during the specified period.
Monitor Resource Productivity over time to identify trends, patterns, or areas for improvement in
resource utilization.
Use Resource Productivity analysis to guide resource allocation decisions, resource planning
strategies, and performance improvement initiatives.
Interpretation
Higher Resource Productivity: Indicates that resources are being effectively utilized to produce
desired project outcomes, resulting in greater efficiency and value generation.
Lower Resource Productivity: Suggests that there may be inefficiencies or suboptimal utilization of
resources, requiring further analysis and corrective actions.
Formula
Where:
Objectives
Assess the effectiveness of organizational strategies and initiatives aimed at retaining valuable
resources.
Monitor changes in resource retention rates over time to identify trends, patterns, or potential issues
related to workforce stability.
Determine the impact of turnover, attrition, or talent loss on organizational performance and
productivity.
Inform human resource management decisions and interventions to improve retention efforts and
mitigate talent-related risks.
Usage
Define the scope of resources to be included in the calculation, such as employees, key talents, or
specialized skills.
Determine the timeframe for measuring resource retention, such as quarterly, annually, or over
specific project phases.
Collect data on the total number of resources at the beginning of the period and the number of
retained resources at the end of the period.
Calculate the Resource Retention Rate using the formula provided, and express the result as a
percentage.
Analyze Resource Retention Rate trends and variations to identify factors influencing retention and
areas for improvement.
Interpretation
Higher Resource Retention Rate: Indicates that the organization effectively retains its valuable
resources, which can contribute to stability, continuity, and organizational success.
Lower Resource Retention Rate: may signal challenges in retaining talent or maintaining workforce
stability, necessitating proactive measures to address retention issues.
Resource Cost Resource Cost Variance (RCV) measures the variance between the
actual costs incurred for utilizing resources and the budgeted or
Variance (RCV)
planned costs for those resources. It indicates whether resource-
related expenses are over or under budget, providing insights into
cost performance and potential budget deviations.
Formula
Where:
Objectives
Usage
Gather data on actual resource costs incurred during the relevant period, including expenses such as
salaries, procurement costs, overheads, and other resource-related expenditures.
Refer to the planned or budgeted costs for utilizing resources, which are typically defined in project
budgets, resource allocation plans, or financial forecasts.
Calculate the Resource Cost Variance by subtracting the planned or budgeted costs from the actual
costs.
Analyze the magnitude and direction of the variance to determine whether resource costs are over or
under budget.
Investigate the factors contributing to significant variances and take corrective actions as necessary
to align resource costs with budgeted expectations.
Interpretation
Resource Cost Variance (RCV) > 0: Indicates that actual resource costs are higher than planned or
budgeted, suggesting cost overruns or unexpected expenses.
Resource Cost Variance (RCV) < 0: Signifies that actual resource costs are lower than planned or
budgeted, indicating cost savings or efficient resource utilization.
Resource Cost Variance (RCV) = 0: Means that the actual costs incurred for utilizing resources are
exactly in line with the planned or budgeted costs. In other words, there is no variance between the
actual expenses and the budgeted expenses for resource utilization.
Project Health KPIs Project Health KPIs are metrics used to assess and monitor the
overall well-being and success of a project. These KPIs provide
insights into various aspects of the project's performance,
allowing stakeholders to evaluate its progress, identify areas of
concern, and make informed decisions.
They help ensure that the project stays on track, meets its
objectives, and delivers value to stakeholders.
Project Health Index Project Health Index is a quantitative measure used to assess the
overall health and performance of a project.
(PHI)
It is a composite metric that takes into account a variety of
project factors, including scope, schedule, budget, quality, and
risk.
It provides stakeholders with a single numerical value that reflects
the project's status, progress, and potential risks.
Formula
Objectives
Provide a consolidated measure of the project's status, progress, and potential risks.
Enable stakeholders to quickly assess project health, identify areas of concern, and prioritize actions.
Usage
Used by project managers, sponsors, and stakeholders to monitor progress and make informed
decisions.
Helps communicate project status and performance effectively to stakeholders.
Interpretation
Higher Project Health Index: Indicates healthier and more successful projects with fewer risks.
Lower Project Health Index: Suggests potential challenges or areas requiring attention and
intervention.
Example
A project manager is using the PHI to assess the health of a project. The project manager assigns the
following weighting factors to the different factors:
Scope: 0.25
Schedule: 0.25
Budget: 0.25
Quality: 0.15
Risk: 0.10
The project manager then collects data on the project's performance in each of these areas. The data is
as follows:
The project manager then calculates the PHI using the following formula:
PHI = (0.25 * 0.80) + (0.25 * 0.75) + (0.25 * 0.90) + (0.15 * 0.85) + (0.10 * 0.10) = 0.82
The PHI of 0.82 indicates that the project is healthy but there are some areas that need improvement, such
as schedule and risk.
Formula
Where:
Objectives
Identify and prioritize risks based on their potential impact on project objectives or organizational
goals.
Quantify the financial, operational, or reputational implications of different risk scenarios.
Support decision-making by providing stakeholders with information to allocate resources, implement
mitigation strategies, and manage uncertainties effectively.
Usage
Interpretation
Higher Risk Exposure: Indicates a greater likelihood of adverse outcomes or losses if risk events occur.
Lower Risk Exposure: Suggests a reduced potential impact of identified risks on project or
organizational objectives.
Project and Portfolio Project and Portfolio Performance KPIs used to evaluate the
effectiveness and efficiency of project management processes
Performance KPIs and the overall success of project portfolios.
By tracking these KPIs, PMOs can ensure that projects are aligned
with organizational goals, resources are effectively utilized, risks
are managed proactively, and project stakeholders are satisfied
with project outcomes.
Number of Completed The number of completed projects represents the sum of all projects
that have reached their conclusion, regardless of their outcome or
Projects
timeliness.
Formula
Where:
Number of projects completed on time: The count of projects that
were successfully concluded within their scheduled timeframe
without any delays.
Number of projects completed with delays: The count of projects
that experienced delays but were eventually completed.
Objectives
Provide a comprehensive view of project completion across all initiatives within a defined timeframe.
Assess the volume and scale of project activity undertaken by an organization.
Serve as a basis for calculating various project performance metrics and KPIs.
Usage
Interpretation
Higher Number of Completed Projects: Indicates a larger volume of project activity and completion,
suggesting a robust project portfolio and potentially higher organizational productivity.
Lower Number of Completed Projects: Signifies challenges in project execution or a reduction in
project activity, requiring further investigation to understand underlying causes.
Number of On-Time The number of on-time completed projects represents the cumulative
count of all projects that have been successfully finished within their
Completed Projects
scheduled timeframe, meeting or exceeding the planned completion
date.
Formula
Where:
Objectives
Usage
Interpretation
Higher Number of On-Time Completed Projects: Indicates a higher percentage of projects completed
on time, reflecting efficient project management practices.
Lower Number of On-Time Completed Projects: Suggests challenges in meeting project deadlines
and may require corrective actions to improve schedule performance.
Number of Off-Time The number of off-time completed projects refers to the count of
projects that finished beyond their planned completion date.
Completed Projects
Formula
Where:
Objectives
Usage
Interpretation
Formula
Where:
Objectives
Usage
Interpretation
Number of Projects The number of projects completed within budget refers to the total
count of projects that have been successfully executed while
Completed within
adhering to the allocated budgetary constraints.
Budget
Formula
Objectives
Measure Budget Adherence: This KPI helps in assessing the organization's ability to manage project
finances effectively.
Evaluate Cost Control: It provides insights into the efficiency of cost management practices within the
organization.
Assess Project Management Performance: Achieving project goals within budget is a key indicator of
effective project management.
Monitor Financial Health: The number of projects completed within budget reflects positively on the
financial health and stability of the organization.
Usage
Performance Evaluation: Used to evaluate the performance of project managers and teams in
managing project budgets.
Decision Making: Helps stakeholders make informed decisions regarding resource allocation and
project prioritization.
Benchmarking: Enables benchmarking against industry standards and best practices in budget
management.
Continuous Improvement: Identifies areas for improvement in budget estimation, cost forecasting,
and expenditure control.
Interpretation
Higher Number of Projects Completed within Budget: Indicates strong financial management
practices, effective project planning, and efficient utilization of resources.
Lower Number of Projects Completed within Budget: Signals issues such as budget overruns,
inaccurate cost estimation, or inefficient resource allocation that require corrective action.
Number of Successful The number of successful projects represents the count of projects
that have been completed within their defined scope, budget, and
Projects
schedule, meeting all predetermined objectives and delivering the
expected outcomes or benefits.
Formula
Where:
Number of Completed Projects: The total number of projects that
have been completed, regardless of their success status.
Number of Failed Projects: The total number of projects that did
not meet their predefined goals and objectives.
Objectives
Usage
Evaluating project success rates over different time periods or across various project types.
Identifying areas of strength and weakness in project management processes.
Benchmarking performance against industry standards or organizational targets.
Interpretation
Higher Number of Successful Projects: Indicates a greater proportion of projects achieving their
intended goals and delivering value to the organization.
Lower Number of Successful Projects: Suggests inefficiencies or challenges in project execution,
requiring corrective actions to improve success rates.
Project Success Rate The project success rate measures the percentage of completed
projects that meet predefined success criteria.
Formula
Where:
Objectives
Usage
Interpretation
Higher Project Success Rate: Indicates better project management practices and alignment with
organizational goals.
Lower Project Success Rate: Suggests areas for improvement in project planning, execution, or
stakeholder management.
Project Cycle Time The project cycle time measures the total duration it takes to
complete a project from initiation to closure.
Formula
Where:
Project End Date: The date when the project is officially completed
or closed.
Project Start Date: The date when the project is initiated or
officially begins.
Objectives
Usage
Interpretation
Shorter Project Cycle Time: Indicates faster project delivery and increased efficiency.
Longer Project Cycle Time: Signifies delays, inefficiencies, or complexities in project execution.