What are KPI's?

The Need for KPIs


KPIs provide a window not only into the current status of the project or its past performance, but also serve as a means to detect future problems

This ability to spot a potential problem manifesting (eg. schedule slippage) will allow the project manager and team to address the situation ahead of time and take steps to mitigate it accordingly

Different KPIs can yield different insights into the project as a whole, allowing for several views for the project manager and team


Anatomy of a KPI


KEY = A major contributor to the success or failure of the project; a KPI is therefore ONLY a key when it can either make or break the project


PERFORMANCE = In essence, a metric that can be measured, quantified, adjusted, and controlled; note that the metric MUST be controllable to improve performance

INDICATOR = An easy to read and interpret representation of present and future performance


KPI Types

  • Quantitative Indicators: A measure that can be presented numerically

  • Qualitative Indicators: Cannot be measured numerically

  • Leading Indicators: Forward looking measures that help predict future outcomes

  • Lagging Indicators: Provide a post hoc mechanism

  • Input Indicators: Measure the usage of resources used during project execution

  • Process Indicators: Used to measure overall efficiency

  • Output Indicators: Used to demonstrate the outcome or results of the process activities

  • Practical Indicators: Interfaces to existing company processes

  • Directional Indicators: Demonstrating whether organization or project is improving or not

  • Actionable Indicators: Those which are in control of the organization

  • Financial Indicators: Monetary measures


(Source: Wikipedia: http://en.wikipedia.org/wiki/Key_performance_indicators)


KPI Project Management Examples

There are numerous KPI types that exist within the project management space; a few key examples would be the following:

  1. Estimate to project completion

  2. Number of unresolved issues

  3. Current resource allocation

  4. Labor costs spent (per month)

  5. Current development backlog

  6. Project schedule (Agile or Waterfall)

  7. Issues found in review process

  8. Issues found by QA

  9. Issues found by customers

  10. No. of on-time deliveries



KPI Selection Process

A key aspect of picking the right KPIs is to ensure you are choosing the specific ones that are actually most pertinent to establishing project success

Creating a KPIs ‘library’ is quite straightforward; however, ensuring you only select the relevant KPIs is a little more challenging

Too many KPIs will lead to confusion and could start sending false positives to the project stakeholders, sponsor and team members; additionally, overloading the usage of KPIs will eventually lead to the situation of ‘noise’, whereby so many factors are monitored that it becomes a blur

KPI Problems and Issues

There can be several reasons why a KPI may end up being either insufficient or downright detrimental when being used in a project. Listed below are several of the key ways that may cause failure of the KPI to yield what it was meant to provide:

  • The KPI is not related or relevant to the work being performed

  • The rate of change in the KPI is too slow to produce a result that is actionable

  • Turnaround time for actions needed to correct low performing KPIs takes too long

  • The responses necessary or the processes needed to deal with KPIs indicating a problem either do not exist or are woefully inadequate

  • The KPIs are only loosely monitored by front line managers as opposed to being shared with the team as a whole

  • Too many KPIs put in place leading to confusion and ‘noise.

Using and Understanding KPIs

Picking and choosing the right KPIs to display is not always a straightforward task and in most cases will require a little trial and error.

Knowing how to interpret the KPIs and ensure that actionable measures can be taken must be adequately understood up front so as to have a means of mitigation if problems or changes to the project occur


Displaying KPIs Effectively

In order to properly convey KPI and pertinent project information, leverage a dashboarding mechanism that showcases key pieces of data in easy to read tiles.

Each tile ‘widget’ should be properly spaced and aligned with others in the display

Try to group similar KPIs into functional areas and separate them into different dashboards if too many KPIs result in clutter within a singular view