15 essential KPIs in Project Management

For successful project managers, KPIs (Key Performance Indicators) are invaluable tools that provide insights into your project's overall performance, enabling you to ensure positive progress through better, data-driven decisions. Ultimately, KPIs help project managers assess whether the project is on track to meet its objectives.

Why are KPIs important for Project Managers?

They help you measure progress: KPIs provide a clear picture of how well a project is advancing according to its goals.
Setting Objectives: KPIs allow you to define project objectives and ensure they align with the broader organisational strategy.
Better Decision Making: KPIs facilitate more informed decisions based on accurate data, reducing reliance on intuition or assumption when making the big calls.
Accountability: KPIs allow Project Managers to assign responsibility and accountability to the right team members and provide support to those who need it most.

KPIs for Project Management can vary by industry, and there is no one-size-fits-all KPI solution for every project manager.

For example, PMs working in healthcare may see patient satisfaction and treatment outcomes as necessary KPIs. At the same time, paid-for software project managers are more likely to value churn rates or monthly recurring revenue figures.

Using SMART goals in Project Management

To make KPIs helpful to the overall project, they should follow the SMART criteria. This means they should be Specific, Measurable, Achievable, Relevant, and Time-bound. SMART KPIs provide clarity and ensure everyone understands what needs to be achieved, when it must be done, and why the work matters to the bigger picture.

Examples of KPIs for Project Managers

Selecting the right KPIs can be challenging. It requires a thorough understanding of your project's objectives and the metrics that truly matter. It's essential to choose KPIs that align with your project's goals and the overall business strategy.

Here are some KPIs commonly used in Project Management:

Project Timeline Adherence: Deadlines are a fact of life, and no Project Manager wants to run behind schedule.
Budget Variance: Tracking the variance between the planned budget and the actual expenditure is essential to ensure the efficiency (and indeed completion) of the project.
Scope Changes: It is important to carefully monitor the number and impact of changes to the project's scope throughout its lifespan.
Resource Utilisation: By evaluating how efficiently your team is using its project resources, you can improve productivity, cut waste, and create better results.
Stakeholder Satisfaction / Customer Feedback: Gathering feedback from stakeholders and customers to gauge their satisfaction with the project and its product, can provide essential insight into the quality of the work being done, and its potential future performance.
Risk Management: Unforeseen risks can derail projects. Evaluating the effectiveness of your risk identification, mitigation, and response strategies, can help avoid such issues.
Team Productivity: Measuring the productivity and efficiency of the project team can help you resolve personnel issues and assign important tasks to the right people.
Return on Investment (ROI): An essential KPI for all commercial projects in particular. Assessing the financial returns generated by the project is key to determining its value to the organisation.
Change Request Turnaround Time: Projects can move quickly, and deadlines can be strict. Success may hinge on how how quickly change requests are processed and approved.
Defect Rate: If your project is in product design, monitoring the number of defects or errors in the project is an essential component of Quality Control.
Client Retention: For service-oriented projects, assessing the retention rate of clients or customers is important for gauging its long term feasibility and profitability.
Vendor Performance: If you outsource to external vendors as part of your project, it is very important to evaluate their performance and adherence to any agreements made.
Schedule Performance Index (SPI): This KPI allows you to analyse the project's progress in relation to its schedule – essential when deadlines are set by the organisation.
Cost Performance Index (CPI): Similarly, budgets can also be tight, and assessing the project's cost performance in relation to the budget is key to ensuring it remains a cost effective venture.
Issue Resolution Time: Problems inevitably crop up as part of a project, especially those of a complex nature. Your team’s ability to resolve these in a timely manner is very important to ensure the project is delivered on time and to the highest possible standards.

Several tools and software are available for tracking and analysing KPIs, making it easier for project managers to access and interpret their data.

Putting it all together

Well-chosen KPIs are instrumental in completing successful projects, and their role in Agile methodologies and continuous improvement makes them indispensable in the world of project management.

The Genus team at Shorts have helped project managers across a wide range of industries select, implement and track the most relevant SMART KPIs for their activities, helping them guide their teams to success. If you think we can help your project succeed, we encourage you to get in touch.