Top Project Management Metrics and Process Measurement Metrics

Project management metrics are valuable tools to get a handle on large projects. They help you visualize how you're doing and make course corrections as necessary.

We've organized a list of the top project management metrics you need to know and use.

Earned Value Management (EVM)

Earned Value Management (EVM) is the most common project management metric used in the construction industry. It is a performance measurement tool that allows you to understand where your project stands, how it performs, and whether it is on track to finish on time and within budget.

Estimate to Complete (ETC)

The ETC is calculated by multiplying the difference between your remaining work and actual work done by the average number of work hours per day.

For example: Let's say that you have 10 days left in your project, and so far, you've completed half of it. Multiply these two numbers together and divide by 2 (one full day). This will give you the estimated hours needed to complete the remaining tasks.

Cost Variance Ratio (CV%)

The cost variance ratio is calculated by taking the project's current cost and dividing it by the budgeted price of the project. The result is then multiplied by 100 to get a percentage value. This metric is typically used for IT organizations' tracking, control, and planning purposes.

Cost Variance = (Actual Cost to Date / Estimate at Completion) * 100%

Estimate at Completion (EAC)

EAC is used to help you understand how much longer your projects will take and how much money they will cost. This allows you to monitor them more closely and make adjustments if needed so that nothing slips past your deadline or budget.

Cost Performance Index (CPI)

Cost Performance Index measures the cost of work performed divided by the actual price. This metric is used to monitor the progress and performance of projects against budget. It is calculated as the ratio of actual costs incurred divided by budgeted costs.

This metric helps determine whether your project is on track or off track and how to fix it.

Schedule Variance Ratio (SV%)

The schedule variance ratio measures the difference between the planned and actual values of a schedule's critical path. It is calculated by dividing the total negative schedule variance by the entire planned duration of the project. The formula for the Schedule Variance Ratio is:

Schedule Variance Ratio = (Actual Duration – Planned Duration) / (Planned Duration)

Planned Value (PV)

Planned Value (PV) is a project management metric that tracks the estimated value of work completed during a given period. It shows how much of the plan has been implemented. It's calculated by dividing the budgeted cost of work scheduled for each task by the actual price of work performed on each job. PV helps measure performance against the planned budget and schedule and provides insight into areas where changes may be needed to meet target goals.

Cost Overrun Rate

Cost overrun is a measure of how much a project overran its budget. It's expressed as a percentage of the total cost that was planned. So, for example, if you had planned to spend £100,000 but spent £150,000, you could say that you were 50% over budget.

Actual Cost (AC)

The actual cost (AC) is what it costs to complete the project. This may not be the same as the original estimate (OE). For example, if you have a fixed price contract and work out what it will cost to do something, then do it and find out later that it was cheaper than expected, your OE will be lower than your AC.

Schedule Performance Index (SPI)

The schedule performance index measures the variance of the project's actual progress compared to the planned progress. An SPI above 1 indicates that the project is ahead of schedule. In contrast, an SPI below 1 indicates that the project is behind schedule.

Process Measurement Metrics

The best Process Measurement metrics should be simple, relevant, and something that a production team can easily use to improve.

These are the most important metrics to track when looking at the process involved in a business.

Six Sigma

Six Sigma is a process improvement method. It is a set of tools and techniques used to measure and improve the quality of a product or service.

Six Sigma uses data analysis to find and eliminate defects in products and services. Six Sigma aims to reduce process variability, thereby increasing customer satisfaction, reducing waste, and saving money.

Cost of poor quality (COPQ)

The cost of poor quality measures the cost incurred by defects in production. This includes repairing imperfections after they've been discovered and the cost associated with finding and correcting defects before products are shipped.

Quality Function Deployment (QFD)

Quality function deployment (QFD) is a structured method for mapping customer needs and wants into specific product requirements. QFD helps companies better understand how customers view their products and services to improve them over time. Use this metric to identify areas where customers have problems using your products or services. Then, use that information to enhance your offerings over time.

Balanced Scorecard

The balanced scorecard is one of the most popular processes measurement metrics. It is a method used to measure and manage organizational performance. The balanced scorecard was first introduced by Robert Kaplan and David Norton in 1992. The Balanced Scorecard has four main perspectives: financial, customer, internal business processes, learning, and growth.

Business Process Reengineering

Business process reengineering (BPR) is a systematic approach to improving the efficiency of an organization's processes. This process involves redesigning business processes for more effective operation using strategic planning and technology solutions. BPR is "a structured methodology of analyzing an existing business model to improve its efficiency."

Conclusion

Incorporating the right mix of metrics into your team's workflow dashboard is essential. These metrics should align with your core values and business goals and be used to create a feedback loop that lets you improve at an organizational level. You're likely already collecting a fair number of metrics, but if not, this list will help get you started on the right path. As always, don't hesitate to adjust these measurements to suit your organization's unique needs.