How to Measure Project Performance?

How to measure project success

Measuring the project’s success and learning from those failures can create a massive impact on small businesses. Companies implementing successful Project Management help to raise the confidence level of the staff and their customers. If you are wondering how to measure project success, keep one thing in mind that the examination requires to be honest and complete. You can ask numerous stakeholders, management, customers, and employees for evaluating the project and review the outcome with the Project Manager. You might study the project in any format that will operate for the business. 

From the Project Management point of view, the definition of success is not only based on the parameters to deliver what you have promised your clients and customers on time. In different ways, success is a moving target with a large variable number that you have to keep track of at any specific moment. If you want to measure the project performance while the project is still in progress, it is one of the best ways to enhance your methods and processes for the upcoming times. It will help you to redefine success positively and produce a much more valuable team during the procedure. 

Why is it Significant to measure the Project performance?

Why and how to measure the project performance? It might seem like a stupid question to you, but a significant one to identify the project success rate. You can do nothing once the project gets over, whether it is a failure or a success. It was one of the prevailing philosophies for a long time. But with the development of the learning organizations, the recording information value about the enterprise past drives the strategies in the future to become more prevalent. 

Today the continuous improvement value based on the past data is fully acknowledged. It is through different rituals like post mortem meetings organizations can understand what is incorrect in a given project. It will help you to rectify the problems in your upcoming projects. By integrating new learning into the new procedures, especially about failures and successes, you can achieve higher project performance. That is why most of the large enterprises are giving importance to how to evaluate project success. Measuring the success of a specific project is now a staple job of high-performing organizations. Among the several reasons why it is necessary to measure project performance, we have selected the top three, which are unavoidable. They are as follows.

 
For Monitoring

Project performance helps the Project Manager to track, follow and observe. There is a conception that what gets measured should get it done. It is the case for the project performance and measurement.

 
For Reporting 

Reporting is the act of presenting the different measures. Measuring project performance is all about reporting different results and making various comparisons. In a project, it might be the weekly or monthly update a Project Manager delivers to the upper management level. It can also be the report that the PMO sends to the Board of directors every quarter for the projects that the company has successfully accomplished. 

 
For Improving

The project performance measure will assist the team in delivering a better outcome. The enhancing performance likelihood will increase when you measure the performance. These activities are meant for improving the project result. 

 

Why is it difficult to measure the project performance?

By examining the success of the project performance, you can gather information about what went bad or well in that mission. You can also identify all the success factors that you might apply in your later projects. Now according to you, what is a successful project? On-time delivery and budget of the projects should be the only two factors for measuring the project performance? Well, it may or may not be. What will happen if the project is delivered on time to the client, but after 4 months they are not getting any benefit from it? 

Some clients might be satisfied in terms of Project Management initially if there are no unforeseen delays and overworked resources. The measurement of project performance is completely subjective. If the project involves numerous stakeholders with conflicting interests, everyone will include a different perspective of the project and its result. Luckily, there are still some practices that will help you to measure the project performance through simple methods. 

 

Ways to Measure the Project Performance

There are specific ways to help you if you are confused about how to measure project success criteria. In this segment, we will share some of those below.

 
Planned Value

Planned value is one of the most significant ways through which you might measure the project performance. This factor describes the total money that your team is planning to spend on a specific project. Compare it to the total amount of work that the team has accomplished through that money. To know this number, take the percentage at any stage of the project stage and multiply it according to the budget at the completion time. The higher the number of planned values, the more value you will get for the work that you will be doing.

 
Cost variance and Cost Performance

You always have to consider the overall project cost performance to give you a detailed insight into what you might spend versus what you have spent. You have to deduct the actual cost from the earned value to arrive at the cost variance. If you have a positive outcome, there is a chance of finishing the project under the budget. If you have a negative outcome, your project might cross over the dedicated budget. Even if you have accomplished the project according to the client’s expectation, take care of this aspect. In this segment, you require to focus on completing the project within budget for the next assignment.  

 
Actual cost

It is another significant factor that will assist you in measuring the project performance. A completed project does not necessarily indicate that it was successful. You might have spent an enormous amount of money to accomplish a little. It will cause massive harm to the project in the entire process. This metric will allow you to know how much money you have actually spent by comparing it with the total completed work for the project. 

 
Technical aspects

The technical aspect for measuring the project performance consists of different elements that will reflect the design specifications, technical risk, and requirement compliance. The project technical prospect performance is all about what you are delivering and if it is fit for the purpose or not. When you have defined the product quality criteria before starting the project, compare the actual delivery against the planned ones. You have to ask whether you can offer the products that will meet the different necessities set out for a specific purpose. 

Always implement tangible data and measures in place of gut feeling or team interpretation. Get to know whether the product will meet the technical requirements and might include the quality assurance program. There might be a risk in the project if the actual deliverables are not similar to what you have promised. For every technical measure, you need to take into account every associated risk. The more risky the project is, the more control and monitoring you have to apply to it. It will assist in concluding the project with no glitch. 

 
Schedule

At the initial level, you can measure the project performance by comparing the prospects of what is delivered and the expected delivery. Check out the baseline of the last schedule and compare it to the latest version of it. Determine whether you have met every milestone or not. That will be the current schedule for the project performance. It will also allow you to know if you are ahead, on track, or lagging and where you need to be present at this time. 

Projects do suffer from the changes, and there might also be slight variations in the schedule. You have to restrict the upper and lower variance so that you do not have to worry regarding each task that is a day late. It might also affect the overall project.

 
Index for Customer Satisfaction

The Customer Satisfaction Index is measured on a scale of 1 to 100 and is a score based on the total survey point divided by the total questions. The result is then multiplied by 100. In simple terms, it means that you have met all the expectations of the client. It requires a combination of conformance requirements and fitness to use. CMI is the index that consists of hard measures for the user or customer buying behavior and soft variables for the client’s feelings or opinions. 

It also includes different measures like lost and repeat customers, revenue from the current customers, survey results for customer satisfaction, project-related surveys, returns or complaints, and market share. 

 

End Thoughts

As a Project Manager, you might encounter different other metrics that will answer the queries related to how do you measure the success of a project. But the above metrics are the most significant ones that will help you if you want to set up an ideal foundation for Project Management. Sticking to these metrics will also assist you to boost client satisfaction, decrease the cost, and keep detailed monitoring of the project schedules. These are the much-needed field practices that will help take your Project Management efficiencies to the correct path.