Traditional Project Management Metrics are Confining
Program and project managers know the constraints involved with their roles. Each endeavor is a dynamic relationship between the amount of time needed to make things happen, the scope that defines its parameters, and the budget needed to complete it. These constraints are also the project management metrics used to evaluate a project’s health and success afterward.
And while they’d prefer their projects to be a harmonious balance of these three, the classic statement is, “Pick two, and the third will be determined by the two selected.”
If budget and timing are the most important, then the span of the project and depth of the detail have to meet those constraints. If budget and functionality are the most important, then the time to implement can be extended to provide participants working outside of their normal obligations an opportunity to complete work.
Budget is often the primary project management metric, as businesses don’t have an open checkbook. However, if the second or third consideration is time to initial implementation, shouldn’t it actually be time to value (TTV) or time to ROI?
For a major initiative, a business case is generally created with the functionality required (people and roles impacted, process change, enabling technology), the time to deliver the new initiative required (including change management), and a budget for internal and external resources, along with capital costs.
The project then often becomes a program — although it likely won’t be called that. Multiple work tracks are performed by different pieces of the business with the intent of everything coming together smoothly at the end to begin delivering business value.
Trained project management professionals track budgets carefully during the project to avoid overruns. But who’s tracking the interim benefits and TTV benefit plans? This is one of the difficulties of project management metrics. Too often in the time and capacity crunch of getting the project done, the “win” is that the capability has been implemented or functions properly, rather actually delivering upon the actual benefit plan.
Allowing programs to only have project management metrics of “on time” and “on budget” as success criteria devalues why the program was started in the first place.
Put Other Project Management Metrics to Use
Your program or project managers may have found themselves in a situation similar to the one described. They put so much effort into managing the three critical components of a project — components they were trained to manage — and in the end, it’s like nothing happened at all. You were frustrated, they were frustrated, and those whom the project was intended to provide a solution for are as inefficient as they were before (possibly more).
That’s because programs have greater success when there’s a broader focus that includes metrics that affect more than one business area. Otherwise, it would likely just be a project. Project and program managers are familiar with budget, scope, and time — metrics commonly known as project health metrics. But there are a variety of other metrics that should be tracked — not because we simply want to overload you with tasks, but for a vastly more important reason: delivering real business value.
Process metrics track, assess, and improve operational performance. Often they’re tracking items such as error rates, cycle times, and schedule adherence rates. While program health metrics will end with the program, process metrics should continue to assess improvement and whether processes are “backsliding” to previous behaviors.
For example, in the difference between project, program, and portfolio management, we explored ECI’s decision to invest in a CRM for sales and marketing. Cycle times for contracting with a customer and accessing a customer’s information might be process measures captured.
While process metrics are great indicators of a process in control and improving, generally they don’t translate into items that the executive team thinks about. Those are resultant metrics. Process metrics would determine a level of success in that both sales and marketing will be spending less time on common tasks, saving the money and moving the needle on overall goals.
Resultant metrics are measures of the ongoing performance of a program or project. In distribution and supply chain, common conflicting resultant metrics range from customer service (e.g., customer fill rates) and logistics cost to revenue lift and inventory (working capital). These are the operational language of the company’s executives.
Like process metrics, there are a number of resultant metrics that can be included in a project or program evaluation. Not all will apply to their circumstances and goals, but rely on your advisor, program manager, or project manager to identify those that should be included.
In the case of ECI, TTV for a customer is a strong metric — i.e., how quickly can the organization get a new customer onboarded and generating revenue?
The last group of metrics is corporate metrics — measures that assess progress toward an organization’s financial goals. Metrics such as PBIT (profit before interest and taxes), ROCE (return on capital employed), and cash flows are common operational corporate metrics tracked.
As we all well know, these measures are impacted by the entire business and the constantly evolving landscape. Thus, the impact can be difficult to determine. However, that doesn’t mean that the program should not undertake the effort to compare program-resulting corporate impacts with the business case approved and prioritized before the program was undertaken.
Are You Getting Real Business Value from Your Projects?
Bottom line: every project and program must deliver business value. Employing project health metrics that many project managers are trained on and expected to report on doesn’t move the needle in a meaningful, long-term way. It only tells you that the needle got to where it was going and whether it got there as expected.
If you’re an executive not getting the value from your programs that you believe you should be, we’d love to hear from you. Maybe you haven’t dipped your feet into these metrics and how to tie them with programs and/or projects just yet. Maybe you’re unsure how to put them to use for your organization. Or, maybe you simply haven’t been given the opportunity to ask for the information you actually need to see.
Whatever the situation, whatever your experience, reach out — and let’s see how we can get you there.