Project Management Metrics Every Project Manager (PM) Needs to Track
Regardless if you’re a project manager or not, you can’t ever measure something you don’t measure. However, even if you understand every single metric you need, it might sometimes be challenging to identify which performance metrics you should pay attention to.
When it comes down to identifying how a project is doing, it might be quite hard to identify what’s going right and wrong. Also, without these detailed insights, you’re now left guessing how to solve project problems.
By using much more project management metrics, you can easily identify what’s working in projects and what's not. Therefore, we created a performance metric list you can track, so let’s dive deeper into this article to learn more.
10 Project management metrics you need to track right now
Gross profit margin
Gross profit margin is a ratio that indicates how much money your company spends on the project. Many business owners wonder why they should measure gross profit margin. Well, consider it this way, without measuring it, you won’t know how much money your business needs to make a profit.
Gross profit margins are excellent for determining which projects are worth the money and for doing business. A higher gross profit margin will indicate a higher return on investment (ROI). Based on the return on investment (ROI) you get, you’ll find out whether the project is worth it or not.
The formula for gross profit margin is Revenue- project expenses divided by revenue times 100. Once you use this formula, you’ll get your gross profit margin. In case you’re new to this, you can always consider using a project budget template.
Conversion rate optimization (CRO)
Conversion rate optimization is an important metric to consider. It’s the process of increasing the percentage of visitors and users for completing a specific action and increasing your lead number. Your CRO can be achieved through multiple metrics, which include:
Good conversion rates will depend on several factors, including your goals, amount of traffic, demographics, industry and more. However, how do you calculate your conversion rate? The formula is to calculate the number of conversions divided by the total visitors times 100.
For example, if you have 100 conversions and 5,000 visitors, your conversion rate will be 2%. Studies show that the ideal conversion rate is anywhere between 2% to 5%.
Planned value (PV)
The PV of your company is an important metric to consider. In other words, planned value (PV) is measuring the estimated cost of planned activities at any time. Moreover, it’s important to know that this metric focuses more on the scheduled value, not the actual one. This is to ensure that your project is on the right track.
In order to calculate the planned value (PV), you need to calculate the planned % complete of the project times your project's budget. At the very beginning, the planned value is the same as the budget, but after some time, the values change. For example, if your project's time duration is six months, after three months, 50% of your project’s time has passed, so the total value will change.
For example, if your budget is $50,000 with a time period of six months, the project's time has elapsed by 50%, so $50,000 (50% * $50,000), The PV will be $25,000 in three months.
Keep in mind that the PV isn’t useful if calculated on its own. You need to combine it with other metrics to get successful results.
Employee satisfaction score
The employee satisfaction score is an important metric to measure for your project's success. The core success of your business relies on how satisfied your employees are. Unsatisfied employees won’t fully contribute to the job because they aren’t happy with the work environment.
Satisfied employees will be more productive and hit higher efficiency levels than those who aren’t fully contributing. Studies show that satisfied employees are going to be more than 20% more productive in the workplace.
Therefore, if you want to have a productive workforce, consider contributing to your employee engagement levels. You can calculate your employee satisfaction score by calculating the total survey points score divided by the total questions times 100.
Time saved and lost
Time is the most precious thing you can have. It indicates whether the job will be done or not when the client expects it. You can measure time in the following ways:
Using this data makes it easier to diagnose issues. Teamwork makes this easier for groups by allowing them to add the estimated time for each task they seek to complete. On the other hand, meeting deadlines is an important factor to consider. Missed deadlines and milestones will negatively contribute to your project.
Collecting this type of data allows you to easily work with your team and address issues earlier on, providing your clients with important updates.
Earned value (EV)
Earned value (EV) provides you with the right amount of guidance you need to show how much value you earned in total from the project compared to how much you spent. In short, it’s comparing the value of the work regarding the time and approved budget for your project.
The formula for calculating the EV is % of completed work divided by the budget at completion (BAC).
Project scope creep
The project scope creep is the percentage of change from the original scope of work. The more unplanned work you get, the more likely you will face issues and blindly say “yes” to everything that the client asks for, making your project fail faster than it does.
Constantly reviewing your scope creep allows you to protect your team’s energy and time, allowing you to set the right expectations for your business.
So, how do you measure the project scope creep? You see your unplanned work tasks divided by the planned work tasks times 100, which will give you the % of scope creep.
Actual cost (AC)
The AC is one of the last metrics you can consider using after you calculate the EV and the PV. Thai measures the actual expenses of your done until up to date. Calculating the AC isn’t challenging. You add up your expenses until date, which shouldn’t only cover salaries, but the cost of other things such as materials and more.
The actual cost gives you a better understanding of your project's expenses and is used for calculating other metrics.
Schedule and cost variance (SV) (CV)
These two metrics are closely related to each other. The SV allows you to see how far your estimated budget is from your schedule. Keeping a close eye on these KPIs is essential for seeing if your project is on track or not.
If you want to calculate your SV, Calculate the earned value (EV) and minus it from the planned value (PV). If your SV turns out positive, it means you earned more than planned and that you’re ahead of your schedule. If it’s zero, it means you’re on time and if it’s negative, it means you’re behind.
Moreover, we have the CV. You can calculate it by measuring the earned value (EV) minus the actual cost (AC). Overall, the SV and CV are important for seeing a clear picture of whether your project is ahead of schedule or not going as planned.
Many project managers might not use these metrics, but they do help you clarify whether things are going to plan or not.
Another project management KPI that you should be concerned about is cost performance. This metric will tell you how well you’ve managed your money without losing quality. It not only lowers financial risks, but allows you to properly allocate capital. To calculate the cost performance, you can calculate the cost performance index (CPI), you need to calculate the earned value (EV) and divide it by the actual costs.
Performance needs to always be measured
Especially when you are participating in a project, the last thing you want to do is to not measure performance. If you don’t measure it, you won’t know how well your project is going. All of the metrics are used for the same purpose and that is to see how well you do.
If there’s a need for improvement, you can always make improvements once you measure your performance.
Tony Ademi is a freelance SEO content and copywriter. He has been in the writing industry for three years and has managed to write hundreds of SEO-optimized articles. Moreover, he has written articles that have ranked #1 on Google. Tony’s primary concern when writing an article is to do extensive research and ensure that the reader is engaged until the end.