Project Management Metrics, KPIs, and Dashboards
Description
Enables readers to easily understand and implement essential strategies on measuring project management performance
Project Management Metrics, KPIs, and Dashboards provides complete coverage of what metrics and KPIs are and how to use them effectively, offering comprehensive coverage of the different dashboard types, design issues, and applications that -readers may come across during practical application of the concepts. To aid in seamless reader comprehension, the work includes full-color dashboards from some of the most successful project management companies. As a modern resource, the work aligns with PMI's PMBOK¯® Guide and stresses value-driven project management.
Written by the leading authority in the field, sample topics covered in the work are as follows:
* Stakeholder relations management, effective metric measurements, selecting the right project metrics, innovation metrics, and how to become and stay agile
* Comparing traditional and nontraditional projects, defining complexity, decision making, fluid methodologies, global project management, and project management methodologies/frameworks
* Customer relations management, a new look at defining project success, and why customer satisfaction must always be considered
* Scope creep, scope creep dependencies, causes of scope creep, the business side of scope creep, and ways to minimize scope creep
For project managers across all industries, Project Management Metrics, KPIs, and Dashboards is a valuable resource on the subject that will bolster your awareness of what good metrics management really entails and arm you with the important knowledge needed to measure and communicate performance more effectively.
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Person
Harold Kerzner, PhD (Boynton Beach, FL), is Senior Executive Director for Project, Program, and Portfolio Management at the International Institute for Learning, Inc. (IIL). Dr. Kerzner's profound effect on the project management industry inspired IIL to establish the Kerzner International Project Manager of the Year Award. IIL donated $1M to the Project Management Institute Educational Foundation (PMIEF) to establish the Dr. Harold Kerzner Scholarship Fund.
International Institute for Learning, Inc. (IIL) is a global leader in professional training and comprehensive consulting services in the areas of project, program, and portfolio management, PRINCE2®, ITIL, Business Analysis, Microsoft® Office Project and Project Server, and Lean Six Sigma. IIL is an IIBA-endorsed education provider, a PMI® charter global registered education provider, and a member of PMI's Silver Alliance Circle and their Corporate Council.
Content
Preface ix
About the Companion Website xiii
1 the Changing Landscape of Project Management 1
Chapter Overview 1
1.0 Introduction 1
1.1 Executive View of Project Management 2
1.2 Complex Projects 5
Comparing Traditional and Nontraditional Projects 5
Defining Complexity 8
Trade-offs 10
Skill Set 10
Governance 11
Decision Making 11
Fluid Methodologies 12
1.3 Global Project Management 12
1.4 Project Management Methodologies And Frameworks 14
Light Methodologies 16
Heavy Methodologies 17
Frameworks 17
1.5 the Need for Effective Governance 20
1.6 Engagement Project Management 20
1.7 Customer Relations Management 22
1.8 other Developments in Project Management 23
1.9 a New Look at Defining Project Success 24
Success Is Measured by the Triple Constraints 25
Customer Satisfaction Must Be Considered as Well 25
Other (or Secondary) Factors Must Be Considered as Well 26
Success Must Include a Business Component 26
Prioritization of Success Constraints May Be Necessary 27
The Definition of Success Must Include a "Value" Component 28
Multiple Components for Success 29
The Future 29
1.10 the Growth of Paperless Project Management 30
1.11 Project Management Maturity and Metrics 31
1.12 Project Management Benchmarking And Metrics 35
Best Practice versus Proven Practice 36
Benchmarking Methodologies 37
Benchmarking Costs 38
Types of Benchmarking 38
Benchmarking Code of Conduct 40
Benchmarking Mistakes 40
Points to Remember 40
1.13 Conclusions 41
2 the Driving Forces for Better Metrics 43
Chapter Overview 43
2.0 Introduction 43
2.1 Stakeholder Relations Management 44
2.2 Project Audits and the Pmo 55
2.3 Introduction to Scope Creep 56
Defining Scope Creep 57
Scope Creep Dependencies 60
Causes of Scope Creep 60
Need for Business Knowledge 61
Business Side of Scope Creep 62
Ways to Minimize Scope Creep 62
2.4 Project Health Checks 64
Understanding Project Health Checks 65
Who Performs the Health Check? 67
Life Cycle Phases 67
2.5 Managing Distressed Projects 69
Root Causes of Failure 70
Definition of Failure 71
Early Warning Signs of Trouble 72
Selecting the Recovery Project Manager 73
Recovery Life Cycle Phases 74
3 Metrics 83
Chapter Overview 83
3.0 Introduction 83
3.1 Project Management Metrics: The Early Years 84
The Project 85
Timeline 85
3.2 Project Management Metrics: Current View 87
Metrics and Small Companies 88
3.3 Metrics Management Myths 88
3.4 Selling Executives on a Metrics Management Program 89
3.5 Understanding Metrics 91
3.6 Causes for Lack of Support for Metrics Management 95
3.7 Using Metrics in Employee Performance Reviews 96
3.8 Characteristics of a Metric 97
3.9 Metric Categories and Types 99
3.10 Selecting the Metrics 101
3.11 Selecting a Metric/kpi Owner 105
3.12 Metrics and Information Systems 106
3.13 Critical Success Factors 106
3.14 Metrics and the Pmo 109
3.15 Metrics and Project Oversight/ Governance 112
3.16 Metrics Traps 113
3.17 Promoting the Metrics 114
3.18 Churchill Downs Incorporated's Project Performance Measurement Approaches 114
Toll Gates (Project Management-Related Progress and Performance Reporting) 116
Quad Sections 116
4 Key Performance Indicators 121
Chapter Overview 121
4.0 Introduction 121
4.1 the Need for Kpis 122
4.2 Using the Kpis 126
4.3 the Anatomy of a Kpi 128
4.4 Kpi Characteristics 129
Accountability 130
Empowered 131
Timely 131
Trigger Points 131
Easy to Understand 132
Accurate 132
Relevant 133
4.5 Categories of Kpis 133
4.6 Kpi Selection 134
4.7 Kpi Measurement 140
4.8 Kpi Interdependencies 142
4.9 Kpis and Training 144
4.10 Kpi Targets 145
4.11 Understanding Stretch Targets 148
4.12 Kpi Failures 149
4.13 Kpis and Intellectual Capital 151
4.14 Kpi Bad Habits 154
KPI Bad Habits Causing Your Performance Measurement Struggles 154
4.15 Brightpoint Consulting, Inc.- Dashboard Design: Key Performance Indicators and Metrics 159
Introduction 159
Metrics and Key Performance Indicators 160
Scorecards, Dashboards, and Reports 161
Gathering KPI and Metric Requirements for a Dashboard 162
Interviewing Business Users 162
Putting It All Together-the KPI Wheel 163
Start Anywhere, but Go Everywhere 164
Wheels Generate Other Wheels 166
A Word about Gathering Requirements and Business Users 166
Wrapping It All Up 167
5 Value-based Project Management Metrics 169
Chapter Overview 169
5.0 Introduction 169
5.1 Value Over the Years 171
5.2 Values and Leadership 172
Project Manager 173
Team Members 173
Organization 174
Stakeholders 174
5.3 Combining Success and Value 175
Internal Success 177
Financial Success 177
Future Success 177
Customer-related Success 178
5.4 Recognizing the Need for Value Metrics 178
5.5 the Need for Effective Measurement Techniques 181
5.6 Customer/stakeholder Impact on Value Metrics 187
5.7 Customer Value Management 188
5.8 the Relationship Between Project Management and Value 193
5.9 Background of Metrics 197
Redefining Success 198
Growth in the Use of Metrics 200
5.10 Selecting the Right Metrics 204
5.11 the Failure of Traditional Metrics And Kpis 207
5.12 the Need for Value Metrics 207
5.13 Creating a Value Metric 208
5.14 Presenting the Value Metric in a Dashboard 215
5.15 Industry Examples of Value Metrics 216
Aerospace and Defense: Company 1 216
Aerospace and Defense: Company 2 217
Capital Projects: Company 2 217
IT Consulting (External Clients): Company 1 (No Percentages Provided) 217
IT Consulting (External Clients): Company 2 218
IT Consulting (External Clients): Company 3 218
IT Consulting (External Clients): Company 4 219
IT Consulting (External Clients): Company 5 219
IT Consulting (External Clients): Company 6 219
IT Consulting (Internal): Company 1 219
Software Development: (Internal) (No Percentages Provided) 219
Telecommunications: Company 1 220
Telecommunications: Company 2 (No Percentages Provided) 220
New Product Development 220
Automotive Suppliers 220
Global Consulting: Company 1 (Not Industry Specific and No Weights) 220
Global Consulting: Company 2 (Not Industry specific and No Weights) 221
5.16 Use of Crisis Dashboards for Out-of- Range Value Attributes 222
5.17 Establishing a Metrics Management Program 223
5.18 Using Value Metrics for Forecasting 225
5.19 Metrics and Job Descriptions 226
5.20 Graphical Representation of Metrics 227
5.21 Creating a Project Value Baseline 239
The Performance Measurement Baseline 239
Project Value Management 240
The Value Management Baseline 242
Selecting the Value Baseline Attributes 243
Overachievement Trends 245
Risks of Overachievement 245
6 Dashboards 247
Chapter Overview 247
6.0 Introduction 247
6.1 Does Everyone Know What a Dashboard Really Is? 252
Dashboards 252
Dashboard Design 253
Guided Analysis 254
Data Exploration 254
More 255
Not a Dashboard 255
Conclusion 255
6.2 How We Process Dashboard Information 256
6.3 Dashboard Core Attributes 256
6.4 the Meaning of Information 257
6.5 Traffic Light Dashboard Reporting 259
6.6 Dashboards and Scorecards 261
Dashboards 262
Scorecards 262
Summary 262
6.7 Creating a Dashboard Is a Lot Like Online Dating 264
Finding Out the Needs of the Stakeholders 264
Making a Connection 264
Choosing Your Key Performance Indicators 265
Selecting Your Visuals 265
Building on the Momentum 266
Maintenance 266
6.8 Benefits of Dashboards 266
6.9 Is Your BI Tool Flexible Enough? 267
A Flexible BI Tool-What Does It Mean and Why Does It Matter? 267
Why Is Flexibility So Important? 268
Stay up to Speed with Your Changing Business Needs 269
Be Independent (with Fewer Tools and Users Involved to Get Your Job Done) 269
Adapt to Each and Every User 269
Be Ready for the Unknown 269
6.10 Four EASY STEPS TO IMPLEMENTING A Successful Business Intelligence Solution 270
Step 1: Understand the Business Needs 270
Step 2: Keep It SMART 271
Step 3: Determine Your Deliverables 272
Step 4: To the Drawing Board 274
Closing Comments 274
6.11 Rules for Dashboards 275
6.12 THE Seven DEADLY SINS OF DASHBOARD Design and Why They Should Be Avoided 275
Deadly Sin #1: Off the Page, Out of Mind 276
Deadly Sin #2: And This Means ... What? 276
Deadly Sin #3: Right Data, Wrong Chart 276
Deadly Sin #4: Not Making the Right Arrangements 276
Deadly Sin #5: A Lack of Emphasis 277
Deadly Sin #6: Debilitating Detail 277
Deadly Sin #7: Not Crunching the Numbers 277
6.13 Brightpoint Consulting, Inc.: Designing Executive Dashboards 278
Introduction 278
Dashboard Design Goals 278
Defining Key Performance Indicators 279
Defining Supporting Analytics 279
Choosing the Correct KPI Visualization Components 280
Supporting Analytics 282
A Word about Labeling Your Charts and Graphs 284
Putting It All Together: Using Size, Contrast, and Position 284
Validating Your Design 286
6.14 All That Glitters Is Not Gold 287
6.15 Using Emoticons 310
6.16 Misleading Indicators 311
6.17 Agile and Scrum Metrics 313
Introduction: Agile Overview 313
Agile Metrics 315
General Agile Metrics 316
Scrum Metrics 320
Other Sprint Charts 325
Iteration Metrics 327
Scaled Agile Metrics 327
Lean Kanban Metrics 330
Summary 333
6.18 Data Warehouses 333
The Growth of Business Intelligence Systems 335
Big Data 336
6.19 Dashboard Design Tips 338
Colors 338
Fonts and Font Size 338
Use Screen Real Estate 339
Component Placement 339
6.20 Teamquest Corporation 340
White Paper #1: Metric Dashboard Design 340
White Paper #2: Proactive Metrics Management 351
The Future 359
Conclusion 359
6.21 a Simple Template 360
6.22 Summary of Dashboard Design Requirements 360
The Importance of Design to Information Dashboards 363
The Rules for Color Usage on Your Dashboard 363
The Rules for Graphic Design of Your Dashboard 365
The Rules for Placing the Dashboard in Front of Your Users-The Key to User Adoption 366
The Rules for Accuracy of Information on Your Dashboard 367
6.23 Dashboard Limitations 367
6.24 the Dashboard Pilot Run 370
6.25 Evaluating Dashboard Vendors 371
6.26 New Dashboard Applications 372
7 Dashboard Applications 375
Chapter Overview 375
7.0 Introduction 375
7.1 Dashboards in Action: Dundas Data Visualization 376
7.2 Dashboards in Action: Pie 376
7.3 Pie Overview 388
Pie Dashboard 388
Pie Portfolio Timeline 392
Pie Project Timeline 392
Pie People Timeline (Resource Planning) 395
Pie Project List 397
Pie on My Plate 397
Pie Recipes-Flexible Frameworks 403
7.4 Dashboards in Action: International Institute for Learning 403
8 the Portfolio Management Pmo and Metrics 407
Chapter Overview 407
8.0 Introduction 407
8.1 Critical Questions 408
8.2 Value Categories 408
8.3 Portfolio Metrics 410
8.4 Measurement Techniques and Metrics 411
8.5 the Growth of Portfolio Metrics 413
8.6 Metrics for Measuring Intangibles 415
8.7 the Need for Strategic Metrics 418
8.8 Crisis Dashboards 421
Defining a Crisis 421
Index 425
1
THE CHANGING LANDSCAPE OF PROJECT MANAGEMENT
CHAPTER OVERVIEW
The way project managers managed projects in the past will not suffice for many of the projects being managed now or for the projects of the future. The complexity of these projects will place pressure on organizations to better understand how to identify, select, measure, and report project metrics, especially metrics showing value creation. The future of project management may very well be metric-driven project management. In addition, new approaches to project management, such as those with agile and Scrum, have brought with them new sets of metrics.
CHAPTER OBJECTIVES
- To understand how project management has changed
- To understand the need for project management metrics
- To understand the need for better, more complex project management metrics
KEY WORDS
- Certification boards
- Complex projects
- Engagement project management
- Frameworks
- Governance
- Project management methodologies
- Project success
1.0 INTRODUCTION
For more than 50 years, project management has been in use but perhaps not on a worldwide basis. What differentiated companies in the early years was whether they used project management or not, not how well they used it. Today, almost every company uses project management, and the differentiation is whether they are simply good at project management or whether they truly excel at project management. The difference between using project management and being good at it is relatively small, and most companies can become good at project management in a relatively short time, especially if they have executive-level support. A well-organized project management office (PMO) can also accelerate the maturation process. The difference, however, between being good and excelling at project management is quite large. One of the critical differences is that excellence in project management on a continuous basis requires more metrics than just time and cost. The success of a project cannot be determined just from the time and cost metrics, yet many companies persist in the belief that this is possible.
The growth of project management applications to nontraditional projects such as those involving strategic issues, innovation, and long-term business investment opportunities have forced companies to rethink how project management can be better utilized. Companies have come to the realization that they must excel at project management rather than just being good at it. This requires the use of flexible methodologies rather than the one-size-fits-all approach, new tools, specialized metrics, creation of information warehouses, new data visualization programs, and packaging all of this into business intelligence systems.
Companies such as IBM, Microsoft, Siemens, Hewlett-Packard (HP), and Deloitte, to name just a few, have come to the realization that they must excel at project management. Doing this requires additional tools and metrics to support project management. IBM has more than 300,000 employees, more than 70 percent of whom are outside of the United States. This includes some 30,000 project managers. HP has more than 8000 project managers and 3500 PMP® credential holders. HP's goal is 8000 project managers and 8000 PMP® credential holders. These numbers are now much larger with HP's acquisition of Electronic Data Systems (EDS).
1.1 EXECUTIVE VIEW OF PROJECT MANAGEMENT
Companies today perform strategic planning for project management and are focusing heavily on the future. Several of the things that these companies are doing will be discussed in this chapter, beginning with senior management's vision of the future. Years ago, senior management paid lip service to project management, reluctantly supporting it to placate the customers. Today, senior management appears to have recognized the value in using project management effectively and maintains a different view of project management, as shown in Table 1.1.
TABLE 1.1 Executive View of Project Management
OLD VIEW NEW VIEW Project management is a career path. Project management is a strategic or core competency necessary for the growth and survival of the company. We need our people to receive Project Management Professional certifications. We need our people to undergo multiple certifications and, at a minimum, to be certified in both project management and corporate business processes. Project managers will be used for project execution only. Project managers will participate in strategic planning, the portfolio selection of projects, and capacity-planning activities. Business strategy and project execution are separate activities. Part of the project manager's job is to bridge strategy and execution. Project managers just make project-based decisions. Project managers make both project and business decisions.Project management is no longer regarded as a part-time occupation or even a career path position. It is now viewed as a strategic competency needed for the survival of the firm. Superior project management capability can make the difference between winning and losing a contract.
For more than 30 years, becoming a PMP® credential holder was seen as the light at the end of the tunnel. Today, that has changed. Becoming a PMP® credential holder is the light at the entryway to the tunnel. The light at the end of the tunnel may require multiple certifications. As an example, after becoming a PMP® credential holder, a project manager may desire to become certified in
- Business Analyst Skills or Business Management
- Program Management
- Business Processes
- Managing Complex Projects
- Six Sigma
- Risk Management
- Agile Project Management
Some companies have certification boards that meet frequently and discuss what certification programs would be of value for their project managers. Certification programs that require specific knowledge of company processes or company intellectual property may be internally developed and taught by the company's own employees.
Executives have come to realize that there is a return on investment in project management education. Therefore, executives are now investing heavily in customized project management training, especially in behavioral courses. As an example, one executive commented that he felt that presentation skills training was the highest priority for his project managers. If a project manager makes a highly polished presentation before a client, the client believes that the project is being managed the same way. If the project manager makes a poor presentation, then the client might believe the project is managed the same way. Other training programs that executives feel would be beneficial for the future include:
- Establishing metrics and key performance indicators (KPIs)
- Dashboard design
- Managing complex projects
- How to perform feasibility studies and cost-benefit analyses
- Business analysis
- Business case development
- How to validate and revalidate project assumptions
- How to establish effective project governance
- How to manage multiple stakeholders many of whom may be multinational
- How to design and implement "fluid" or adaptive enterprise project management (EPM) methodologies
- How to develop coping skills and stress management skills
Project managers are now being brought on board projects at the beginning of the initiation phase rather than at its end. To understand the reason for this, consider the following situation:
SITUATION: A project team is assembled at the end of the initiation phase of a project to develop a new product for the company. The project manager is given the business case for the project together with a listing of the assumptions and constraints. Eventually the project is completed, somewhat late and significantly over budget. When asked by marketing and sales why the project costs were so large, the project manager responds, "According to my team's interpretation of the requirements and the business case, we had to add in more features than we originally thought."
Marketing then replies, "The added functionality is more than what our customers actually need. The manufacturing costs for what you developed will be significantly higher than anticipated, and that will force us to raise the selling price. We may no longer be competitive in the market segment we were targeting."
"That's not our problem," responds the project manager. "Our definition of project success is the eventual commercialization of the product. Finding customers is your problem, not our problem."
Needless to say, we could argue about what the real issues were in this project that created the problems. For the purpose of this book, three issues stand out. First and foremost, project managers today are paid to make business decisions as well as project decisions. Making merely project-type decisions could result in the development of a product that is either too costly to build or overpriced for the market at hand. Second, the traditional...
