12 Project Management KPIs You Should Be Tracking

Key performance indicators, or KPIs, are essential tools for monitoring and evaluating the success of your business, people, and projects.

KPIs for project management encompass a wide range of measures and assess different performance aspects throughout the entire project lifecycle. Information gathered from tracking the right project KPIs provides valuable insights, enabling project managers to gauge progress and make informed decisions.

For example, financial indicators, such as cost performance and budget variance, help track the project's financial health and efficiency. Time-related KPIs, such as cycle time and schedule variance, focus on assessing project timelines and whether tasks are completed within the planned time frame. While resource-related KPIs, including resource capacity and allocation, evaluate the effectiveness of resource utilization and measure whether they are sufficient to meet project demands.

Why Track Project KPIs?

KPIs in project management act as measurable benchmarks, allowing project managers and teams to gauge progress and ensure project goals are met. By monitoring and analyzing the right KPIs, you can identify areas requiring attention or improvement, make informed decisions, and take proactive actions to keep the project on track.

Project KPIs can also provide valuable insights into the overall effectiveness of your project management methodology.

Identifying the KPIs You Should Track

When identifying which project KPIs to track, you should follow a structured approach to select the most relevant metrics for tracking the project's success.

You should clearly define the project objective and use that to identify the most appropriate metrics for monitoring progress towards that goal. For example, if the aim is to improve cost efficiency, then KPIs related to cost variance or labor cost may be suitable.

Consider any unique characteristics of the project. Each project will have different requirements and challenges, and the KPIs you track should reflect these factors. For instance, if the project involves managing a remote team, KPIs related to team collaboration and communication might be important.

You must involve key stakeholders, such as project teams and managers when selecting which KPIs to measure. These individuals have valuable insights and expertise that can contribute to identifying the most relevant metrics.

For the best results, review and update your chosen KPIs as the project progresses. As things evolve, requirements and priorities may change, and so should the KPIs you measure.

12 Project Management KPIs Your Firm Should Track

1. Net Income

Net income is an important financial KPI to track to measure the overall profitability of a project, i.e., the amount the company made after operating expenses, taxes, etc.

This KPI, calculated by subtracting total costs from total revenue, can tell you how cost-effective your projects are and whether they achieved the desired financial performance.

2. Return on Investment/Project Profitability

Return on Investment (ROI) is a financial performance metric that allows project managers to evaluate how much value the investment in the project generated.

To calculate ROI, you need to compare the revenue generated against the costs incurred. These include direct project costs, such as materials and labor, and indirect costs, like overhead and administrative expenses. The outcome, expressed as a percentage, highlights the financial gain or loss generated by the project.

3. Budget Variance

Budget variance measures the difference between the planned budget and the actual budget of a project.

Measuring budget variance helps project managers and teams identify potential cost overruns early, allowing them to take corrective actions and ensure they stay within the project budget. By monitoring this financial metric, you can also track the overall financial health of the project and make informed decisions regarding resource allocation and cost efficiency.

The data needed to calculate budget variance can be obtained from project management tools, financial reports, and expense-tracking systems.

4. Earned Value

Earned value (EV) is used to measure the progress of a project in terms of the value gained compared to the actual cost incurred. It compares the estimated value of completed work with the actual value achieved.

This KPI shows if the project met its goals within the set budget and timeline. By comparing the planned value (PV) and the project's actual cost (AC), project managers can analyze the cost performance and identify any variances.

5. Planned Value

Planned value (PV) measures the estimated cost of scheduled work up to a specific point in time. This KPI allows you to compare the actual cost and schedule performance with the planned schedule and budget, enabling them to make informed decisions and take corrective actions when necessary.

To measure PV, the project manager must allocate budgets to specific tasks and assign planned start and end dates. By tracking the progress of each task and comparing it against the estimated values, the project manager can calculate the PV.

6. Cost Performance Index

The cost performance index (CPI) provides valuable insights into the cost efficiency of a project. This performance metric measures the ratio of EV (the budgeted cost of work performed) to the actual cost.

By tracking the CPI, you can identify any potential deviations from the budget and take appropriate measures to address them, ensuring that the project remains financially sustainable and avoids cost overruns.

7. Resource Capacity

Resource capacity measures the availability and capability of project resources to undertake project tasks and activities. Tracking resource capacity helps to ensure correct resource allocation and utilization, resulting in avoidance of resource conflicts and successful project delivery.

Measuring resource capacity helps project teams identify potential bottlenecks and resource constraints early on, enabling them to address these issues and prevent project delays.

8. Billable Utilization Rate

The billable utilization rate is a KPI that shows how much time is spent on billable activities in percentages. It is a valuable metric for tracking actual hours worked vs billable hours, team performance and productivity.

Measuring the billable utilization rate allows you to identify areas where resources are underutilized. It can also highlight overutilized resources, enabling project managers to reallocate tasks and avoid the risk of burning out or losing top talent.

9. Cycle Time

Cycle time tracks the time it takes to complete a project or a specific process within a project. This KPI provides valuable insights into the efficiency and productivity of project managers and teams.

By tracking the time it takes to complete project activities, you can identify delays and proactively address them. Additionally, cycle time helps in evaluating the performance of project teams by comparing the actual time spent on tasks with the planned or estimated time.

10. Schedule Performance Index

The schedule performance index (SPI) measures the efficiency of a project in terms of meeting its scheduled timeline. It is calculated by dividing EV by PV.

Measuring the SPI provides insights into the project's schedule performance. By comparing the actual progress against the planned progress, project managers can determine if the project is ahead of schedule (SPI > 1), on track (SPI = 1), or behind schedule (SPI < 1).

By tracking this performance metric, you can identify potential schedule delays early on and take appropriate corrective actions to keep the project on track.

11. Schedule Variance

Schedule variance (SV) measures the variance between the planned and actual project schedule. A positive SV indicates that the project is ahead of schedule, while a negative SV suggests that the project is running behind schedule.

Measuring SV allows you to identify potential schedule deviations early on and make necessary adjustments to keep the project on track.

12. On-Time Completion

This KPI tracks the percentage of tasks completed on time or within the scheduled timeline. This metric measures the effectiveness and efficiency of project teams in meeting deadlines, as well as the overall success of a project. You can use on-time completion to identify potential delays and take corrective action where necessary.

Tracking KPIs is Crucial for Project Success

Tracking KPIs is crucial for the success of any project. By monitoring and measuring important metrics such as actual cost, schedule performance, resource capacity, and on-time completion, you can gain valuable insights into the progress and future performance of your projects.

KPIs enable project teams to make data-driven decisions, allocate resources efficiently, and achieve desired project goals within the defined time frame and budget.

Project KPIs also facilitate communication and collaboration among stakeholders by objectively measuring project progress and outcomes. They help project managers monitor project deliverables, timelines, and budgets, enabling them to make timely interventions and adjustments to keep the project on track.

A project-based ERP solution can help firms with KPI tracking by integrating data from different aspects of the business and providing a single source of truth which can be pulled into various reports and dashboards. Deltek's ERP solutions are designed to meet the specific needs of project-based businesses and deliver real-time visibility into business and project performance.