Question

What are the metrics for a successful project management?

Answer 1

Project Management: Project management refers to the applications and practices of planning, organizing, managing different processes/resources and finishing the task to accomplish the organizational goals within a prespecified time. Project management helps the team to apply knowledge, skills and company resources to fulfilling a project with specific constraints.

The project management process starts with a project plan that includes the application of different company resources, assigning tasks to the team member that will be managed and handled by the project manager.

Matrics for successful Project Management:

Project matrix and different KPIs (Key performance indicators) are important for project management to measure the performance and length and speed of the project. Keeping eye on different project management matrix helps project managers to optimize the project and to understand other requirements in the project. Project management matrics also help in measuring the performance of the project manager and team member and tell us how different resources are being used in the project. We will discuss different project management matrixes in the below points:

a. Productivity: This is one of the important metrics to measure the overall productivity of the project. It helps the project manager in understanding how well the organization resources are being used, and what is organization getting for utilization of the resources. It is the direct relationship between input and output.

b. Gross Margin: The ultimate objective of any project is to maximizing profit for the organization and this is calculated in terms of Gross Margin. This is the best metric of project health and also known as the mother of all metrics. The higher the margin means the project is doing well and it tells the project performance in terms of numbers. Gross Profit margin is calculated through below formula,

Gross Profit margin = (Money earned - money spend) /100

c. Earned Value: Earned value helps the project manager in calculating actual value of the project that has been achieved after a specif time. It tells us the actual work done but not the work should have been done (estimated value). Earned value is calculated by the below-mentioned formula,

Earned Value: % of actual work done * total budget of the project.

d. Employee Satisfaction: This metrics is used to understand the satisfaction level of employees or team members in the project. It is important to analyze the employee satisfaction level because employees are the core resources of any project and a satisfied employee performs better in the project.

e. Customer Satisfaction: Customer satisfaction level tells the project manager the quality of the product and service that was required by the client. Customer satisfaction levels can be verified from customer survey results, revenue generated from customers, and their post-purchase feedback.

f. Actual Cost: These metrics confirm on the actual money spent on the project so far. The actual cost spent is calculated by adding all the money spent on the project so far. Actual cost calculation is important and it tells that the project is spending money as per the budget allocated and also helps in cost management so that the project could be finished within the budget level. This metric is helpful in defining other metrics such as cost variance, gross margin, etc.

g. Cost Variance: This metric helps in explaining if the project is running under budget or over budget. It is the difference between the planned budget and actual cost spend on the project so far. If the cost variance is negative that means the project is running over budget and the project manager should work on reduce over expenses to finish the project in the planned budget.

h. Schedule Variance: Schedule variance is essential to understand whether the project is running ahead or behind the planned schedule of the project. It is the difference between earned value and planned value. It is the ultimate responsibility of the project manager to finish the project under schedule or on schedule

i. Utilization of resources: This helps the project manager how employees or team member are spending their time during the project. This metric tell us the productive work finished by each team member in the project.