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5 Critical Project Management KPIs Every Project Manager Should Know

As a project manager, it’s your task to make sure that the projects get completed on time and within the specified budget. This requires focusing on timeliness, effectiveness, and quality of the project deliverables. In this context, project key performance indicators (KPIs) can prove as an invaluable tool.

A project consists of different parts that must be managed properly otherwise it will result in project failure. Project management KPIs consist of different measurement tools that help in finding out performance of the project team relating to different parts of the project. In other words, KPIs reflect how the team is performing and whether the performance helps in achieving organization wide goals.

Here we will explain five important KPIs that every project manager should know to measure team performance.

1. Scheduled Variance (SV)

Scheduled variance (SV) represents how much the actual value of the work completed compares with the budget or the planned value. It can be calculated by subtracting the actual costs of the work done till date with the total budget set at the start of the project. This metric will tell how much leeway you have regarding present value of the project as compared to the planned value.

2. Actual Variance (AV)

Another important project management KPI is the actual variance (AV). This metric gives an estimated cost of the project activities. Using the metric, you can know whether you have spent more than the budget or less.

For instance, suppose you have set a budget of $100,000 for a one-year budget. The AV after five months will be 50 percent of $100,000, which is $50,000. If you have spent more than this amount, it means that you are over budget. Contrary is the case if you have spent less than this amount.

3. Return on Investment (ROI)

Return on investment (ROI) is yet another critical project management KPI. This metric tells whether the project provides positive investment returns. It is derived by dividing revenues by the total expenditure. The metric is usually expressed in percentage terms. 

An important point to keep in mind is that not all projects are destined to have positive ROI. Depending on the organization’s strategic objective, some projects are allowed to have negative ROI. This is particularly the case when the focus is on retaining customers.

4. Schedule Performance Index (SPI)

SPI provides insights into the timely delivery of the project. The project will be considered ahead of schedule of SPI is greater than one. However, if SPI is less than one, then the project is considered to be behind schedule.

5. Customer Satisfaction Rate

Whether a customer was satisfied with the level of service is another important metric. The metric can be measured through an online survey. It is an often neglected KPI that have a major bearing on overall company profitability.

The above are the five most important KPIs for measuring project performance. The KPIs can tell project managers whether the task management was effective in delivering the required project deliverables. Focusing on improving the KPIs will have a positive impact on the project outcome and make a positive impact on the company’s bottom-line.