Choosing the Right Project Management KPIs

By Brendan Shanley, Nexus Project Services Director


Engineer developing reporting on project management KPIsThe right success metrics are critical to measuring the effectiveness of your portfolio and project management strategy in a tangible, objective way.

This starts with identifying the key performance areas from the long-term vision and short-term mission of your organization’s project management strategy, then determining success metrics, or key performance indicators (KPIs), for each. Choose too many and you create a burden for the organization to track.


The following considerations should be made when developing KPI’s:

  • What is the basis and definition of the KPI?
  • What data sources are available and needed?
  • What is the methodology for capturing/calculating the KPI?
  • What is the scoring criteria for the KPI?
  • How frequently does the KPI need to be reported?


Here are some additional guidelines for choosing the right project management KPIs, and a few specific measurements to consider.


Why Project Management KPIs are So Important

Especially in challenging economic environments, the right project management KPIs are essential to provide a pulse on your project and portfolio. KPI’s provide a status, but more importantly they can provide an early warning if corrective action is required to stabilize or improve performance. Therefore, how your project management organization (PMO) reports on KPIs is equally important. Relevant project management KPIs communicated regularly in meaningful ways to stakeholders help improve project portfolio management and decision-making. They also can help demonstrate the value of project management processes and team members to help organizations meet their business objectives.


To that end, consider collecting these metrics through a project management software and presenting them in an easily accessible and user-friendly dashboard.


So what are “relevant” KPIs reporting in “meaningful” ways? In a high-functioning organization, project management partners work with key stakeholders to understand how they perceive and realize value in a project. Project KPIs should therefore be chosen to show how the project management organization is adding value and affecting the organization’s bottom line. Ask the question: “How is the PMO helping stakeholders achieve their business objectives?”


Moving beyond the core metrics (e.g. the total number of projects completed, cycle times, tasks completed, time spent, cost variance), assessing the business impact (accelerating time to market, reduced cost, improved efficiency) is critical. Equally important is avoiding a “kitchen sink” approach of including so many metrics that you confuse or overwhelm stakeholders.


Some Important KPIs to Consider


Project management KPIs fall into two broad categories: those that track the effectiveness of the project management function, and those that track the impact and business value of the projects themselves.

Measures of PMO effectiveness include:

  • The percentage of projects completed on-time and at or below project budget. This can be measured over a specific time period, such as quarterly or annually. Results can be compared to previous corresponding periods to help show overall progress or regression.
  • The ratio of successful projects (those achieving their primary objectives) to all completed projects or all projects in the portfolio.
  • The ability of the PMO to measure and manage risk.
  • The effectiveness of the PMO in deploying resources. This can include funding, people allocation, technology/equipment, and other resources. Again, this can be measured over a specific time period with results compared to previous corresponding periods.
  • How well the PMO is managing project hurdles, including resource conflicts, disputes between individuals, accountability, and communication issues.
  • Stakeholder satisfaction with the PMO. The most effective way to get at this may be through surveying managers and other organizational stakeholders. Such a survey can be conducted quarterly or annually to compare results.
  • Customer satisfaction with the output of projects. Similar to determining stakeholder satisfaction, the PMO can survey external customers to assess their satisfaction with the organization’s completed work. Surveys can encompass qualities such as timeliness, communications effectiveness, overall quality, and perception of project success


Measures of PMO business impact or return on investment (ROI) include:

  •  The project management organization’s contribution of revenue to the organization. This can be challenging to measure directly, but may include Incremental sales, revenue, or enablement value (productivity, efficiency) attributable to the completion of the project.
  • How the PMO is driving a competitive advantage for the organization.
  • Reduced costs associated with completed projects (time savings, headcount reduction, vendor cost reduction, maintenance/downtime reduction).


What makes a good KPI?

Good Project KPIs are relevant, meaningful, and actionable.  All three are critical to:

  • identify positive and adverse trends
  • take corrective action if required
  • communicate status to key stakeholders

The project management leadership must take great care to make sure the KPIs they communicate are in alignment with stakeholder needs, while demonstrating the ways the PMO is supporting the broader business goals.


How Nexus can help

Nexus has a successful track record of helping our clients identify the project and portfolio KPIs that best demonstrate business impact. This is critical to helping our client’s project teams effectively promote the value of each project to key stakeholders.

With our recent investments, we have expanded our project services and control offerings beyond support for Nexus-led engineering projects. We are helping clients with management and reporting during procurement and construction, and we are guiding prioritization of projects across client portfolios for organizations that lack project or portfolio management capabilities. We also can help companies plan and build these capabilities for their organizations.

To learn more about our capabilities, and how Nexus’s deep understanding of your industry and business can accelerate your growth and profitability, contact us today.

Nexus’s Project Services and Controls team is here to help you drive greater returns for your business

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Brendan Shanley

About the Author

Brendan Shanley joined Nexus in 2021 as Project Services Director, overseeing our growing Project Services function. He brings more than two decades of knowledge and client-side experience in all aspects of project controls, cost engineering, planning, scheduling, and contract management.

To learn more about Nexus’s project services capabilities, download our brochure or visit our Expertise page.