In a perfect world, all projects would be successful, completed on time, and within budget. Unfortunately, we don’t live in a perfect world. Projects can quickly go off track, resulting in failure.
According to the Project Management Institute (PMI), 14% of projects fail. This is often due to a lack of visibility into how a project is progressing. This is where key performance indicators (KPIs) come in.
1. Set clear objectives and goals for your project
Before you can determine what to track, you need to know what you’re working toward. This is where project objectives and goals come into play.
Objectives provide a clear outline of what you’re trying to accomplish, and goals help you understand how you’ll know when you’ve reached those objectives. Use the SMART criteria to help you define your objectives and goals.
2. Define the project scope
It’s important to define the project scope, which will help you understand what work will be included and what won’t. This is important for setting expectations with stakeholders and managing the project budget.
When you define the project scope, you should also identify the project KPIs. This will help you understand what success looks like and how you will measure it.
3. Identify project stakeholders
In a perfect world, everyone involved in a project would have the same level of access to information. But, in reality, that’s not always the case. Whether it’s due to privacy concerns or simply not wanting to overwhelm stakeholders with too much information, not everyone needs to know everything.
For that reason, it’s important to identify who your project stakeholders are and what level of information they need. You can then tailor the information you share with them accordingly.
4. Choose the right KPIs
You should track multiple KPIs for a project, but it’s also important to prioritize and focus on the most important. Otherwise, you could end up with too much data and not know how to make sense of it.
To avoid this, you should determine which KPIs are most important to your project and team. Then, you can track those KPIs on a regular basis and use the data to make informed decisions.
For example, if you’re managing a marketing project, you might want to track KPIs like website traffic, conversion rate, and customer acquisition cost. But if you’re managing a software development project, you might want to track KPIs like code quality, project velocity, and customer satisfaction.
5. Collect data to track your KPIs
Once you’ve determined which KPIs you’ll track, you need to collect data. Collecting data is an ongoing process, and you should start collecting data as soon as possible. The data you collect will help you determine how successful your project is and will allow you to make informed decisions about your project.
There are many ways to collect data, including surveys, interviews, and questionnaires. You can also use data from your project management software, such as task completion rates and time tracking data. In retail or eCommerce projects, you might also collect product-level data like inventory updates or UPC codes to track item-specific performance. Whatever method you choose, it’s important to collect data regularly and to be consistent in how you collect and record data.
6. Use a KPI dashboard
KPI dashboards are a great way to keep your project team and stakeholders in the loop. These dashboards can be shared with a link, or you can take a screenshot and send it in an email.
With a KPI dashboard, you can display your project’s KPIs in a way that’s easy to understand and visually appealing. If your visual reports rely on older or blurry assets, take time to unpixelate images to maintain a professional, clear presentation that stakeholders can trust. You can also set up your KPI dashboard to automatically update with real-time data, so your team and stakeholders always have the most up-to-date information.
There are many tools you can use to create a KPI dashboard, including project management software, Excel, Google Sheets, and more. You can also use a KPI dashboard template to get started.
7. Make sure all data is accurate
Accurate data is crucial to the success of your project. If you’re not tracking the right KPIs or if your data is inaccurate, you could end up making poor decisions that could cost your team time and money.
Make sure that you have a system in place to collect, organize, and analyze your data. This could be as simple as using a project management tool with built-in reporting features, or you could use a more advanced data analysis tool.
Whatever you choose, make sure that you’re collecting data in real time, and that you’re cross-referencing data from different sources to ensure that it’s accurate.
8. Analyze the data
Once you’ve got all your data, it’s time to analyze it. This is where you’ll make sense of all the numbers and decide what they mean for your project.
Look for trends in the data. Are you seeing the same patterns over time? If so, that could be a sign that you need to make some changes to your project.
You should also compare your data to your original project goals. Are you on track to meet those goals? For online businesses, this often includes comparing performance against key eCommerce success metrics like conversion rate, average order value, or customer retention. If not, what changes do you need to make in order to get there?
Finally, don’t be afraid to ask for help with your analysis. If you’re not sure what the data means, talk to your team or your project manager.
9. Make changes when necessary
Projects are unpredictable and can change at the drop of a hat. Your project KPIs need to be able to change with the project.
For example, if a project is behind schedule, you may need to adjust your timeline KPIs to reflect the new schedule. If the budget increases, you may need to adjust your budget KPIs to reflect the new budget.
The key is to make changes quickly and communicate those changes to your team and stakeholders. This will help everyone stay on the same page and make sure that the project stays on track.
10. Automate your KPI tracking
If you’re using a lot of different tools to track your KPIs, it can be time-consuming to pull all of that data together.
To save time, consider automating your KPI tracking by using a tool like Databox. Databox connects with more than 70 popular business tools, so you can pull all of your KPI data into one place.
You can also set up custom alerts and reports in Databox, so you can easily keep track of your KPIs without having to spend a lot of time on it.
11. Communicate the results
Your stakeholders have a vested interest in the success of the project, so it’s important to communicate the results of your KPI tracking efforts.
If your KPIs show that the project is on track to meet its goals, be sure to communicate that to your stakeholders. On the other hand, if your KPIs show that the project is off track, be prepared to communicate that as well.
In either case, it’s important to communicate the results in a clear and concise way. Be sure to provide context for the results, and be prepared to answer any questions that your stakeholders may have. Sharing insights or even inspiring HR quotes along with your KPI results can help reinforce key messages and motivate your team and stakeholders as you present your findings.
Conclusion
It’s important to remember that the KPIs you choose for your project will be unique to the project, the team, and the organization. While you can use the list above as a starting point, you should also take the time to think about what metrics matter most to your project and what KPIs will help you make the most informed decisions possible.