by Dharam CW2 | Jan 19, 2024 | General
Project management is becoming an essential aspect all around the world. But, many businesses need help to complete projects successfully owing to a mismatch between business strategies and project management. They require assistance in determining the relationship between business strategies and project management. Alignment is essential to get a competitive edge and meet business objectives. Therefore, project management has grown its importance and is now critical in many firms.
Constraints Confront Projects
Projects are any temporary activity with a start, an endpoint, and specific performance objectives. Three constraints confront projects:
(1) Time
(2) Budget
(3) Performance
To achieve the organization’s goals, it is considered that the above three constraints need to be fulfilled. Therefore, project management is critical to attaining corporate objectives and is regarded as the organization’s backbone. And it is critical to achieving strategy, company goals, and intended outcomes.
Project Management
Project management uses specific knowledge, skills, tools, and techniques to deliver value to people. Project management has emerged as a critical concern for many worldwide businesses. Many project management implementations have been effective, while others have been deemed a failure. Projects are seen as the organization’s backbone, with success implying a great deal for an organization’s ability to compete. A project is described as a planned set of related tasks that must be completed within a specific time frame and particular costs and other constraints.
A Six-Step Technique That can be Useful in Avoiding the Worst Disasters in Project Management
A six-step technique that can be useful in avoiding the worst disasters in project management is:
Step 1: Determine the project’s scope.
Step 2: Establish the intended goal
Step 3: Describe each project component task.
Step 4: Determine the key players.
Step 5: Establish schedules for each project component.
Step 6: Evaluate, revise, and reallocate.
The successful beginning and execution of initiatives are largely dependent on strategy. Many businesses need help with misaligned projects and a systematic approach to aligning project management with business strategy. Organizations are better equipped to achieve their organizational goals by linking their initiatives to their business strategy. Project strategy should be linked to the project’s goals and objectives to achieve its desired competitive position.
Business Strategy
Business strategy is a complete collection of actions or activities that direct the use of a firm’s resources to achieve the vision and goals of the business and provide a long-term competitive advantage. Strategic management involves translating strategy into action to operationalize strategic objectives and gain a competitive advantage.
To ensure that strategies are translated into actions, they must be operational, which includes characteristics such as structuring an organization to support successful performance and enabling success through the way an organization’s various resource areas, such as people, information, Finance, IT, and so on, are managed. As a result, companies that implement their strategic plans may do better in sales growth, profits growth, deposit growth, return on assets, return on equity, return on sales, and return on total invested capital than those that do not.
Levels of Strategies are Offered by Different Levels of a Business
However, different levels of strategies are offered by different levels of a business in every organization, including:
- Corporate Planning:It requires a high degree of strategic decision-making to meet the stakeholders’ expectations.
- Strategy for Business Units:The goal of this strategy is to acquire a competitive edge for the services and goods provided, and choices at this level are focused on product selection, acquiring a competitive advantage, meeting consumer requirements, and creating new possibilities.
- Operational strategy:It is concerned with resource coordination and improvement, resulting in the effective and efficient implementation of the business unit-level strategy.
Strategy implementation requires taking activities and accomplishing tasks and should concentrate on how to materialize these strategies.
The following major points must be considered during implementation:
- Work execution necessitates distributing resources such as finances, people, and equipment. The organizational resources are limited.
- The implementation phase necessitates the creation of a project-supportive organizational structure.
- A project selection and prioritization framework guarantee a solid relationship between projects and the strategic strategy.
Managerial challenges include:
- Connecting project management with corporate strategy.
- Encouraging individuals to collaborate in developing new ideas.
- Renew existing strategies.
Aligning Business Strategy with Projects
Aligning the company’s projects to optimize their contributions to strategic goals necessitates a highly coordinated effort. Integration requires a strategy for selecting initiatives based on their value to the strategic plan. Organizations will need business and project management experts to collaborate to achieve business objectives to become more competitive, efficient, and lucrative. Both business and project management specialists will collaborate to connect initiatives with company objectives. The alignment of company strategy with project management is a fundamental problem for every organization.
Such alignments are challenging to achieve because business strategy objectives are only sometimes explicit, adequately articulated, or compatible with project management activities. Misalignment can lead an organization to fall short of its aims and objectives. Understanding the alignment may be one of the most challenging aspects of the project management process. Alignment is a process that requires dominating leadership, top management backing, effective communication, a collaborative work atmosphere, trust, correct prioritizing, technical setup, and a thorough understanding of the business’s operations. To obtain the intended outcomes from the selected projects, the company should be able to develop capabilities and then distribute those competencies to the recommended projects. To ensure that corporate projects are linked with corporate strategy, keep the following in mind:
- Is the company committed to strategic project management?Most businesses have hundreds of projects running at any given time; therefore, there must be a corporate commitment to the art and science of project management.
- Is there a policy in place for formally preparing project charters?Because projects are the methods through which corporate plans are implemented, they must adhere to the original business philosophy, strategy, and objective. Project charters are the tool for doing so.
- Is there collaboration between the business group and those in charge of project implementation?Early engagement of project implementation personnel is required. While this theory appears logical, putting it into practice is difficult. First, corporate planners may choose to prepare without the assistance of considered “outsiders.” Then there’s a good probability that the right individuals are doing something other than brainstorming and assessing the early stages of a business strategy.
Benefits of Aligning Business Strategy with Projects
Some benefits the organizations include:
- Saved money and resources
- Increased profitability
- Retained customers
- Increased market share
Prioritizing a project based on its contribution to strategy achievement does not ensure project success. Still, consistent resource allocation is also a big responsibility. Therefore, a significant point to ensure alignment between project management and strategy is as follows:
- To carry out the suitably chosen projects efficiently
- Companies must ensure that they can implement the projects and programs.
Therefore, the alignment of projects is strongly influenced by top management.
Why Should Project Managers Care About Business Strategy?
A project manager must be able to connect their project within the larger context of the company to be truly effective. Understanding the basic business strategy is critical to achieving a great outcome. Strategic alignment and delivery should be wider than senior-level executives because the outcomes influence everyone in the business. On the other hand, a project manager should be wholly involved in all aspects of the project, including understanding and being concerned about business strategy.
Why Should Project Managers Care About Business Strategy?
Although it may appear counterproductive to focus on larger goals rather than the project itself, there are many significant reasons why project managers should be concerned with business strategy:
- Boosts Team Morale
A team will follow the project manager’s instructions. Connecting your project to a larger company goal offers everyone a feeling of purpose and connectivity. It helps people realize they are contributing to a more significant cause rather than just completing the work. It enhances team morale in this setting because it offers employees a feeling of purpose.
Furthermore, when individuals believe there is a greater good at risk, persuading them to pivot on a project is simpler. Finally, when teams can see the larger picture, they can better recognize when there is a break in activity or when resources need to be reallocated.
- Establishes Stakeholder Support
Understanding executive jargon provides you greater leverage when requesting and securing stakeholder support. A project manager will gain more cooperation if they can explain to senior team members how their participation will benefit the organization. Understanding the company’s strategy enables a project manager to structure requests in ways that are more likely to receive approval and favorable feedback. If a project manager can instill value in their team members and senior stakeholders, the odds of project success increase significantly—the greater the level of support, the more likely a favorable result.
- Outputs and Outcomes
Business strategy is about taking a step back and looking at the big picture. The traditional approach to project management held that the end of a project was about output, and what someone did with that data was their responsibility. Modern project management requires a professional to analyze the overall company strategy and what will happen with the project’s output when it goes out of your hands. It’s about remaining business-aware throughout the project so that the company’s best interests can always guide it. This awareness is how great employee morale and stakeholder support are achieved. Today’s most effective project managers can relate project outputs to successful corporate outcomes.
Final Thoughts
A good project manager should be familiar enough with their company’s strategy to utilize it to increase team morale and create a broader picture for their team. Once the team is on board, the same interactions may be used to obtain stakeholder support. Finally, the ability to link output to outcomes will guarantee that the project is successful at every step. Project managers and business leaders must formally understand how to establish, explain, and maintain strategic focus. This view will give project execution a new dimension and bring project management closer to being a competitive weapon for organizations. Choosing the right strategic focus at the start of a project and making it consistent with the company plan can help the project succeed and lead to better business results.
Projects offer an excellent opportunity to obtain a competitive advantage and bring value to the firm. Strategic project management is thus essential. Therefore, one of the most critical parts of project strategy is having a sufficient strategic focus.
Lastly, an understanding of business strategy makes for a well-rounded project manager.
Feel free to check out my discussion on this topic with Thomas Walenta in YouTube
For any questions related to your Project Management career, training, and certifications, you can book an obligation free 15 minutes session with me by visiting https://bit.ly/2SbhTOK
You can subscribe to the vCare Project Management YouTube Channel to catch future videos of our Q&A series and certification success stories: https://bit.ly/2YF0wJl
You can subscribe to and follow my podcasts and interviews with Project Management Experts on YouTube at https://bit.ly/2NDY8wd
by Dharam CW2 | Jan 1, 2024 | Professional Resilience and Inspiration Stories
As we welcome the new year, it’s time to let go of the past and embrace new beginnings. Wishing everyone a Happy New Year! 🎉
May 2024 bring innovation, growth, and success in all your endeavors. Let’s connect, collaborate, and create a year to remember. Cheers to a fresh start!
Happy New Year 2024: Embrace New Beginnings
by Dharam CW2 | Nov 24, 2023 | General
The world is becoming more aware of the destructive impacts of climate change, and many businesses have started realizing the critical importance of sustainability to their future operations. Making the projects more sustainable is important to build a more sustainable world. But how to establish it?
Consumer Shift to Sustainability
According to Deloitte research, 28% of customers have stopped purchasing specific items owing to ethical or environmental concerns, increasing to 45% among Gen Z consumers. Approximately half of the consumers are prepared to spend extra money on more ethical and ecologically friendly brands.
However, keeping track of and being open about an organization’s sustainability initiatives is difficult if these metrics and methodologies are not evaluated and integrated into project processes. Unfortunately, what frequently happens is a lot of greenwashing, over-promising, and under-delivering sustainability goals, which may lead to even more distrust in brands and corporations.
As a result, many organizations are adding and integrating new sustainability features into their pre-existing project processes to meet the growing need for accountability and transparency in sustainability activities. However, as regulations evolve and customers grow more attentive, this strategy may no longer be adequate. That is why the organization needs sustainable project management.
Sustainable project management
71% of the world’s top 500 companies openly disclose their greenhouse gas emissions, among other energy metrics. Sustainability has become a commercial priority for all industries, and organizations recognize that it is not responsible for ignoring the problem.
Broadening Project Management for Sustainability
However, sustainable project management is more than just being green and combating climate change. It is a duty to ensure that resources are utilized appropriately, that individuals are treated equally and fairly, and that communities are considered when making choices. Therefore, project managers in this sector will adopt a comprehensive approach, evaluating environmental, social, and economic aspects. They collaborate with environmental planners, hydrogeologists, and geotechnical engineers, to name a few of the ecological professions helping to remake our planet for the better.
Principles of Sustainable Project Management
Sustainable project management is an approach that:
- Takes into account the complete Triple Bottom Line viewpoint.
- Considers the complete life cycle of a project, from project-related activities through final deliverables.
- Engages stakeholders actively and openly rather than merely managing their expectations.
- Accepts responsibility for its actions to society and the environment.
- Considers the short and long-term consequences of all project operations and results.
Building sustainability into projects
Project managers are responsible for supervising the project delivery and support procedures. They will both strive to ensure client satisfaction while inspiring their team to deliver excellence. That is the essence of the role of a project manager.
Meanwhile, a project manager concerned with sustainability will take a more comprehensive approach. They will consider resource use, climate change mitigation, property rights, community engagement, and human rights. It’s a complicated profession that, when done correctly, can have a huge influence on civilizations. The project manager’s objective is to produce value and complete a project on time and within budget, but also to do it ethically and fairly.
Environmental management and responsible resource use have never been more popular. As a result, companies worldwide are seeking methods to cut waste and lessen the environmental effect of their operations. Being environmentally responsible not only helps firms appeal to customers, but it may also assist save costs by reducing resource requirements and minimizing exposure to potential regulatory fines.
When a company implements a “green” mindset into its project management approach, the positive impacts may spread across the organization, resulting in increased efficiency, less waste, and increased employee morale. Here are some ideas for building and carrying out sustainable projects in any industry.
Strategies for Project Sustainability Across Industries
- Start by assessing your current project’s sustainability.
Before taking measures toward increased sustainability, you must first understand where you are now. A sustainability analysis can assist the project manager in identifying the most significant development areas and measuring success as the sustainability project takes shape. First, determine if the concept of sustainability applies to a project or project management technique, and then assess the costs and effort necessary to improve.
- Develop a sustainability strategy
Once the evaluation is complete, the next stage is to develop a strategy that describes the business’s goals for enhancing sustainability, like how the goals will be achieved and what the organization wants to gain from the process. Like a project plan, the strategy should identify the people, roles, or departments that will drive the sustainability effort and the degree of power they will have in establishing project priorities.
Every day, modern organizations face new and growing obstacles. On the other hand, sustainable businesses have proven to be more resilient. But where do you begin? What steps can be taken to take your efforts to the next level? Here are the four critical steps in developing a sustainability strategy.
Crafting a Sustainability Strategy in Four Steps
Step 1: Identify the impact factors
Before developing a sustainability strategy, you must determine which factors are important to your company. Each company is unique based on the following:
- The industry you operate in
- The size of your company
- The location
- Your place in the supply chain
Different aspects will be relevant to your business.
The four pillars of sustainability
To ensure that your sustainability strategy has the greatest potential impact, you must first determine which aspects are most important to you. Companies should undertake a materiality analysis to do this. Here are the four sustainability pillars to consider in the analysis:
Core Aspects of Sustainability
- Environment
- Labour and Human Rights
- Business Ethics
- Sustainable Sourcing
Collecting data
Starting a stakeholder engagement with internal and external stakeholders is an excellent strategy for discovering your impact factors. In addition, conducting a survey or interviews will give you more profound knowledge.
Step 2: Determine the long-term vision and mission
After recognizing the crucial material issues, determine which ones you can genuinely influence. It is now time to develop a long-term purpose and vision. These two steps are critical for good strategic planning. They may give consistency and establish limits for your business and its employees.
The ideal future
A mission statement focuses on your company’s present position and briefly explains its main purpose, focus, and goals. On the other hand, a vision statement summarizes an organization’s goals and the larger influence it hopes to have in the future. As a result, your vision and mission statement must represent your fundamental materials challenges and expand on your materiality assessment results. In addition, your company’s distinct traits must be taken into account. This aspect may assist you in prioritizing the impact elements and creating long-term alignment in your organization.
Step 3: Formulate the sustainability strategy
Finally, in the third step, you can begin designing the real strategy, which is a more immediate translation of your vision and goal. It should include all of the impact elements (identified in step 1) that are relevant to your business. More precisely, you must determine short- and mid-term objectives to realize your long-term vision and purpose (identified in step 2). Breaking down these long-term high-level statements will make each step more concrete and manageable.
Setting goals
The goals should be SMART:
- Specific
- Measurable
- Achievable
- Realistic
- Timely
After you’ve chosen a set of relevant targets, you’ll need to decide what steps your organization will take to reach them. Project outlines and processes must be outlined in detail. It is critical to ensure that your approach promotes both horizontal and vertical cohesion.
- The alignment of multiple departments and sustainability pillars is called horizontal coherence.
- Vertical alignment, on the other hand, refers to the consistency of choices made at the management (group or entity) and operational levels.
Step 4: Implement the sustainability strategy and track success.
The next stage will be to put your thoughts into action. Developing a great plan begins with collecting relative insights and understanding your primary material concerns. Then, by following a step-by-step approach, you can create a framework that will allow you to focus on investment and drive performance while also engaging internal and external stakeholders.
- Adopt a sustainability standard
As interest in project sustainability grows, companies have established guidelines to assist senior leaders and project managers in determining if they are reaching their sustainability objectives. For example, Green Project Management has issued the P5 Standard for Sustainability in Project Management, a set of goals and measurements that businesses may use to drive their efforts.
- Look for sustainability in partners and vendors.
The larger an organization, the greater leverage it has on the firms with whom it does business. So asking vendors and suppliers to raise their sustainability can lower the organization’s environmental footprint and lead to broader changes among the vendors and customers.
- Spread the word
Communication is the key to success in every organizational activity. Begin including your project teams in the process as soon as your sustainability strategy is determined. Solicit input on your sustainability goals and fresh suggestions from staff based on prior efforts. The more engaged your team is in the sustainability project, the more determined they will see it through.
- Be adaptable
One critical component of project sustainability is the capacity to adapt to changes in the organization, technology, and competition. Because these factors might shift a company’s goals while responding to them can help you succeed. This move might also include modifying project criteria or responding quickly to problems to execute projects on schedule and budget.
- Ensure projects are manageable
Projects become sustainable when they are manageable. While you may have larger ambitions, breaking them down into smaller, more manageable tasks might help you with expenses and resource allocation over time. You may also check your ability to implement manageable initiatives, such as having the necessary teams and approval processes. When planning for the future, be sure the organization can support any system or process modifications that a project manager wants to deploy.
- Review scalability
The ability to raise or reduce your resources based on your project’s demands is called scalability. This need frequently occurs when the scope of a project grows greater than intended, necessitating the use of additional tools, funds, people, or other resources to execute it. Ensuring that you can handle changes in scale may aid in developing a long-term sustainability strategy since it provides that the result will still be worth any additional demands.
Why should every project manager prioritize sustainability?
As governments worldwide establish net-zero carbon objectives, project managers are being charged with rethinking work processes to reduce emissions. Everything from planning to procurement to team structures is being re-evaluated to achieve sustainability goals. However, it is important to realize that sustainability covers more than climate change. It entails balancing projects’ environmental, social, economic, and administrative components to fulfill the requirements of present stakeholders without compromising the needs of future generations. Far from being a burden, sustainability provides an opportunity for project professionals to demonstrate their value by connecting with company strategic objectives centered on net zero. By incorporating sustainability into all aspects of their projects, project managers may make a significant difference and increase their visibility to the organization’s leadership.
Final Thoughts
Project Sustainability Management necessitates a more comprehensive strategy. It considers resource utilization, climate change mitigation, property rights, community engagement, and human rights. The project manager’s mission is to provide value and complete a project on time and under budget and do it ethically and fairly. The intertemporal character of sustainable project management contributes to its complexity. As a result, the lifetime of a sustainable project should not end after completion; environmental and social impacts must also be monitored and regulated afterward.
Project managers are in charge of managing the project delivery and support procedures. Both will ensure client satisfaction while inspiring their teams to produce greatness.
Project managers must consequently arm themselves with new indicators, such as ISO, SA, and others, for monitoring and managing these environmental and social issues. In the end, initiatives serve as a tool for effecting change, introducing new goods and services, and shaping society. As a result, sustainability should not be an afterthought but rather one of the primary aims of any project.
Feel free to check out my discussion on this topic with Thomas Walenta in YouTube
For any questions related to your Project Management career, training, and certifications, you can book an obligation free 15 minutes session with me by visiting https://bit.ly/2SbhTOK
You can subscribe to the vCare Project Management YouTube Channel to catch future videos of our Q&A series and certification success stories: https://bit.ly/2YF0wJl
You can subscribe to and follow my podcasts and interviews with Project Management Experts on YouTube at https://bit.ly/2NDY8wd
by Dharam CW2 | Oct 13, 2023 | General
Organizations may stay profitable and competitive using project management practices that help identify process improvements or cost-cutting opportunities. Metrics may assist in discovering areas for improvement, data to focus on, and how to quantify the success and efficacy of a company’s efforts. Knowing more about project management metrics that can assess performance will help one acquire professional skills for any business and advance their career in project management.
Every organization needs to ask,
- “Are we getting the outcomes we want?”
- “Are we accomplishing our project objectives?”
- “Are we meeting the requirements for customer success?”
- “Are we getting the intended return on investment?”
Project Management Metrics May Assist
Success depends on the ability to forecast and meet product and service commitments. With projects becoming more common, it is critical to show additional value to the business using project management strategies, tools, and procedures. Therefore, a metrics program is required. Metrics may assist in identifying significant events and trends, distinguishing between challenges and opportunities, and guiding companies to make wise decisions.
How can we know whether the project management efforts make a difference and contribute to corporate success?
- It has long been known that suitable measuring methods are essential to basic management tasks, including project planning, monitoring, and control, and metrics are present at all stages of project management.
- As project management grows prominence and more firms embrace a project-based management approach, objective and performance-based management highly depend on measurement processes.
- To assist decision-making, project selection, portfolio management, and lead product and process improvement, metrics must be integrated into project life-cycle activities.
- In addition, metrics may be used to assess an organization’s project management maturity.
- Metrics aid in understanding capacities, allowing for developing strategies based on creating and delivering goods and services. They also enable people to recognize significant events and patterns and distinguish between challenges and opportunities.
- Metrics can assist in improved cost and schedule management, decrease risks, increase quality, and guarantee that objectives are met.
Measuring is an end goal in some businesses. Individuals in such businesses who have obtained project management certification and use specific project management tools and processes are the ones who often recognize the significance of project management. At the same time, individuals at the top may only accept this value partially. A metrics practice put in place is one of the best methods for successfully explaining the benefits of project management to top executives.
What are Project Management Metrics
What are Project Management Metrics?
Project management metrics are data sets, algorithms, and calculations that allow businesses to assess the performance of a project. They assist managers and organizations in reviewing how a project progresses, evaluating team productivity, project completion deadlines, and costs, and identifying, reducing, or eliminating risks. Project management metrics are numerical instruments that firms use to build successful strategies, carry out continuous improvement initiatives, and assess employee and customer sentiment.
Benefits of using metrics in project management
Project management metrics are an efficient approach to assessing a project’s progress. Measuring the project’s performance against key parameters helps to understand the management process. These indicators in project management also assist in steering project objectives, allowing teams to assess success and make improvements as needed.
Following and evaluating the right indications can provide the company with critical insights regarding the team’s performance – from both a high-level and individual standpoint. In addition, you’ll be able to identify process bottlenecks and other inefficiencies, which one can subsequently fix, adding to the project assumptions list and enhancing future project performance.
Furthermore, tracking and collecting this sort of data might be useful when the time comes for the project management performance review. Taking responsibility for the team’s work by analyzing project outcomes, identifying inefficiencies, and developing improvement plans sends a strong message to management. It displays that one can be a real leader committed to the business’s success.
Benefits of Using Metrics in Project Management
- Measure team productivity
Relevant metrics in project management can reflect a team’s productivity. For example, the on-time delivery (OTD) rate or service level agreement (SLA) rate might be used to calculate the project’s ROI.
- Optimize team performance
While it is critical to maintain the team’s performance, forward-thinking management seeks development opportunities. Relevant project metrics enable one to broaden their understanding of project-related aspects. Project performance measurement reduces uncertainty and allows individuals to make better, more informed decisions.
- Track ongoing progress
Management performance metrics also track a project’s progress over time. These metrics are critical to discover obstacles early and help adjust the track as needed.
Project Management Metrics: How to Measure and Track Success
Relevant project management metrics will help enhance our understanding by eliminating uncertainty and making well-informed decisions.
Metrics prove value
Cost-related project management indicators may demonstrate the value of a team—for example, a rate of on-time delivery or a rate of satisfying SLA. Return on Investment (ROI) is a popular statistic for demonstrating this value. If a department fails to generate or contribute to a firm’s measurable objectives, a smart business would dissolve the department and redirect resources to another area that provides results.
How to choose the Metrics
Metrics improve performance
While demonstrating value is crucial, forward-thinking management prioritizes performance improvement. Relevant metrics help you have a better grasp of project management. This aspect reduces ambiguity, allowing all parties involved to make informed decisions. For example, assume that the given slack time is causing the completion of the following task to be delayed. You can adjust the slack time to keep the project deadline.
How to choose the metrics?
Each business or project requires metrics specific to its purpose or aim. Metrics are determined in three steps:
- Understand the project’s objective or goal.
- Determine which crucial success elements must be met to succeed and reach the objective.
- Consider how you will measure the achievement of each key success factor for the project or program.
What makes a successful project?
What makes a successful project?
Before starting any project, you and your team should know what constitutes a successful project. After all, you want to avoid being known for a famous failed project. So what makes a project successful? First, you should establish a set of success criteria for your project, including the following:
- Delivers on time: Completing a project on schedule and under budget is one measure of success, especially for external parties, such as clients.
- Stays within budget: A budget is in place for all initiatives. You will have succeeded if you can finish yours without incurring more fees and expenses.
- Achieves its objectives: If your project was completed and met its objectives — as stated at the outset — that’s a huge accomplishment.
- Gets positive feedback: Assessing a project’s internal and external success is simple. But how did it fare? If stakeholders and clients offer positive feedback, the project will be considered a success.
Key Project management metrics
Project management metrics may be established based on the purpose and complexity of the project. However, the ten key project metrics listed below often cover the most important measurements:
Key Project management metrics
- Productivity
This indicator examines a company’s total skills — how well it uses its resources. Productivity demonstrates the connection between inputs and outcomes. For example, how much do you get out of a project after your efforts? The optimal productivity outcome is to produce more with less.
Productivity = Units of Input/Units of Output
- Gross Profit Margin
Numbers are more powerful than words. Indicators directly related to the bottom line indicate success or failure faster than other metrics.
The larger the profit margin, the better the business. Any program or effort done should add to a company’s financial profit. The margin is the proportion of each dollar generated after expenses are deducted.
Gross Profit Margin = (Total Profit-Total Costs)/100
- Return on Investment (ROI)
Return on investment especially considers the dollar amount earned for the amount spent on a project. This metric is a financial calculation similar to gross margin. However, instead of focusing on a total profit, it considers the specific benefit of the project divided by the costs.
To use this metric, a dollar value must be assigned to each unit of data to calculate the net benefits, which may include:
- Contribution to profit
- Cost savings
- Increased output
Costs may include resources, labor, training, and overhead.
ROI = (Net Benefits/Costs) x 100
- Earned Value
Earned value provides strategic guidance by displaying how much you have derived from the money invested in a project to date. It compares the value of work performed by a given date to the project’s approved budget.
Earned value is often called the Budgeted Cost of Work Performed (BCWP). This statistic serves as a reality check during the project’s execution.
Earned Value (EV) = % of Completed Work / Budget at Completion (BAC)
- Customer Satisfaction
A customer satisfaction score is a quality indicator for your service or product—the findings of a customer survey influence this metric. In addition, the product or service should perform as intended and meet genuine client demands.
Each organization may create a unique score by weighing each component depending on its value. Customer survey results, money earned from clients, repeat or lost clients, and complaints are examples of variables.
The Customer Satisfaction Index (CSI) is the most extensively used metric for customer satisfaction. Another technique for measuring customer satisfaction is the Net Promoter Score (NPS). NPS measures customer loyalty by determining the chance of a consumer suggesting a product or service.
Customer Satisfaction Score = (Total Survey Point Score / Total Questions) x 100
- Employee Satisfaction Score
Survey data determines employee satisfaction in the same way that customer satisfaction is. So why should workers be included while evaluating project management? The answer is straightforward: employee morale is directly related to project performance.
In the end, a satisfied employee does better work and more efficiently. In addition, the high costs of employee turnover for a firm — which may range from 50% to 200% of an employee’s salary — should be motivation enough to focus on the people closest to the project.
The Gallup Q12 Employee Engagement Survey is a well-known data collection tool. An ESI procedure yields an index score.
Employee Satisfaction Score = (Total Survey Point Score / Total Questions) x 100
- Actual Cost
The Actual cost is a simple statistic that displays how much money is spent on a project rather than simply an estimate. This cost is calculated by adding all the expenses for a specific project across the timeline.
Actual Cost (AC) = Total Costs per Time Period x Time Period
- Cost Variance
Cost variance describes the difference between the intended budget and actual expenses during a given time period. Is the estimate higher or lower than the actual costs?
- A project is over budgetif the cost variance is negative.
- A project is under budgetif the cost variance is positive(a standard measure of success).
Cost Variance (CV) = Budgeted Cost of Work – Actual Cost of Work
- Schedule Variance
The schedule variance examines both budgeted and scheduled work. Is the project running ahead of or behind schedule?
The schedule variance is the difference between work scheduled and work accomplished, calculated as the budgeted cost of work executed minus the budgeted cost of work scheduled. A negative schedule variance indicates that the project is running late.
Schedule Variance (SV) = Budgeted Cost of Work Performed – Budgeted Cost of Work Scheduled
- Cost Performance
Cost performance is a cost efficiency metric. Divide the value of the work performed (earned value) by the actual costs incurred to get the earned value. Forecasting cost performance provides for more precise budget estimates.
Cost Performance Index (CPI) = Earned Value / Actual Costs
Implementing Project Metrics
Once project metrics have been established to meet the company’s goals, it’s time to apply them. First, interact with users to help them understand the process, its value, and how analytics may enhance projects. Then, provide specific examples, such as “the dashboard will indicate where we need documentation, so we may prevent delays by gathering the necessary information.”
Create a project management metrics strategy with criteria everyone can understand to help you get support. Explain the significant indicators you’ll be measuring, how you’ll track them, and the goals you intend to achieve. The strategy should then be put into action. Understand that project metrics should lead to action; else, they are worthless. As you discover unusable metrics, revise the plan.
Final Thoughts
Project management metrics are critical to the success of any organization. They track the progress of initiatives, assist managers in defining success, and verify that the team is heading in the right direction.
It is complicated to analyze and evaluate a project’s development without appropriate metrics in project management. With precise, trackable KPIs, the company can assess project progress and identify when it’s time to change strategy or where the team is experiencing difficulty. If the company does not make the essential changes, it may face serious obstacles and lead to failure. As a result, measuring important project management metrics is vital to the company’s success.
Feel free to check out my discussion on this topic with Justin Buckwalter in YouTube
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by Dharam CW2 | Sep 29, 2023 | General
Project management is in great demand by many businesses, as are the project managers. Project management is widely used in today’s economy, regardless of the business. Why?
Today’s organizations confront tremendous competition. They must address global issues and respond to internal/external concerns in parallel. In response to obstacles, businesses require a disciplined strategy for planning, organizing, controlling, and managing their resources (including internal skills) to deliver outcomes on time. And these outcomes should be in line with goals and demands. Project managers with strong project management abilities are well-equipped to take on these initiatives. These initiatives may have varying levels of complexity. Therefore, if you are a project manager or want to start a career as a project professional and be marketable amongst other professionals to survive in this competitive environment, this article will provide a good overview.
Transforming your project management career
A project management career might be an excellent choice if you want to increase your income and professional status. Project management roles are often active and interesting, with constant new challenges and possibilities. In contrast, talented project managers are in high demand throughout the corporate sector, as many qualified candidates are looking for these opportunities.
Understanding Project Management
One of the biggest misconceptions regarding the project management profession is that it is fundamentally the same as a more traditional management position. While project managers must be great leaders, their primary responsibility is to manage projects, not people.
Unlike departmental managers, project managers are not a part of the typical supervisory structure used by most businesses. Instead, they function as a type of free agent – a project management profession entails coordinating the work of many individuals and divisions to achieve a certain assignment. Throughout a project, the project manager will communicate with individual contributors at all levels of the organization in connection to various deliverables.
Duties of a Project Manager
Project Manager Duties/Tasks
- Determines relevant goods or services to define project scope, requirements, and deliverables with clients or customers
- Develops, adjusts, or contributes to project plans
- Implements project strategies to achieve goals
- Project activities are coordinated and integrated
- Manages, Directs, or Oversees project resources
- Monitors project activity and resources to reduce risk
- Quality assurance methods are implemented or maintained
- When issues arise, the project manager makes changes, fixes them, or takes remedial action
- Presents or briefs on all aspects of the project
- Participates in the project phase, milestone, and outcome reviews
- Determines the requirements or processes for project documentation
- Creates and implements a product release strategy
Qualities that make a Project Manager in High Demand
Qualities that make a Project Manager in high demand
Effective project management may require the following qualities to become an effective project manager:
- Effective communication skills
A good communicator is one of the qualities of a successful manager since it allows them to interact with people at all levels. The project manager must clearly describe the project goals, duties, responsibilities, expectations, and feedback for each team member to obtain the project goal.
- Strong leadership skills
Effective project management requires strong leadership abilities, such as encouraging and driving the team to maximum performance to achieve their objectives.
- Good decision-maker
An effective project manager must be able to make decisions since they will always be required.
- Technical expertise
Because project management software and other associated programs are vital in achieving project goals, a good project manager must have strong technical expertise to understand technological challenges. In addition, knowledge of theory and technology may substantially assist managers in adopting strategic moves when necessary.
- Inspires a shared vision
An effective project manager can communicate the vision to the team members. A visionary can guide employees in the proper direction while effectively adapting to changes. In addition, they excel in empowering people to experience their vision for themselves.
- Team-building skills
A team must work together, or the project will face numerous relational issues that might threaten its success. Project managers must understand how to offer each of them the attention they require by emphasizing their positive characteristics.
- Handles the pressure
As the project progresses, specific events could hinder its pace and put the project manager’s patience to the test. Therefore, project managers must always remain composed and grounded to avoid losing themselves and negatively affecting their connection with the team.
- Good negotiation skills
The capacity to negotiate is one of the abilities required for efficient project management. Project managers must have strong negotiation skills to resolve disputes resulting from differences of opinion and keep the team functioning together.
- Empathetic
An empathetic leader demonstrates to their followers’ things like compassion, empathy, and gratitude for others’ assistance. Understanding the project’s and its stakeholders’ demands is a necessary step.
- Competence
A good manager can start new initiatives, manage obstacles, and knows what he is doing.
An effective project manager must possess the majority of these qualities to manage the project successfully, along with a professional certification. Professional certificates can add value to their career and aid in success in a competitive environment.
Project Management Certification
A project management certification is a certification that verifies an individual’s project management knowledge, skills, and practical expertise. Certifications like PMP®, PgMP®, PfMP®, and other advanced certifications can aid the professional’s knowledge and adds value to their career.
According to the August 2023 PMI Fact File Stats, there are 1,465,873 PMP®, 4,847 PgMP®, and 1,538 PfMP® active certified professionals globally. Thus, completing those training programs and earning a project management certification from a globally recognized standard organization such as the PMI might improve the career, including staying current with a constantly evolving field, keeping up with the latest technology and practices, and earning a better project manager salary.
A career in project management: Facts and Figures
Project management has become a highly sought-after career path in today’s agile environment. According to the Project management – Job Growth and Talent gap, 2017 – 2027 report,
Project Management – Job Growth and Talent Gap | PMI
- A growing disparity exists between the demand for experienced PMPs and their suppliers worldwide. As a result, firms and organizations are searching for qualified project management professionals. Moreover, it allows one to tailor themselves to their needs.
- By 2027, there will be a demand for 87.7 million PMP positions. Because of increased demand and high attrition, there will be a huge job opportunity for a project management role in the coming future in various sectors, including manufacturing and construction, information services and publishing, finance and insurance, management and professional services, utilities, and others.
- Apart from the fact that there will be a lot of employment for PM positions in the future, it’s also encouraging to know that PM roles will be financially rewarding. According to the report, in the United States in 2017, earnings of project management-oriented professionals in projectized sectors were 82 percent more on average than the salaries of non-project-oriented professionals.
Challenges Faced by the Project Managers
A project manager must handle challenging projects smoothly and deliver positive outcomes. It may appear that being a project manager is a simple and well-paid profession. However, a project manager must work hard and face obstacles daily to balance all parts of a complicated project.
Challenges Faced by Project Managers
As a result, a project manager must be skilled in various areas, including communication, decision-making, delegating, and risk-taking, to mention a few. In addition, project managers are constantly required to manage tasks, resources, time, and money in addition to managing projects. Here are some of the challenges that today’s project manager’s face:
- Scope creep
Scope creep expands a project’s scope beyond its intended objective or aims. It usually occurs when project stakeholders request adjustments. Any change to a project’s strategy can cause confusion, raise the cost of resources, and make meeting deadlines difficult.
- Poor communication
Strong communication is one of the keys to effectively completing a project. A project manager can successfully provide orders, acquire information, and update stakeholders if they have strong written and verbal communication skills. Otherwise, their team might need to be more organized, causing delays.
- Unclear goals
Projects can only be effective if the team works toward well-defined and quantifiable goals. Ideally, every team member is aware of each project objective and the specific expectations of each stakeholder. Otherwise, they may spend time and resources attempting to do something that does not give the necessary benefit.
- Poor budgeting
Smart financial planning and cost management are required to ensure that funds are used wisely. Poor budgeting, on the other hand, may result in unfavorable effects. Without a solid understanding of financial concerns, the team may face cost overruns, aggravating stakeholders and preventing the project from being completed successfully.
- Insufficient risk analysis
Risk analysis is forecasting probable elements that might threaten a project’s success. Although it is an important aspect of the project life cycle, the process is vulnerable to specific hazards. For example, rushing the analysis might result in oversights that fail to anticipate important difficulties. As a result, flaws in the project design, budgetary concerns, or unexpected variables may arise.
- Lack of accountability
Accountability is accepting responsibility for one’s actions and the consequences of those acts, especially when mistakes are made. As a result, responsible people are willing to confront the consequences of their actions and attempt to overcome the resulting difficulties. However, when leaders and team members are not accountable, they can interfere with development in many ways. One way is to undermine team morale, which may withstand the repercussions of a single person’s errors. The other is by decreasing production when project resources are diverted to determine the root cause of a problem.
- Unrealistic deadlines
An unrealistic deadline is impossible or unreasonable to accomplish, given the specifications and needs of the project. When a team faces unreasonable deadlines, they are obliged to compress their operations so that the quality of their work decreases. As a result, the project’s final output will likely fall short of client expectations.
- Uncertainty
Uncertainty occurs when stakeholders, including team members, need clarification about any part of the project they are working on. For example, they may be concerned about the team’s ability to accomplish goals, the project’s possible impact when finished, or the usage of project resources. When uncertainty occurs, it may damage engaged people and lead to poor project outcomes.
Ways to make yourself more marketable as a Project Manager
Making oneself necessary to a current employer or alluring to a prospective one is the key to being (and remaining) marketable. Therefore, it is a commitment to constantly broaden the skills and knowledge to remain current, competitive, and well-positioned to compete for employment in various market scenarios.
Ways to make yourself more marketable as a Project Manager
Here are some suggestions to boost your job prospects at all phases of the economic cycle.
- Upgrade your skills
Keeping your skills fresh, current, and relevant is the best way to stay marketable. Align your skillset with your company’s plans and those of potential employers, and keep up-to-date by attending workshops and conferences to expand and improve your skillset.
Identify gaps that need addressing to position yourself as a highly valuable employee. Focusing on developing your transferable skills (in leadership, communication, or technology, for example) is a smart investment in diversifying and upgrading your career.
- Expand your learning
Continuous learning demonstrates your dedication to growth. Remember that you must stay current on the industry’s best practices and technologies, even if you are not using this information in your current role. Improving your knowledge and qualifications is a vital strategy to boost your worth to a current or future company.
In-house training, distance learning, and online courses may all help you develop new skills and information. Online seminars and professional journals are also excellent ways to stay current in your field, making it simpler to transition into a new job.
- Rework your CV
Refresh your CV with recent accomplishments and current skills so you can take advantage of opportunities as they emerge. Update your CV with concrete examples of your achievements, such as improving business procedures, contributing to the bottom line, or attending key conferences or seminars. Keeping a record of your accomplishments is an excellent reminder of the value you provide to your present position.
- Be flexible
In today’s constantly changing work market, having an open mind and staying flexible about your professional choices will offer a world of extra professional prospects. However, you may need to reassess your expectations regarding industry, compensation, and employment type (permanent, contract, or temporary) to keep your alternatives open and avoid restricting your employability.
- Expand your network
One of the essential job search and career development tools you have is your network of connections. Attend chapter events, networking events, activities, and conferences whenever possible. Networking helps to keep you top of mind when possibilities occur within or outside your firm, as well as creating your reputation as a well-connected and appreciated professional.
- Stay Informed
Anticipating what talents businesses will want now and in the future is crucial. Keep current with essential trade publications, industry studies, and job postings. Staying up to date on advancements and opportunities offers you a good indication of the types of talents that are now in demand, as well as those that are likely to be relevant in the future and which are helping you to plan for future career opportunities.
- Establish a personal brand
Remember that you are ultimately marketing yourself to a potential employer, so maintain consistency in your brand. Any changes to your CV should be reflected on your LinkedIn page, and you should consider getting a professional photo taken to put in your profile.
- Showcase your work
Maintain samples of your best work, as long as they are not the intellectual property of your current employer, and create an online portfolio. This simple method demonstrates your appreciation for your work and its quality. Make sure to include the portfolio in your LinkedIn profile so future employers can see your capabilities.
- Get a mentor
Discuss obtaining a mentor with your management or someone in a career or profession you might be interested in later. Find out what helped them get to where they want to go or what they would be looking for in a comparable job when recruiting. For example, you need to focus on a certain skill set or achievement ahead of time. In that case, you can offer yourself a more suitable candidate for new employment.
Final Thoughts
The project manager’s role is critical since it determines whether a project succeeds or fails. Therefore, being the project manager places a more significant focus on essential abilities and experience; as a result, the project manager is expected to have the necessary talents and desire to perform the research required to stay current and competitive.
But not all project managers are equal. For many of us, the problem is figuring out how to stand out in a market where everyone talks about having a brand. Also, how do you differentiate yourself in a setting where selling your value to the project is frequently more essential than getting things done on the project?
Here are a few suggestions to assist you in establishing your presence as an essential component of your organization’s success and put you in line to be recognized for your achievements.
- Make sure you communicate with everyone in the organization.
- Share your thoughts inside your business and with the project management community.
- Encourage yourself to keep growing.
Feel free to check out my discussion on this topic with Thomas Walenta in YouTube
For any questions related to your Project Management career, training, and certifications, you can book an obligation free 15 minutes session with me by visiting https://bit.ly/2SbhTOK
You can subscribe to the vCare Project Management YouTube Channel to catch future videos of our Q&A series and certification success stories: https://bit.ly/2YF0wJl
You can subscribe to and follow my podcasts and interviews with Project Management Experts on YouTube at https://bit.ly/2NDY8wd
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