Project KPIs: How To Set & Track Them For Success

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From the beginning to the end of a project, many things can go wrong and jeopardize the entire venture. To avoid project stalling or failure and to stay on track, it’s essential to create and follow a set of key performance indicators (KPIs).

A KPI is a measurement used to evaluate how well teams or individuals achieve specific project goals. But what does that actually mean, and how do you choose the right indicator for your projects? This article will cover some great examples of KPIs and how to implement them in your next project. With the right KPIs in place, you’ll be able to successfully measure the health of your project and avoid any pitfalls along the way.

What is a Key Performance Indicator (KPI)?

A KPI is a type of performance measurement. KPIs evaluate how well teams or individuals are achieving specific goals. Your KPIs can be financial or non-financial, and they are often used to track progress toward important business objectives.

Make sure you distinguish KPIs from their closely related cousin, KPM (Key Performance Metric). While both activities are within the project management umbrella, they focus on two different areas.

Key Performance Metrics (KPMs) are the quantifiable performance measurements used to determine whether Key Performance Indicators (KPIs) have been met. KPMs are often leading indicators that help predict whether a company will achieve its KPIs.

For example, let’s say the KPI of a project is to stay within budget. The KPMs for this KPI would be to track the project spending regularly, set up alerts when the project is approaching the budget limit, and implement processes to prevent overspending. The KPMs are the step-by-step actions that make up the KIP. 

So, the KPI = the “big goal,” and the KPM = metrics you track to get there. So now, let’s go over some of the best “big goals” to set up for your projects.

How to Choose the Right KPIs For Your Project

There are many project types out there, and luckily there are just as many KPIs to go along with them. While you can choose the wrong KPI for your project (i.e., track budget when you need to track customer satisfaction), there are some ways to steer away from the wrong project KPI choice and toward the correct one. Here are five general principles you can follow: 

1. Keep it simple

When creating KPIs, less is more. You want to be able to quickly and easily understand your KPIs without having to wade through a lot of data.

2. Make it specific

Your KPIs should be specific to your project goals. This will help you track progress and identify areas that need improvement.

3. Make it actionable

Your KPIs should be actionable, meaning they should provide insights that can be used to make decisions and improve performance.

4. Make it relevant

Your KPIs should be relevant to your business objectives. This will help ensure that your KPIs are aligned with your organization’s overall strategy.

5. Make it measurable

Your KPIs should be measurable, so you can track progress and identify areas of improvement.

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Can You Have More Than a Single KPI In a Project?

Yes, you can (and should) have more than one KPI in a project. Multiple KPIs can help provide a complete picture of your project’s health.

For example, let’s say you’re managing a website redesign project. Your primary goal is to launch the new website on time and within budget. But there are other important factors to consider, such as customer satisfaction and website traffic. So, in addition to tracking budget and timeline, you’ll also want to track customer satisfaction levels and website traffic before and after launch.

Adding more than one KPI to your project will give you a more well-rounded view of your project’s success (or lack thereof). And if one KPI isn’t performing well, you can use the other KPIs to help you troubleshoot and find a solution.

How To Implement KPIs Into Your Project

Now that we’ve gone over some general principles for choosing the right KPI for your project let’s talk about how to implement KPIs into your project. Here are some tips:

Define your KPIs early on in the project

Defining your KPIs early on will help ensure they align with your project goals and business objectives. It will also help you keep your KPIs the same midway through the project, which can throw off your entire data collection process.

Choose the right tools for tracking your KPIs

There are a variety of tools you can use to track your KPIs. Choose the right KPI dashboards and monitoring tools that best fit your needs and the needs of your team.

Create a system for tracking and reporting KPIs

Creating a tracking and reporting KPIs system will help you stay organized and on track. This system should include a way to track KPI data, as well as a way to report on KPI progress. A good tracking and reporting system can be a project management platform like Hive. Hive offers customizable project management templates and a Goals application to track and report KPIs.

Communicate your KPIs to all project stakeholders

Communicating your KPIs to all project stakeholders will help ensure that everyone is on the same page and working toward the same goal. This step can also be completed with a robust project management platform. Hive also has a chat functionality, which lets real-time communication happen at any point in the project workflow. 

Review your KPIs regularly

Reviewing your KPIs regularly will help you identify areas of improvement and make necessary adjustments to improve performance.

Examples of Project KPIs

Many different types of KPIs can be used to measure the success of a project. For example, let’s say you are launching a new website for your clothing business. One of the essential marketing KPIs of the project is to increase traffic to your site, while one of the operational KPIs is order processing time. Both of these measurements are great indicators of how successful a given project may be.

Since we now know what a KPI is and that we can have more than 1 in a project at a time, below are a few examples of KPIs that you can use to track the performance of your projects.

Some common examples of project KPIs can be:

1. Financial KPIs

  • Revenue
  • Profit margin
  • Cost per unit
  • Return on investment (ROI)
  • Earnings before interest and taxes (EBIT)

2. Customer KPIs

3. Employee KPIs

  • Employee turnover rate
  • Productivity per employee
  • Training and development costs per employee

4. Operational KPIs

  • Order processing time
  • Inventory turnover ratio
  • Cycle time
  • Lead time

5. Marketing KPIs

  • Cost per lead (CPL)
  • Cost per acquisition (CPA)
  • Website Traffic
  • Conversion rate

6. Project-Specific KPIs

Use Hive to track your Project KPIs

Are you ready to start setting and tracking your project KPIs? You’re in luck — Hive’s newest (and most exciting) feature is Goals. Hive Goals allows you identify key performance metrics and set goals that correspond with your desired outcomes. With the option to link Goals to projects themselves, you can easily visualize progress and keep everyone aligned on your project’s status in one centralized dashboard.

You can also:

  • Create one, ten, twenty, or more goals for your team, so everyone understands what they’re contributing to.
  • Centralize and automate your goal tracking and reporting.
  • Pull data from other systems into Hive to streamline operations and reporting.
  • Share your goal or goals, assign the goal to relevant teammates, track activity, and give yourselves a deadline.
  • Understand how your team and organization are pacing towards an individual goal or a set of goals.
  • Color-coded designations allow an easy understanding of “on-track” items.
  • When it’s time to review progress, accomplishments, and achievements, easily export all relevant information.

Want to get started? Start your free trial of Hive Goals today!

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