PROJECT MANAGEMENT METRICS, KPIs, AND DASHBOARDS A Guide to Measuring and Monitoring Project Performance
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1 PROJECT MANAGEMENT METRICS, KPIs, AND DASHBOARDS A Guide to Measuring and Monitoring Project Performance Harold Kerzner, Ph.D. Sr. Executive Director for Project Management The International Institute for Learning WILEY JOHN WILEY & SONS, INC. INTERNATIONAL Institute for Learning, Inc.
2 CONTENTS PREFACE THE CHANGING LANDSCAPE FOR PROJECT MANAGEMENT IX The Definition of Success Must Include a "Value" Component 26 Multiple Components for Success 27 The Future CONCLUSIONS INTRODUCTION EXECUTIVE VIEW OF PROJECT MANAGEMENT COMPLEX PROJECTS 4 Comparing Traditional and Nontraditional Projects 5 Defining Complexity 8 Tradeoffs 9 Skill Set 10 Governance 10 Decision Making 11 Fluid Methodologies GLOBAL PROJECT MANAGEMENT PROJECT MANAGEMENT METHODOLOGIES AND FRAMEWORKS 13 Light Methodologies 16 Heavy Methodologies 16 Frameworks THE NEED FOR EFFECTIVE GOVERNANCE ENGAGEMENT PROJECT MANAGEMENT OTHER DEVELOPMENTS IN PROJECT MANAGEMENT A NEW LOOK AT DEFINING PROJECT SUCCESS 23 Success Is Measured by the Triple Constraints 23 Customer Satisfaction Must Be Considered As Well 23 Other (or Secondary) Factors Must Be Considered As Well 24 Success Must Include a Business Component 24 Prioritization of Success Constraints May Be Necessary THE DRIVING FORCES FOR BETTER METRICS 29 INTRODUCTION 29 STAKEHOLDER RELATIONS MANAGEMENT 30 PROJECT AUDITS AND THE PMO 40 INTRODUCTION TO SCOPE CREEP 41 Defining Scope Creep 42 Scope Creep Dependencies 44 Causes of Scope Creep 45 The Need for Business Knowledge 46 The Business Side of Scope Creep 47 PROJECT HEALTH CHECKS 48 Understanding Project Health Checks 49 Who Performs the Health Check? 52 Life Cycle Phases 52 MANAGING DISTRESSED PROJECTS 53 "Root" Causes of Failure 54 The Definition of Failure 56 Early Warning Signs of Trouble 56 Selecting the Recovery Project Manager (RPM) 58 Recovery Life Cycle Phases 59 The Understanding Phase 59 The Audit Phase 60 The Tradeoff Phase 62 The Negotiation Phase 64 The Restart Phase 64 The Execution Phase 65
3 VI CONTENTS METRICS 67 INTRODUCTION 67 PROJECT MANAGEMENT METRICS: THE EARLY YEARS 67 PROJECT MANAGMENT METRICS: CURRENT VIEW 71 UNDERSTANDING METRICS 71 CAUSES FOR LACK OF SUPPORT FOR METRICS MANAGEMENT 74 CHARACTERISTICS OF A METRIC 75 METRIC CATAGORIES AND TYPES 77 SELECTING THE METRICS 79 METRICS AND INFORMATION SYSTEMS 82 CRITICAL SUCCESS FACTORS 82 METRICS AND THE PMO 85 CHURCHILL DOWNS INCORPORATED'S PROJECT PERFORMANCE MEASUREMENT APPROACHES 89 Toll Gates (Project Management-Related Progress and Performance Reporting) 90 KEY PERFORMANCE INDICATORS 97 INTRODUCTION 97 THE NEED FOR KPIs 98 USING THE KPIs 101 THE ANATOMY OF A KPI 102 KPI CHARACTERISTICS 103 Accountability 105 Empowered 105 Timely 105 Trigger Points 105 Easy to Understand 106 Accurate ' 106 Relevant 107 Seven Strategies for Selecting Relevant Key Performance Indicators 107 Putting the R in KPI 108 Take First Prize 111 CATAGORIES OF KPIs 111 KPI SELECTION 112 KPI MEASUREMENT 117 KPI INTERDEPENDENCES 119 KPIs AND TRAINING 120 KPI TARGETS 121 KPI FAILURES 123 BRIGHTPOINT CONSULTING, INC. DASHBOARD DESIGN: KEY PERFORMANCE INDICATORS AND METRICS 124 Introduction R it > b Metrics and Key Performance Indicators 125 Scorecards, Dashboards, and Reports 126 Gathering KPI and Metric Requirements for a ' Dashboard 126 Interviewing Business Users 127 Putting It All Together The KPI Wheel 128 Start Anywhere, but Go Everywhere 129 Wheels Generate Other Wheels 130 A Word about Gathering Requirements and Business Users 131 Wrapping It All Up 131 VALUE-DRIVEN PROJECT MANAGEMENT METRICS 133 INTRODUCTION 133 VALUE OVER THE YEARS 135 VALUES AND LEADERSHIP 136 COMBINING SUCCESS AND VALUE 139 RECOGNIZING THE NEED FOR VALUE METRICS 142 THE NEED FOR EFFECTIVE MEASUREMENT TECHNIQUES 145 CUSTOMER/STAKEHOLDER IMPACT ON VALUE METRICS 151 CUSTOMER VALUE MANAGEMENT (CVM) 152 THE RELATIONSHIP BETWEEN PROJECT MANAGEMENT AND VALUE 155 BACKGROUND TO METRICS 160 Redefining Success 161 The Growth in the Use of Metrics 163 SELECTING THE RIGHT METRICS 166 THE FAILURE OF TRADITIONAL METRICS AND KPIS 170 THE NEED FOR VALUE METRICS 170 CREATING A VALUE METRIC 171 INDUSTRY EXAMPLES OF VALUE METRICS 177 USE OF CRISIS DASHBOARDS FOR OUT-OF-RANGE VALUE ATTRIBUTES 182 ESTABLISHING A METRICS MANAGEMENT PROGRAM 183 USING VALUE METRICS FOR FORECASTING 185 METRICS AND JOB DECRIPTIONS 187 GRAPHICAL REPRESENTATION OF METRICS 187 DASHBOARDS INTRODUCTION 197 TRAFFIC LIGHT DASHBOARD REPORTING DASHBOARDS AND SCORECARDS 201 Dashboards 202 Scorecards 202 Summary
4 CONTENTS VII 6.3 BENEFITS OF DASHBOARDS RULES FOR DASHBOARDS BITWORK, INC.: TEN QUESTIONS TO ASK BEFORE IMPLEMENTING A DASHBOARD OR REPORTING SYSTEM What Are Your Needs? What Do You Have in Place Already? What Is Involved in Integration? How Long Does Installation Take? How Easy Is the System to Use? Who Will Use the System? Can You Get Customizations? What's Involved in Operations and Maintenance? What Does the System Cost? : How Long Will It Last? BRIGHTPOINT CONSULTING, INC.: DESIGNING EXECUTIVE DASHBOARDS 209 Introduction 209 Dashboard Design Goals 210 Defining Key Performance Indicators 210 Defining Supporting Analytics 210 Choosing the Correct KPI Visualization Components 211 Supporting Analytics 213 Validating Your Design ALL THAT GLITTERS IS NOT GOLD DASHBOARD DESIGN TIPS PURESHARE, INC. 240 PureShare White Paper #1: Metric Dashboard Design 241 White Paper #2 Pro-Active Metrics Management LOGIXML, INC.: DASHBOARD BEST PRACTICES 262 Executive Summary 262 Introduction What's New about Dashboards? 263 How Modern Is the Modern Dashboard? 264 The Dashboard versus the Spreadsheet 264 Designing the Dashboard 266 The Business-Driven Dashboard 267 The Implications for the IT Provider 268 Implementing the Dashboard 268 Organizational Challenges 269 Common Pitfalls 270 Justifying the Dashboard 271 Return on Investment 271 Ensuring Service Level Agreements 272 Conclusion A SIMPLE TEMPLATE SUMMARY AND CONCLUSIONS 273 The Importance of Design to Information Dashboards 273 The Rules for Color Usage on Your Dashboard 276 The Rules for Graphic Design of Your Dashboard 278 The Rules for Placing the Dashboard in Front of Your Users The Key to User Adoption 279 The Rules for Accuracy of Information on Your Dashboard 280 DASHBOARD APPLICATIONS INTRODUCTION DASHBOARDS IN ACTION: VENTYX, AN ABB COMPANY DASHBOARDS IN ACTION: JOHNSON CONTROLS, INC DASHBOARDS IN ACTION: COMPUTER ASSOCIATES, INC. 288 Introduction 288 Project Operational Alert Dashboard 290 Project Operational Alerts Drill Down 292 Project Listing Dashboard 292 Resource Planning Dashboard 295 Resource Planning Drill Down DASHBOARDS IN ACTION: PIEMATRIX, INC. 295 PIEmatrix Overview 298 PIEmatrix Executive Dashboard 299 Executive Dashboard and To Do Where Does All This Data Come From? 310 Project Governing and Executing the Project in a Visual and Friendly Way 313 Project Planning the Project 316 Project Breaking Down Silos 324 Authoring Where the Best Practice Content Comes From 324 From Authoring Back to the Executive Dashboard DASHBOARDS IN ACTION: INTERNATIONAL INSTITUTE FOR LEARNING DASHBOARDS IN ACTION: WESTFIELD INSURANCE DASHBOARDS IN ACTION: MAHINDRA SATYAM 333 MEASUREMENT-DRIVEN PROJECT MANAGEMENT INTRODUCTION MEASUREMENT CONCEPTS 340
5 VIII CONTENTS If It Matters, It Is Detectable 340 If It Is Detectable, It Can Be Measured 340 If It Can Be Measured, It Can Be Managed 340 It Has Probably Been Done Before 341 There Is More Available Data Than You Think 341 You Don't Need As Much Data As You Think 341 What Gets Measured, Gets Done 341 You Have to Think Differently Than Most People DEFINITIONS 342 Information Requirement 342 Entity 342 Attribute 342 Process 342 Measurement 343 Uncertainty 343 Accuracy 345 Precision 345 Measure 345 Indicator 345 Information Solution MEASUREMENT PROCESS 346 Preliminary Research 346 Case Study: Customer Loyalty Project 346 Identify Information Requirements 347 Case Study: Customer Loyalty Project 349 Analyze Information Requirements 351 Case Study: Customer Loyalty Project 352 Case Study: Customer Loyalty Project 353 Create Indicator 353 Case Study: Customer Loyalty Project 354 Integrate Measurement into Project Processes ADDITIONAL INFORMATION ON MEASUREMENT CATEGORIES FINAL COMMENTS 366 INDEX 367
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