A variety of factors can lead to failure. For example, budget overruns, delays, equipment delivery issues, changes in project scope, etc. If KPIs are not monitored, the risk of failure increases significantly.
When used correctly, key performance indicators help monitor the status of a project and identify emerging problems. However, different KPIs are selected for different tasks. The main goal is to select the optimal criteria for evaluating results. Moreover, it is better to establish them before the actual implementation of the project.
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The most significant block of project advertising data package manager KPIs is related to budget management. These metrics are calculated differently for external contractors and internal teams. In the first case, they focus on acts and payments, and in the second, the actual number of hours worked is taken into account in comparison with the planned total for the entire project. To unify all data, the team's hours of work are multiplied by the cost of an hour in monetary terms.
Budget variance. This indicator reflects the difference between the actual project costs and the projected budget. It is monitored monthly. The budget is managed, among other things, by key expense items.
Planned Value (PV). This is an estimate of planned expenses as of the current date. The indicator is expressed in the amount of money or hours.
Earned Value (EV) is the product of the project completion percentage and the planned budget for the entire project.
Actual Costs (AC) - This is an indicator of the actual costs of performing work as of the current date.
Cost Variance (CV). This metric measures how much actual costs are higher or lower than planned for the project. It is calculated as the difference between earned value and actual costs:
CV = EV - AC
Schedule variance (SV) - Measures the difference between the actual and planned amount of work in a project:
SV = EV - PV
This metric shows how far ahead or behind schedule the project is.
Cost Performance Index (CPI). The following formula is used for calculation:
CPI = EV / A
It reflects the efficiency of using budgetary resources in a project, comparing the completed volume with actual expenses.
Schedule Performance Index (SPI) - Similar to CPI, but focuses on timing rather than finances:
CPI = EV / PV
Number of errors. This metric helps identify areas and frequency of occurrence of situations that require functionality correction. The higher the number of errors, the higher the probability of missed deadlines and increased project budget.
Resource plan. This indicator reflects the number of participants involved in the project and their share in the overall work. It allows you to assess the adequacy of resources at each stage and correctly distribute tasks between them.
Resource utilization. Reflects the efficiency of their use.
Return on investment (ROI). This shows whether the project is profitable (and if so, how much exactly). To evaluate this KPI, the manager takes the ratio between the funds invested in the project and the financial benefit.
Before selecting key performance indicators, it is important to keep in mind that they must be achievable. It is necessary to take into account the specifics of the project, and also to agree on the criteria with the key participants of the project team and the management committee.