7 Key KPIs for Effective Project Portfolio Management

Keeping a track of KPIs or Key Performance Indicators is absolutely critical to project management and success. In the absence of a system that tracks KPIs, it is nearly impossible to assess the progress of a project towards the predetermined goals.

A key performance indicator or KPI can be defined as a kind of metrics (performance measure) used by an organization for evaluating the results of a specific activity. It is important for the PMO to clearly define and get consensus on a set of measures in order to show that it adds value to the existing business. This consensus should involve all key stakeholders.

The KPIs for project management needs to be examined under 4 distinct categories:

• Timeliness
• Budget
• Effectiveness
• Quality

Here is a list of 7 key KPIs necessary for effective project portfolio management:

1. Operational efficiency
The operational efficiency KPI is utilized for measuring the team performance as well as resource utilization. For example, the resource utilization measure looks at the amount of time invested on one particular resource or set of resources. In other words, it involves measuring and evaluating ‘resource productivity’.

2. Time spent plus adjustments made to project schedule
This KPI essentially measures the time invested by team members in a particular project (together or individually). It also looks at the amount of adjustments made by the team to the existing schedule, that is, the project completion date.

3. Budget variance
Each project starts off with a projected budget which has a certain amount of money allocated to each resource and activity. The budget optimization KPI looks at the variations between the estimated budget and the actual budget.

4. Delivered business value
You could easily term this as the most critical KPI in project portfolio management. The company uses business value measures for calculating the expected project value. Why is this metric so important? Well, projects are dependent primarily on the ROI when determining success or failure.

5. Alignment with strategic organizational goals
This refers to the process of evaluating a project from the point of view of how it is aligned with the company’s overall objectives and unit and target investment. All ongoing business units are measured against set targets for cost and effort. Once the money is spent on these units, they are examined against two distinct factors: business investment and investment class.

6. Customer satisfaction
One of the key indicators of a successful project is greater client satisfaction. You might be surprised to know that there exists a PPM KPI that is designed exclusively to measure client satisfaction. And how is this done? The measurement is a cumulative analysis of stakeholder and customer feedback after project delivery.

7. Count of errors
This KPI for project portfolio management focuses on the number of times that tasks had to be revisited during a project. Both the time schedule and the budget of a project get affected when members end up reworking on certain things in a project.


2 thoughts on “7 Key KPIs for Effective Project Portfolio Management

  1. Raphael kateb

    May be you forgot one important category that would make any project a success or a failure is employee satisfaction. I have seen to many times employees that are not on board regarding a project won’t cooperate and will do everything to make a project fail .

  2. a. Frans Wauters

    In fact you could split up KPIs in A. Project execution and B. Results and value of the delivered products by the projects. The latter are more important and should be measured first to check you’re doing the right things. The former are giving a view if you’re doing things the right way.
    I also agree with the comment of Raphael, if the “users or employees” are not happy with the delivered products uou’re project is doomed.


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