If anyone asks you, why you need metrics and KPIs to manage IT projects, the answer is because you need to make your decisions based on data. It's like in medicine. The golden standard is evidence-based medicine. The same that is good for your health is good for your business. Therefore, data-driven decision-making is the best way to improve your project management.
The best way to evaluate your project by the time it's closed requires metrics and KPIs. However, you should also monitor your project to improve the development process, tackle problems, and enhance the quality of your product.
In this article, you will learn about metrics KPIs designed for Project Managers as well as Product Managers, or Portfolio Managers.
32 IT Project Management Metrics and KPIs and How to Track Them
Straight down to the merits. Here is the list of the most valuable and popular KPIs and metrics in Project Management.
1. Cost Savings For Organization
This is one of the more general Project Success metrics. It is also one of the business justifications for many internal projects.
In a hindsight, you will be able to check if the project outcome had any impact on the cost savings. Another issue is how big the savings were, and if they had overcome the costs of the project.
2. Work in Progress (WIP)
It is important to know how many tasks or stories are currently in progress. If there are too few, it might mean that your team will underperform. But the same is true when there are too many tasks in progress.
As a Project Manager, you should control WIP and tackle the issues responsible for variations. To do that, you should first establish your teamwork capacity. Kanban and kanban boards are handy for this purpose.
3. On-Time Completion Percentage:
This metric tells you how many tasks have been completed by the deadline. Count the number of tasks in the project (or a certain timeframe), and how many of them were done on time.
A low index indicates issues undermining your team's performance. You should find out and resolve the obstacles.
4. Resource Capacity:
To allocate your workforce efficiently, you need to know their capacity. You multiply the number of people on your team by the time they're available. You can count it as working hours or a percentage of their working day/week/month.
This metric will be helpful to estimate your hiring demand. Remember that different specialists often aren't interchangeable. Make your calculations accordingly.
5. Number of errors
As simple as its name. The number of errors is an important KPI in IT Project Management and software development in general. Apart from the sheer number of bugs, you should check if they correlate with a particular stage, team members, or issues. Monitoring the number of errors in time will help you prevent them in the future and possibly avoid the expenses on bug fixing.
6. Number of Issues Since Live
According to this metric, you will know how many problems occurred since your product had gone live. It's mainly useful in the long term and enhances the improvement in Project Management and software development processes.
7. Number of Customer Complaints
Projects have various types of customers (both internal and external), so be careful and make sure you've identified each of them. Do they complain about your product, or even about the way your team works on the project? These complaints aren't valid every time, but they're surely worth consideration.
8. Number Of Change Requests
Unlike Agile or SCRUM projects, the number of change requests in a Waterfall project usually is a bad sign. It means that the project scope and deliverables had been established wrong. You might need some agility and get back to planning to avoid change requests in the future. Moreover, changes will probably affect budget, deadline, and quality.
9. Return On Investment (ROI)
This KPI will tell you how profitable your project is. To do that, you need to compare the net profit resulting from the project in a certain time and the total investment in the project. Such an estimation is also handy when establishing a business justification for the project.
ROI = Net Profit/Total Investment * 100%
10. Requirement Stability Index
Supporting the number of change requests, you can calculate the overall requirement stability index. It compares the number of changed, deleted, and added requirements with the initial number of project requirements. Again, this metric is particularly useful for evaluating the project management process.
RSI = 1- ((Number of changed + Number of deleted + Number of added) / Total number of initial requirements) * 100%
11. Test case execution productivity
Testing is one of the fundamental stages in software development projects. Therefore, it's worth measuring its efficiency. To do that, you can check how many test cases had been completed in a certain amount of time. Re-testing and test results review need to be included too. However, if you want to have a fuller view, you should count it with person-hours or person-days.
Test case execution productivity = number of completed test cases/effort spent on testing.
12. Defect density:
Another code quality metric. It will tell you how many defects had been found in your software, compared to its size. The size is usually expressed in thousands of lines of code (KLOC) or function points (FP).
Defect density for a project = Number of defects/ Size of the project (in KLOC or FP)
What is Your Earned Value?
Earned Value Analysis is a method used to track and forecast performance within a project. It's based on the assumption that the value created in a project can be expressed in money. Earned Value enables you to evaluate many metrics. Here we will focus on the most popular.
13. Planned Value (PV)
This one indicates what amount of work should have been completed within a certain timeframe. You can count it either for one task or for the whole project.
PV= number or percentage of planned tasks * tasks budget.
14. Earned Value (EV)
Earned Value is the value of all the tasks completed. In other words, everything your team has delivered until now.
EV= number or percentage of tasks completed x tasks budget
15. Actual Cost (AC)
Again, the name says it all. It is the real cost of tasks completed.
16. Schedule Variance (SV)
When you want to know how off you are from the works schedule, this will help you. What you get is the information about how much ahead or behind you are with your project.
17. Schedule Performance Index (SPI)
Similarly to the Schedule Variance, it will position you against the schedule. However, with SPI, the information is compared to the size of your project. A 1000$ variance has a different meaning for various types of projects.
18. Cost Variance (CV)
A project can be of the schedule, but it can miss the budget as well. Cost Variance gives you an idea about the latter. Negative CV means you're over the budget, while positive means you're under it. Positive CV isn't always that positive. You need to compare it to the PV (or SV) to be sure.
19. Cost Performance Index (CPI)
CPI informs you how much of the budget you are, compared to the size of your budget. Very similar to the SPI with results alike.
CPI = EV/AC
20. Estimate at Completion (EAC)
We need to introduce the BAC. It's not a metric, but it's crucial for the calculations. BAC is the project's planned budget. EAC tells you how much the cost variance will affect the overall cost of the project. There are two main ways to calculate it:
- if the reason for cost variance will continue and the performance will permanently slow down (e.g. you lost one worker):
EAC = BAC/CPI
- if the reason for variance was accidental and the performance will return to normal:
21. Estimated to Complete (ETC)
Let's say you had cost variance. How much money you will need to spend to complete the project? It's particularly important if the assumptions and scope had changed.
ETC = EAC – AC
22. Variance at Completion (VAC)
Knowing the previous metrics, you can now count the forecasted final cost variance. Depending on the EAC counting method chosen, the results will vary.
VAC = BAC-EAC
23. To Complete Performance Index (TCPI)
Alright, but what if you wanted to complete the project within the budget against the odds? TCPI will let you know what performance you need to achieve exactly this.
TCPI = (BAC-EV)/(BAC-AC)
AGILE Project management Metrics
IT project managers often employ the Agile approach in their projects. Therefore, they will need metrics and KPIs suitable for such a way of getting things done. Below you will find the most useful IT project management metrics for Agile.
With the use of a Kanban board, it will tell you how many cards your team can process in a given time, e.g. a week. Tracking the throughput over time gives you the possibility to assess the changes in the team's performance.
25. Sprint Burn-down
Presented on a chart, Sprint Burn-down indicates the number of work-hours or the percentage of work remaining in the particular sprint. It shows how the self-directing, self-managing, and self-organizing team proceeds with work in time.
26. Sprint Burn-up
It depicts the effort reported for each sprint, the cumulative amount of effort, and its ideal flow in time. It shows the real effort put in by the team, as opposed to the effort-time estimated on the planning session.
27. Sprint Velocity
It measures how many stories have been completed within a sprint. It's best to gather such data across multiple sprints and compare the performance.
28. Lead Time
It's a metric to use if you employ Kanban or just a kanban board. It's the time from the moment a task lands on the board to the moment it's finally done.
29. Cycle Time
Unlike the Lead Time, it shows how much time your team has spent really working on the task. Counted as the period between moving to a certain column and the completion of work. The time a card spends in a particular cycle helps you evaluate the team's performance. It's particularly handy for repetitive tasks.
30. Cumulative Flow Diagram
It isn't exactly a metric. The diagram depicts how long and how many tasks would be spent in each stage. You want to see all bands steadily growing with relatively equal distribution of time spent on each stage.
31. Escaped Defects Ratio
This quality-related metric compares the number of defects detected by the customer or end-user with the number of defects detected by developers and the QA specialists.
Escaped defects ratio = number of defects found by the customer / (number of defects found by the customer + the number of defects detected by developers and the QA specialists)
32. Planned-to-Done Ratio
It's good to know if your team isn't constantly underperforming. Measure the Planned-to-Done Ratio by comparing the number of tasks/stories/functionalities scheduled by the team with the number of those actually delivered.
There are more metrics and KPIs for Agile projects. Interestingly, you can use the Earned Value method for Agile as well. According to PMI Global Congress 2010, there's an easy way to adjust EV metrics for Agile projects.
There isn't a one-fits-all metric or KPI for the IT project manager. Everyone needs to choose from a plethora of useful tools. We hope this list will help you make a good choice.
Looking for Talented IT Experts?
We have dozens of them. They gather in our Talents Network. Drop us a line, and we will contact you with IT Project Managers, Business Analysts, and Developers, who fit your industry, project, and company culture best.