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6 PPM metrics you should be measuring (but probably aren’t)

Man with his head in his hand looking frustrated

Man with his head in his hand looking frustrated

As a PMO expert, I’m always intrigued by the different metrics organisations use to measure the success (or not) of their various projects and programmes.

Over the years I’ve seen various metrics come and go as trends wax and wane. However, I believe there are six metrics that have stood the test of time and, if measured correctly, will provide deeper insight as to the effectiveness of any project or programme.
In no particular order, you should consider measuring:
1. Dependencies – This is more than just output dependencies, you should also be actively measuring dependencies of scare resources and other shared services
2. Programme & Project return on investment
3. Stakeholder views on the effectiveness/efficiency of the portfolio
4. The speed projects move through the pipeline
5. Scale and trend of relying on external resources, e.g. consultants, contractors etc.
6. Amount of investment written off due to under-performing programmes and projects
What do these metrics give you?

Dependencies
By measuring more than output dependencies you can get an accurate picture of any bottlenecks or shortages before they happen, giving you time to resolve potential problems before they occur. For example, you might discover that two discrete projects, delivering two completely separate outcomes need to access a particular piece of equipment in the same short time frame.

Programme & project return on investment
Actively measuring programme and project ROI allows you to quickly build up a picture of the types of activities that contribute most effectively to you organisation’s KPIs. ROI does not have to focus solely on monetary benefits, it could include things like social responsibility, employee engagement and other organisation specific goals.

Stakeholder views of the effectiveness/efficiency of the portfolio
Understanding your stakeholders’ views means you can positively influence the way new initiatives are met within the organisation by pitching to their pain points. This can significantly reduce the amount of negativity that can be directed towards new initiatives
The speed projects move through the pipeline
This is an interesting, and often under-utilised, metric. By measuring the speed of projects through your organisation’s pipeline you can identify whether or not you are identifying the correct opportunities; if there are particular areas in the pipeline that are bottlenecks; if there are particular areas of the pipeline that are leaky, and whether or not your programme and/or project lifecycle is effective. Not bad from one metric.

The scale and trend of relying on external resources
In many organisations only data relating to permanent staff is measured. This can provide a false picture if it is used to measure resource requirements and utilisation. Measuring the scale and trend of external resources gives a more accurate picture but can also flag up areas of resource shortages that may not necessarily be visible under normal circumstances – for instance requiring an external resource every time a particular employee goes on leave could indicate there is an underlying skills shortage.

The amount of money written off due to under-performing programmes and projects
Calculating the amount of money you write off to under-performing programmes and projects can be an alarming exercise but it is something that is well worth doing as it can help justify why under-performing programmes and projects should be stopped and their allocated resources re-distributed.

Why bother measuring?
You can’t afford not to. Time and again independent research has shown strong correlation between strong PPM and increased organisational growth.
Jeffery & Leliveld from MIT reported that those organisations that reach a synchronised level of portfolio management achieved cost savings of 40%1.
Weill & Ross from Harvard Business School noted that a study of over 300 organisations in 23 countries found growth and agility were linked to a portfolio approach2.
KPMG New Zealand’s recent project management survey results also back this up3.

References
1. Jeffery, M. and Leliveld, I. (2004) Best Practices in IT Portfolio Management. MIT Sloan Management Review, Spring 2004 Vol 45 No 3.
2. Weill, P and Ross, J. (2004) IT Governance: How Top Performers Manage IT Decision Rights for Superior Results, Harvard Business School Publishing
3. KPMG New Zealand Project Management Survey 2013

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