KPI: Tracking Your PMO Success is Important

PMOs (Project Management Offices) are the new norm in corporate America, but many are being dissolved because they don’t have the proper metrics in place to track progress.  All too often, a PMO’s stake in a company’s success is not measured, leading companies to undervalue its’ worth because they perceive that the PMO is not providing a benefit.  Consequently, nearly half of PMOs will be dissolved without ever having had their value objectively assessed.   

According to a recent Wellington survey, 80% of organizations have one or more PMOs, and nearly one-quarter of these are less than two years old.  For early-stage PMOs such as these, a proven track record does not exist, necessitating the need for data that demonstrates the substantial benefits resulting from its efforts.  However, KPIs (Key Performance Indicators) are not in place, making it difficult, if not impossible, to put together this data.

PMOs that implement KPIs and measure their success substantially increase project performance. By tracking metrics, offices can identify areas that need improvement while substantiating the areas that work exceptionally well.  If your PMO wants to track successes and increase efficiency but does not know where to begin, here are a few tips and a list of the most common KPIs to get you started. 

What is a KPI?

The Oxford Dictionary defines a key performance indicator as:

 “a quantifiable measure used to evaluate the success of an organization, employee, etc. in meeting objectives for performance.” 

KPIs are indexes reflecting the success and performance of a PMO.  

KPIs for PMO

Global research firm, Gartner, recommends the following common KPIs for PMOs:

Goal: Improved Project Completion

  • Ratio of successfully completed project to all projects in the portfolio (per period)
  • Ratio of successful, strategically important projects to all strategically important projects in the portfolio (per period)
  • Ratio of successfully completed, strategically important projects to all projects in the portfolio (per period)

Goal: Improved Predictions

  • Ratio of estimated project costs to actual costs
  • Ratio of estimated project duration to actual duration

Goal: Improved Stakeholder Satisfaction

  • Average customer satisfaction compared to previous years
  • Average project employee satisfaction compared to previous years

Goal: Faster Time-To-Market

  • Time elapsed between project conception and project start compared to previous years
  • Time elapsed between project conception and project completion compared to previous years
  • Percentage of projects that have the same progress over X reporting periods

Improved Resource Management

  • Number of training courses completed compared to previous years
  • Relationship of internal project leaders/specialists to externally recruited project leaders/specialists
  • Number of employees who are assigned to several projects at the same time
  • Number of projects with resource conflicts compared with previous years

Improved Project Management

  • Time elapsed between the occurrence of deviations, risks, conflicts and/or corrective actions
  • Proportion of active projects without conclusion of contract or placing of order
  • Percentage of project status reports older than X days
  • Relation of projects with complete documentation compared to projects without documentation

Optimized Finances

  • Analysis of the annual ROI of all projects coordinated by the PMO
  • Percentage of projects under the agreed budget (compared to previous years)

How to Introduce KPIs

Now that you have a list of KPIs, it is time to implement your strategy and begin tracking all the value that your PMO brings to the company.  Here are a few tips to help you introduce your KPIs.

  • Compile a list of key performance indicators that you feel will work best for your PMO and team.
  • Often times, a project manager or executive may be responsible for creating KPIs for a project, but they may not have a realistic idea of where to set a KPI. To avoid this issue, consult with stakeholders that carry out the actual work to ensure that realistic indicators are being set.  
  • Decide how often you will report on the value of these indicators.  By defining the reporting frequency, you can easily set up predictable alerts that ensure you won’t forget to run the figures.
  • Over time, PMOs evolve, resulting in a change of responsibility.  You will need to be ready to reassess the KPIs to reflect these changes.
  • Make sure that your team can readily access reports and surveys.  By giving them access, they can see firsthand where improvements need to be made.
  • If KPIs show that development is headed in a negative direction, take countermeasures to get things back on track.  
  • At the end of successfully completed projects, solicit positive statements from stakeholders explaining how they benefited from the PMO’s efforts.  These statements can later act as a testament to the quality of work being put forth by the office.