Performance indicators are management tools that help monitor and control project performance. Through them, your team can know how each activity is progressing, if deadlines are being met, and objectives are being achieved.

The number of indicators depends on the complexity of the project and the need for monitoring it has, therefore, it varies from company to company and also from project to project.
In today's post, you'll find out which performance indicators you can't afford to overlook when managing your projects. Check it out:

Project Cost or CPI

One of the most important indicators in any initiative is cost. You forecast your budget when planning the project's steps, resources, and activities, and you track actual spending to verify if what was foreseen is being achieved or if there is any discrepancy.

The calculation of this indicator is quite simple:

Planned value = % of tasks to complete x project budget.

If you're estimating the budget based on your team's work hours, the formula changes slightly:

Planned value = hours remaining to complete the project x hourly labor rate

Return on Investment (ROI)

ROI - Return on Investment is one of the most used indicators to calculate whether a project is generating the expected profit or not. But it is important to note that it is a measure of the past, meaning, can only be calculated based on your history.

It can also vary from month to month, so it is an uncertain measure that should always be evaluated alongside other economic indicators, such as NPV – Net Present Value and IRR – Internal Rate of Return.

In any case, the higher the ROI of a project, the more money it is bringing into your company. You just need to check if this return justifies the investment or if the money could be invested in another project, a decision that can be easily made with the project's feasibility analysis.

Schedule Performance Index

A delayed project means the team is mobilized for longer, more resources are used, and, of course, an unsatisfied client. You can even lose your entire investment if the project is too delayed, as happened with several Olympic constructions. Because they were not finished on time, their purpose was lost.

Therefore, one of the project performance indicators that you cannot miss in your control is the schedule performance or SPI (Schedule Performance Index). To calculate this indicator, simply check the planned schedule versus the actual schedule, dividing the number of hours completed by the total number of planned hours.

The closer your result is to 1, the better your performance is in meeting the project schedule.

Deadline overrun

Regarding adherence to the planned schedule, can you calculate the Schedule Slippage Index, what identifies how far you and your team are from meeting what was agreed upon with the client or internally.

The calculation is as follows:

Deadline deviation = (Actual Finish – Planned Finish)
                                            Planned duration

Customer satisfaction

another important indicator in project management is customer satisfaction when the project's result should generate some kind of benefit for it. In this case, you can use a rather simple formula, used by a large number of companies: the NPS.

Actio’s Net Promoter Score it's a way to determine customer satisfaction with just one question:

On a scale of 0 to 10, how likely are you to recommend our company – or team – to others?

It seems superficial, yet it easily shows how satisfied or unsatisfied the client is with your team's work. The responses are divided into three segments:

• Reviews 9 and 10: these are your brand's promoters, customers who recommend your company to others.
• Ratings of 6 to 8: these are the neutrals, meaning customers who are neither satisfied nor dissatisfied. They do not usually recommend companies to other people.
• Ratings below 5: these are detractor customers, meaning those who are unsatisfied, do not recommend your company to anyone; on the contrary, they might speak negatively about you.

Wondering how to manage so many indicators, formulas, and calculations? A good management tool is always recommended, especially since a project manager's biggest responsibility is to lead the team, not get bogged down in that, wouldn't you agree? Strategic Management Software automatically calculates the indicators SPI, CPI, PV, CV, SV, EV, AC, BAC, EAC, ETC, and VAC.

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