Your guide to common project performance measurement methods
July 4, 2022at7:00 AM
Measurement is at the heart of successful project management. To ensure your project is on the right track, collecting and measuring data is essential to making sure it’s a worthwhile endeavor. Knowing common project performance measurement methods can help you strategically meet your business goals.
At NFA Consulting, we can help you navigate and build a system that allows you to measure the success of each project. Get started with our guide below, which offers five common project performance measurement methods.
Project performance management metrics: Why do you need them?
Project performance measurement methods help us improve our understanding of what works and doesn’t work, removing uncertainty so we can make informed decisions.
Project performance measurement methods evaluate a project's value. One of the critical metrics for proving whether something has value is calculating a return on investment (ROI). This is used to measure an investment's efficiency or probability of success.
Project measurement methods improve performance. In addition to measuring value, knowing how you can improve performance is also a crucial part of a project’s success. Having relevant metrics can improve your understanding of a project and remove any uncertainty so your employees can make well-informed decisions.
Choosing project performance measurement methods
It’s important to choose metrics that align with your project and business. Here are a few things to keep in mind as you’re selecting metrics:
Understand what you want out of your project
Determine what factors are critical to measuring success
Make a plan for each factor and identify how you will measure it
5 project performance measurement methods
Want to know how to measure a project’s success? Read more about our top five project performance measurement methods worth considering for your project.
1. Return on investment
This metric tracks the dollar amount earned for the amount invested in a project. Instead of looking at the overall profit of a project, it measures the benefit from the project divided by total costs (resources, labor, training, and overhead).
2. Gross profit margin
Gross profit margin is a metric used to assess a business’s final health. It tells you what your business made after paying for the direct cost of a project, which can include labor and other production costs.
Are you getting enough out of what you're putting into your projects? This project performance measurement method looks at a company’s overall capabilities and how well it allocates its resources. It measures the relationship between your inputs and outputs.
4. Earned value
With the earned value metric, your business should be able to show you how much value you’ve earned from the money you’ve spent on a project. It compares the value of the work completed to the approved budget for your project.
5. Overall customer satisfaction
If your customers are unhappy with your product or business, it shows you that something needs to change. Creating a survey that polls your customer base can help you measure the quality of your service or product and whether it satisfies real customer needs. You can work with your team to develop a business scoring system.
Find out the best project performance measurement methods for your business with help from NFA Consulting
As a business owner, it’s important to choose the best project performance measurement methods for your business. Getting dedicated expertise from NFA Consulting can give you the informational resource you need to get the most out of your team, performance, and projects. Get in touch to learn more about how we can help you.