Importance of Project Tracking KPIs
Project tracking KPIs are primarily used to track the performance of a specific outcome of a business or a project and make changes to the rest of the process according to the performance. These are quite helpful when it comes to project control and monitoring processes.
The complete form of KPI is the Key Performance Indicator; this comes under monitoring and controlling the project. The main target of KPI is to provide you with specific evaluation data of the project, organization, or business to increase performance and productivity.
It can also track the impact and outcome of changes repeatedly with accuracy. Thus, you can also call it a project monitoring indicator. Though it’s used to track performance, quality, progress, and various other aspects, it’s one of the tools used for project management.
Use of KPIs
- To measure the progress and figure out if the approach towards the outcome is on track or not.
- Evaluation of the performance
- To indicate the project’s health
- Create a better framework for the project
There is a specific criterion known as S.M.A.R.T, accepted worldwide for KPIs and their goals.
S - Specific - indicators should target a specific goal and its outcome.
M - Measurable - indicators should be able to measure the required data precisely.
A - Achievable - the indicators should also report achievable outcomes relevant and related to the project.
R - Realistic and Relevant - The evaluation report from the project monitoring indicator should be relevant and realistic to the target program or project. The performance evaluation report should include data that are relevant and like to be accomplished.
T - Time Bound - indicators related to evaluation and monitoring of the system track the progress of a specific program or project in a set time frame.
Why do we need KPIs?
When you work on a project, you cannot just keep working on it. To make it perfect, you have to plan, monitor, review, make changes, and in addition, work efficiently to get the best outcome possible.
So, in the case of monitoring the project, KPIs help you in the evaluation of all these data and provide you with the report. There are many KPIs; for a specific purpose, you have to choose a specific KPI and implement it.
By studying the KPI reports, you will understand the performance and progress of your project or business. Doing this also allows you to figure out any of the potential risks and any required improvements.
Applying a management framework is a great way to select KPI or a project monitoring indicator.
There are a number of KPIs you will have to choose according to the system of your project.
People use these indicators when they need the outcome in a numerical form, percent, ratio, or a pure number.
As the name represents, these indicators represent the quality or health of a particular target in a specific set of time. For example, you can measure the changes in the level of a specific project or program within a specific time.
People use these indicators for the purpose of predicting the outcomes of a process. For example, if you want to know the future trends of a product or predict the future performance of a project, using a project monitoring indicator like this can be helpful.
Whereas lagging indicators looking forward to the future predicting outcomes, lagging indicators being the opposite measure of all your past records. For example, the financial indicator is also a lagging indicator.
Financial Indicators are mainly used to measure the financial performance of a project. It helps adjust the funds by making some changes in the budget plan. You can also use this to measure regular expenses against your revenue.