The Importance of Using PMI Metrics in a PMO
Posted by [email protected] on Jan. 10, 2023 / Subscribe 0
By Liyuan Gong
PMI metrics can be a very useful tool for project executive teams to understand the maturity level of an organization. Project metrics are important indicators of the health of the project, and they provide details to make better operational decisions. However, many project managers struggle with incorporating PMI metrics into their teams. Often, they face challenges in understanding, evaluating, predicting, and controlling data that can be transformed into useful information. Besides, choosing the correct set of metrics can also be tricky.
PMI metrics are not exactly performance KPIs. Key Performance Indexes (KPIs) and metrics are often considered the same thing in day-to-day business contexts. However, while they work in similar ways, they are not used for the same purposes. Metrics report on what happened and are generally focused on past events. KPIs are metrics also, but they typically describe a trend and become drivers for decision-making on the future direction of the project. KPIs are measures that demand action from the team to reset the trend, whereas metrics generally focus on the accomplishment of performance objectives—where are we today? KPIs measure project performance based on key business goals while metrics measure performance or progress for specific business activities. KPIs are strategic while metrics are often operational or tactical. In summary, a ground rule: all KPIs are metrics, but not all metrics are KPIs!
PMI metrics vary at different organizational levels. Many organizations get overwhelmed with the amount of data they can produce. And they sometimes fail to match the right data with the right business activity. For example, at the organizational level, some useful metrics include performance against industry benchmarks, the relative growth of the organization, and the sequential growth of the organization. But at a project level, some other metrics are more helpful, such as project progress against the schedule, cost incurred against budget, adherence to quality standards, and risks versus rewards. Once the metrics at different organizational levels are set correctly, based on the different business activities, it is much easier for project managers to translate a large amount of data into useful information.
The appropriate performance measurement tools inform and evaluate PMI metrics. With the correct type of data incorporated into the correct business activity, it can still be overwhelming to translate performance metrics into quantifiable data. Without quantifiable data, we do not have clues about how to control and improve the operations, therefore, we cannot make the right decisions. Luckily, there are many well-developed project performance measurement tools that are very useful for data translation, visualization, and analysis. For example, Microsoft Power BI is a popular tool that can be used to transform abstract concepts and hard numbers into easy-to-interpret charts. It can quickly summarize data from performance reports and illustrate it on the board for the team to brainstorm. There are many other options, such as SAP Analytical Cloud, which is proven to have maximum data reporting efficiency. Organizations should select the most suitable platform based on their specific purposes.
Though PMI metrics can be useful for decision-making, project managers should not only focus on the data, reports, or instruments. Collaborating with the team and consulting the organizational strategic plan must run parallel with the evaluations based on the PMI metrics. Do not use metrics as justifications when bad decisions were made! To establish healthy PMI metrics, project managers need to have transparent discussions with the team. Furthermore, PMI metrics should be powerful tools that help the team develop improvement actions, not the end goal!
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