Author: Chris Vandersluis

For Fast Effective Project Management Help, Pick up the Batphone!

Written by Chris Vandersluis on July 14, 2010. Posted in Articles. 1 Comment on For Fast Effective Project Management Help, Pick up the Batphone!

FastEffectivePM1 I’m a child of the 60s. Born in 1958, I was 8 years old when the original Batman TV series came on the air in 1966 and only 10 when it wound up in 1968. It lasted 120 episodes but the impression it made lasts to this day.

In the world of Adam West and Burt Ward, who played Batman and Robin, there was a ‘bat’ solution to everything. No matter what the problem, Batman would have the solution. The Batmobile, Batboat, Batplane and Batcave all had their place. And, if you were someone who needed help no matter how difficult, how could you reach Batman? Well, with the Batphone of course! Pick up the Batphone and help would be on the way.

I’m nostalgic but reminiscing about a 1960s series really isn’t my point today. It’s over 40 years since we were introduced to the red Batphone but we’ve got many clients who would dearly love to get their hands on one. I know I get calls on a regular basis from people hoping that I’m the person who could answer the Batphone and deliver them the help they want.

In the world of enterprise project management systems, a Batphone would be a wonderful thing to have. God knows, I wouldn’t mind the number myself from time to time. The problem is, enterprise project management solutions have always sounded easier to deliver than they are. There are a number of reasons for that.

Firstly, enterprise software of all kinds is now dependent on a “stack” of technology. They require a database and a database server, an application and an application server, there must be middleware, security and identification systems, middleware communications, the operating systems, a web server, client browser or other software and operating systems, firewall servers and probably email servers. Each and ever one of these elements should, you’d think, be designed to work with the other, and in fact, all those elements have probably been created with multiple purposes in mind. However, getting them all to work together is challenging enough but we also have a myriad combination of hardware and network issues. Oh, and we haven’t mentioned international versions and “localization” complexities.

That’s just the building blocks of the modern enterprise system. There’s a massive second element and that’s configuration. There are resource, rate, task and project tables, system options, report parameters, customizable fields, algorithm options, calendars, and ancillary files such as WBSs, OBSs and other categorizing tables to populate. Each of these can have an effect on what your enterprise system can do for you. How should you be organizing the system to generate the effects you desire? For most large epm systems there is a manual of course and then, for many, there are third party books and resources that can help with each element of the system.

The third and more significant challenge is to decide what you want to accomplish with your epm system. To determine the functionality to use in your epm system, you’ve got to spend some time thinking about how you’d like to manage your projects and your portfolio of projects. You’ll need to think about how to do preliminary schedules, determine the metrics for valuable vs. non-valuable projects, resource capacity planning, resource allocation, resource conflict management, project tracking, management intervention, costing, estimating, variance reporting and more. To do this you’ll need some knowledge of what your epm system is capable of and a lot of knowledge about how to manage projects.

There’s a workflow challenge to be managed too. Where will the data come from that will power this system? How will the data be gathered in such a way that the benefits of the epm system aren’t outweighed by the work required to feed it with data.

Did I mention training? Not ever project management user is created equal. You’ll need a skills inventory and a plan for ensure the people who need to do certain things with the epm system have the skills to do so.

Oh, what about changes? When any employee changes roles, you’ve got a training challenge and whenever there’s a new version of your epm software (as happens regularly) each of the elements above needs to be thought of again.

Is it any wonder we’d all love a Batphone?

For those of you who remember Batman, you know that he never charged for his services and, no matter how clever or diabolical the villain, Batman was always able to vanquish him within the 30 minutes available to him.

I must get all the calls from people who remember that part of the show. On a regular basis a call comes in for someone who thought that getting their epm system up and running would be a simple affair that the lowliest intern in their office could get underway perhaps with an hour or two of assistance from an internal IT person.

When that fails, there’s usually a second attempt; this time with someone more senior who’s given a couple of weeks to achieve victory.

That too has little hope of success and by week eight or 26 or 52, often the organization regroups and somewhere in there I’ll often get the call. It’s terribly upsetting to most people when I tell them that their simple upgrade may be several weeks of work or that the simple “reinstallation” they want to do is senseless if they don’t decide first what they want to accomplish with the epm product they’ve already purchased.

On a semi-regular basis, I have someone on the phone who describes to me how long it should take for me to fix their problem. They, of course, don’t have any clue how to fix it or they’d have done it already. But, they also know with a certainty how my personnel should fix it and how long it’ll take (usually an hour or two). We have little choice but to decline such calls.

Another regular call is someone who has a big problem but describes it as a solution. “I need you to come and create a proper report,” they’ll say. “What do you want to have in it?” I’ll ask. They won’t know. I always ask the client to describe the business problem and offer to help describe a solution to that but it’s harder to get people to think that way than you’d think.

It’s no surprise perhaps that there is more and more movement towards hosted epm solutions. I know the IT industry expects that enterprise solutions of all kinds will move this way to avoid at least the technological “stack” challenge and let clients focus their attention on the business and configuration aspects of the system.

People who deploy enterprise project management need to take into account the complexity of the business and technical challenge because there’s no Batphone really.

It’s a shame too ‘cause I’d be using it all the time!

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Chris Vandersluis is the founder and president of HMS Software based in Montreal, Canada. He has an economics degree from Montreal’s McGill University and over 22 years experience in the automation of project control systems. He is a long-standing member of both the Project Management Institute (PMI) and the American Association of Cost Engineers (AACE) and is the founder of the Montreal Chapter of the Microsoft Project Association. Mr. Vandersluis has been published in numerous publications including Fortune Magazine, Heavy Construction News, the Ivey Business Journal, PMI’s PMNetwork and Computing Canada. Mr. Vandersluis has been part of the Microsoft Enterprise Project Management Partner Advisory Council since 2003. He teaches Advanced Project Management at McGill University’s Executive Institute. He can be reached at [email protected].

Will Project Managers Have Their Heads in the Cloud?

Written by Chris Vandersluis on June 16, 2010. Posted in Articles. 3 Comments on Will Project Managers Have Their Heads in the Cloud?

The CEO of Microsoft, Steve Ballmer got this year’s slogan going with a bang, “We’re all in!” he cried to the crowd early this year. It’s a poker analogy of course. “All-in” refers to betting all of your chips; putting all your money on the next turn of the cards. You’re betting everything that you’ve got the winning hand.

What Microsoft has been betting on is moving many of its products to the “Cloud” where users can consume them online. As I was talking about this new message of Microsoft’s to my wife it prompted the obvious question, “What is the cloud?” I had to think about it a minute. What does the IT industry mean when we talk about Cloud Computing and what are the implications to the project management software industry and to project managers in general?

First of all, like almost anything in the IT world, there are numerous meanings; the cloud designation comes from network diagrams which had to depict connections to something out in the Internet.

projectmanagers-cloud1

So the “Cloud” can just refer to the Internet in general as in “somewhere out there”. In recent years though, applications that have been only available via the Internet have sprung up. There are numerous examples. Salesforce is a CRM, Contact Management System that isn’t installed at your local office. You pay a subscription as an organization and then access the application through your Internet Web Browser online. Google Apps is a suite of Applications such as Word Processing, Spreadsheets and Presentations that is available only through your browser. Microsoft’s office.live.com offers Word, Excel and PowerPoint this way also. Almost everyone knows about Hotmail, Yahoo Mail or Google’s Gmail. These are all Internet-based email systems that you don’t install in your office but rather access through an Internet browser or application of some kind. All of these examples are applications that live “in the cloud”.

One of the big concerns over cloud-based applications has been the security of the information. As many of us have seen in the past, social networking systems like Facebook are having its clients pay for its “free” service with a bit of their privacy. So, a new term sprang up, “private clouds”. This seems like a contradiction in terms but actually it’s referring to something of a mix of terms. A private cloud application is one which is not installed on your premises on your own servers, but rather is installed on the servers of a service provider who dedicates that server for your organization’s use. So, the privacy of the information, even though it is being transmitted in some way over the Internet, can be made much more secure.

OK! So that’s cloud computing, but I’ve yet to mention project management applications. Don’t worry, they’re there. There are a number of project management applications that are made available in both the Internet Cloud and Private Cloud models. Many clients we know are now having their enterprise project management applications such as Oracle’s Primavera or Microsoft’s Project Server hosted by a third party service provider. There are also software vendors who have designed their whole application to be available only through online subscription and your Internet Web browser. Take a peek at Canada’s AceProject (www.aceproject.com) based in Quebec city or Daptiv (www.daptiv.com) based in the US in Seattle. There are many more examples which you can find easily through an online search.

Your own applications, even though internally developed can also be moved to the cloud. There are many environments to choose from. Take a peek at Amazon’s EC2 Elastic Computing or Microsoft’s Azure environments, for examples. You can get your own virtual server at Amazon or a complete computing environment at Microsoft. More and more organizations are finding it attractive to offload their capital costs to such services in favour of regular operational costs as a method of improving cash flow and not tying up working capital in actual equipment. “Shift your CapEx to OpEx” say the salespeople.

With enterprise project management systems becoming more and more complex to support internally, there is some attraction to all of these models. Enterprise systems typically depend on a “stack” of technology. Take Microsoft’s Project Server as an example. We depend on Windows Server, SQL Server, Activity Directory, SharePoint, Internet Explorer and Exchange Server to make all the features in Project Server appear. If we can put responsibility for all of the server-based portions into the hands of a third party who specializes in such things, this can become attractive.

We estimate that more and more enterprise applications will not only become available from a cloud-based service, but that more and more organizations will insist on such applications being subscribed to that way, so look for more and more of your enterprise level applications to appear in the cloud. That being said, I don’t expect that at any time in the medium term we’ll see a movement completely away from locally installed enterprise systems. Also, regardless of what’s in the cloud, there will always be a market for individual project management tools.

So, what should you do? For the moment, probably not much that’s different but every organization looks at their internal tools every few years and I predict that people who are looking in the 2012 to 2015 range of time will be thinking about whether to install those tools in-house or in the cloud.

There are some clear advantages to installing in the cloud and a few things to be aware of.

On the advantage side, the maintenance effort of keeping the enterprise system available, patched, upgraded, backed up and operational falls to someone else. Suppliers of such solutions also keep staff experienced in the maintenance of the tool, so you don’t need to get stressed over acquiring those skills internally or keeping them current. There’s also a financial consideration. Installation of a new enterprise system is typically quite expensive; requiring hardware, operating systems, databases and a range of other supporting technology. Expertise must often be hired to do the basic installation before you can even think about configuration of the tool for your particular use. These costs can be amortized over time in a cloud-based model and woven into the regular subscription fee. Of course, if you evaluate the total cost of ownership, it may appear more costly to pay month-by-month over the long term. You’ll need to check your business case carefully to ensure you’ve allowed for all the costs and cost savings of each option.

On the disadvantage side, you’ve got a few basic things to think about. First, working with an application in the cloud means that every one of your users has to be able to get to the cloud. That means Internet access to the application without the firewall or other restrictions keeping you from it. Security also becomes a concern. If you’ve got a contract in certain industries (like Defense or Healthcare) then you may have legal requirements for security that must be complied with. If your organization is used to doing custom modifications to your applications then that may be a factor also. Some cloud-based applications are not designed to be modified by the end-user. This may be more restrictive than you’re used to. For some applications, bandwidth and performance may be issues. One common question is to find out where the application and its associated data will be physically located. Just because a service has an address that is local to you doesn’t mean they house their data there.

Cloud-based applications are here to stay and you’ll need to include “Should we move it to the cloud?” as one aspect of future enterprise project management and enterprise project portfolio management applications.

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What if I Don’t Prioritize My Projects?

Written by Chris Vandersluis on May 19, 2010. Posted in Articles. 4 Comments on What if I Don’t Prioritize My Projects?

A number of years ago I was privileged enough to listen to Ken Mattingly give a keynote address to a room full of project managers. If his name doesn’t ring a bell, think of the movie Apollo 13. Ken Mattingly was the astronaut played by Gary Sinise who had to stay behind because they were sure he would get the measles while enroute to the moon. Mattingly is now Rear Admiral Mattingly and I was eager to hear what he had to say about project management. When he opened the floor for questions, someone asked him if he could give his definition of project management.

whatifidontprioritize1 “Sure,” he replied. “Project management is doing a specific thing within a specific time with insufficient resources.” We all laughed but I scribbled it down.

It’s almost universally true. After all, if you had more than enough resources and unlimited time, who would need project managers or project management? Lots and lots and lots of people would work on the project until it was done whenever that was.

Everywhere I go, project resources are overloaded and project managers struggle to allocate those resources on the work that they have committed to accomplish.

In a multi-project, matrix organization, everyone wants their project to be selected and approved. In a 2006 survey done by UMT for Microsoft, the majority of organizations polled reported that they selected projects for approval based on their individual merits only rather than comparing them against the merits of other projects. In fact, this method was more than 50% more popular than any other answer.

Not only do project sponsors want their projects approved, but once they’re approved, they want them to be done first, as the highest priority, before any other project is undertaken.

That is a lot of pressure towards a resource management crisis. You can see the result below

whatifidontprioritize2

I see this picture all the time at the clients I visit and when you’re as used to it as I am, it doesn’t take too long to interpret. The blue bars represent resource capacity. The red bars represent resource requirement. In any period where the red bars exceed the blue bars, the resources are overloaded. In this example which would be taken at the beginning of January and looking forward to the next 12 months, the resources are overloaded in January through June. Then the resources are underloaded from July through the end of the year. If we look for a moment or two longer at the height of the bars, we can see that the requirements in January through April are overloaded by about 300%.

This is not going to be fixed with a little overtime and some elbow grease. This overload is unfixable. It was caused by starting too many projects within this period and it’s a fact that they won’t happen when they’re planned. And yet, if I look at the end of the year, it is clear what will happen here. The underloaded months will take the projects which are sure to be delayed and by the end of the year, most of this work will be accomplished.

If you’re reading this and saying under your breath “How can that guy see our internal data,” don’t worry. The good news is, you’re not alone. The bad news is, you’re not alone. This is a very common scenario.

Now, it’s clear that the projects which have been pushed into the first half of the year won’t all happen as they were scheduled so what will happen?

Management by Emergency.
This is almost certain. All the projects underway in the first half of the year are going to be under tremendous pressure. That pressure is sure to translate to emergency after emergency after emergency.
Low Staff Morale
This is often characterized by high staff turnover, though in the last 18 months or so this has been less prevalent due to the economy. As a side note, one thing to be cautious about if you are in this situation is that the economy may be postponing staff turnover, even if staff morale is low. That may make for a big wave of staff changes as the economy improves.
Low Productivity
It’s simply not productive to have priorities change hour by hour or day by day. Staff are told “Do this. No, do that. No, do this other thing. No, do this again”. All the change in focus inevitably means loss of focus and less productivity.

Well if it’s that common, it should be easy to fix right?

Fixing this kind of problem is unfortunately easier said than done. The source of this problem originates at a couple of levels higher that the PMO and can only be fixed there. Yet project managers have the methodology to fix this.

Now, you may have seen software tools that promote the kind of functionality that will “automatically” resolve resource overload challenges. Every project portfolio management (PPM) tool has something in this category. However, no matter what tool you choose, you will need to do the core work with management if you want to solve this dilemma.

Whether or not you choose software to help you fix this problem, here is what you’ll need to do from a process standpoint:

If you want to prioritize projects, forget about just giving them a ranking or some number. Doing so just makes all the project sponsors crazy as they argue why their project should be a priority of 75 rather than 92. Instead, work with senior management so they agree on what business factors affect the importance of projects. Some examples might include:
- Return on Investment/Profit (an obvious one for private firms)
- Project risk (again pretty obvious)
- Technical competitivWheteness might be a little less obvious
- Client satisfaction
- Strategic advantage to the organization
- Reduction or avoidance of threat to the organization
Create a set number of answers for each business factor. Try to stay away from a score of 1-5 or 1-100 and instead go for a descriptive answer. It will be much more powerful if you can have the answer correspond to a measurement. For example, “Improve Customer Satisfaction by 10% as measured by our quarterly customer satisfaction survey
Now you’ll need to create a formula that scores the answers from the business factors. This is where software may be attractive.
Finally, you’ll need to weave in the cost of each project. You can think of cost in almost any denomination so long as all projects are measured the same way. So, total person-hours or person-days, total dollars or whatever. This will allow you to create a business factor score/cost calculation so you can determine which projects will give you the biggest bang for the buck.

Now, if you’re thinking you can do this in isolation and then present it ‘fait accompli’ to management, think again. Doing so will make you responsible for any project which is not priority number one, and that puts you no better off than you are already. The secret to success in this process is get senior management to define these factors themselves and to agree on the relative responses for each one. When that happens, the resulting levelled schedule is, by definition, doing the projects that are in the best interests of the organization first.

Project prioritization is often a part of project management that is avoided by senior management, but the impact in a tough economy of avoiding prioritizing can be significant. That’s why looking at project prioritization now may be timely. PMOs may find management more receptive than ever to participating in making this kind of process successful.

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The Project Manager’s Collaborating Conundrum

Written by Chris Vandersluis on April 21, 2010. Posted in Articles. 4 Comments on The Project Manager’s Collaborating Conundrum

PMCollaborationConundrum It’s the hot button lately in project management circles. How can teams collaborate? It’s not idle chatter. It’s been apparent for a long time that a project manager’s role is not just calculating a schedule from his hidden laboratory deep in the bowels of the organization. Now a project manager is expected to spend the vast majority of his or her time working with others. They may be negotiating with the clients or recruiting new team members or empowering and encouraging the team to be more effective or refereeing resource conflicts with resource managers. And that’s just one-on-one or with small groups. The project manager is also expected to speak publicly to the board or the media or the users or the team.

With collaboration being such a hot button, it’s not surprising that project management software publishers and consultants are happily explaining how wonderful it will be for clients to improve their collaboration tools. I get such requests on a regular basis.

So let’s pause a moment and just review what collaboration means and what implementing better collaboration entails. Dictionary.com has a couple of definitions of collaboration but the most useful to this discussion is: “To work together, especially in a joint intellectual effort.” Not too useful for practical purposes but the idea is to have people work together. Well, a project almost always involves people working together, so we know we’re off to a good start. What might team collaborators collaborate on?

A few categories of how teams could work together might include document management, meeting management, communication follow up, or working with virtual teams. Let’s tackle a few of these:

Document Management

One of the most popular things pointed to when talking about collaboration benefits is document management. In many project environments, moving documents around numerous participants in the project team can be a critical success factor. In high tech, these might be design criteria. In engineering, they might be architectural plans or engineering drawings. In bio-research they might be regulatory documents. It seems attractive to link these documents to task reports when doing project schedule reports, but the big benefits of this kind of collaboration process is managing the workflow of the document. Should this be part of your project management process along with schedule management? There are a couple of factors to consider. First of all, does your organization already have a document management system? Many large organizations do. If so, then going with the flow on a system that’s already deployed makes a lot of sense. Secondly, does your entire project team have access to it? This may not be so obvious. Many project teams extend beyond a single organization. If that’s the case, then setting up a parallel document management system for documents associated with the project might be more sensible.

Meeting Management

Meetings! Meetings! Meetings! They’re so common that many timesheet systems automatically include a meeting entry. (We get asked for one all the time with our own TimeControl timesheet deployments.) Having meetings is often collaboration, by definition, but how you conduct those meetings can make a big difference to the effectiveness of a project. Meeting management systems include numerous features such as agenda management, minute taking, meeting collateral management (such as reports that are submitted to be viewed by the participants), attendance recording and even virtual attendance for those who are out of town. With so many organizations having to curtail travel and even inter-office movement in order to save costs, and with so many project teams reaching outside the organization, an effective meeting management process and system can make a world of difference. Sometimes such meetings can have an immediate impact on the project including changing priorities, changing resource allocation, updating risks and progress information. Just being able to record promises made in a regular project review meeting and being able to recall that information instantly at the next meeting can revolutionize project progressing. But, does this mean that that the meeting management system should be integrated into the project scheduling system? Possibly. The first place to look is to see how the meeting management process is integrated into the project management process. Then look and see if there is an existing meeting management system and if that system is available to all your participants. It might be more important to have meeting management linked to document management than to scheduling.

Virtual Teams

More and more we’re seeing project teams being defined outside of the walls and even the corporate organization. Teams might include the client and sub contractors and even regulatory authorities from outside the organization and executive sponsors and resources from within the organization. The team may extend not just beyond the walls of the organization, but also extend across numerous time zones and even numerous countries. Just holding a telephone conversation can be a significant challenge if part of the team is just getting to work in the morning as another part is just leaving at the end of their day half-way around the world.

Empowering the virtual team to work as a team can be a significant challenge that has to be addressed early in the project lifecycle. Being able to distribute documents, record virtual meetings for review by others offline, update progress in multiple time zones and even just being able to deposit project deliverables and artifacts somewhere in a file management system that is managed and traceable, can make the difference between a project that works twice as effectively or half. I have seen such virtual teams hum along at a breakneck pace. One group half way around the world is delivering aspects of the project that are being reviewed by a team on the other side of the planet in time to be updated by the first group as they return in the morning. It can move so fast that it feels like around the clock development and that too can pose a challenge. When the pace of work is twice as fast as some team members are used to, the project can go off the rails in an awful hurry. Systems need to be twice as vigilant if the work is moving twice as fast, so deploying systems to allow that tracking to be done more effectively is essential.

Incident and List Management

There are so many bits of data that get generated during a project that having a single place to track them can allow many people to connect quickly and effectively. Lists and artifacts can be almost anything. They might include commissioning lists, deficiencies, bugs, corrective measures or even just lists of team members. Having such information readily available to all team members can be a blessing. I’ve seen a number of projects where integrating such list management into the project system and having that system available through the Internet improves the speed of managing the lists and identifying problems that must be addressed by other team members. Simple online list management can level the playing field quickly by allowing required intervention to be recorded so it reaches any member of the team at any level.

A process needs to be in place to prevent every team member from assigning incidents indiscriminately to executives, but the ability to do so can make a project tremendously more effective. These lists are rarely at the level of tasks that are managed in the schedule, yet they often are able to affect tasks in the schedule.

Communication with…Everyone

Effective communication is everything to a project manager but, when setting up your project environment, it’s worthwhile to try to determine what kind of communication is appropriate for what kind of information. Will you be checking your FAX every hour? Is that how you’d like to transmit documents? Do you want everyone copying everyone on every email? Can members dial in virtually or must they wait for physical meeting? Will you be updating information via SMS on a cell phone or on an application on a smartphone? How about instant messaging? Just because you can instant message someone on their phone will you use this as a primary source of communication? What information should require instant messaging and, if you’re going to use this, does everyone on the team have access to the same instant messaging system and network? Figuring out your communications strategy before you start your project makes a huge difference.

Collaboration is a way of life in today’s project management world. Most project managers and project management offices don’t need a do-everything project management system but hoping that collaboration will happen by default is a fantasy. A smart project manager will organize how they want collaboration to happen before the project starts, even when systems are already in place.

Getting everyone onto the same page early often makes the difference between staying ahead of the project or living in reaction mode trying to catch up until the project is done.

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The Keys to Key Performance Indicators

Written by Chris Vandersluis on March 24, 2010. Posted in Articles. 2 Comments on The Keys to Key Performance Indicators

Executives often ask me for the impossible and what they want is best exemplified by an often used phrase, “A sip from the firehose.” In most organizations today there is no shortage of data and in the project and portfolio management realm in particular we have a plethora of systems and processes that can generate data. However, no manager can possibly sift through thousands or even millions of records in order to determine what decisions they should make.

thekey1 The result is that most significant decisions about projects, including the decision to start the project in the first place, is made on an ad-hoc basis.

The technique to avoid this is well known. Organizations should choose “Key Performance Indicators” (KPIs) which will surface information critical to making those business decisions. But, how does one choose those KPIs? How do you know that the KPIs you’re using are producing the result you require? Let’s take a look.

Choosing KPIs

First of all, where do we look for the right Key Performance Indicator, and how will we measure it? These metrics will be used in a variety of ways. We can use these metrics to distinguish one project from another. We can use them in the project selection process, the stage gate process, the resource priority allocation process and the project review process. There is no limit to the number of things we could measure.

One place to look it through the main elements of PMI’s PMBOK (Project Management Body of Knowledge). In each section you might have possible measures that would lead to better management of the project.

In the Scope area, for example, you might have scope creep or scope change as a measure. In the Time area you might look at delays in the schedule. In the Cost area you might look at resource costs or Return on Investment. In the Communications area you might look at the timeliness of schedule updates or the status of project reporting. In the HR area you might look at Resource Variance or Resource Load/Overload or Resource balance. In the Risk area you might look at the volume of risk items and their severity or urgency and so on and so on.

Not every metric will make sense in every context. For example, in a private organization, projected Return on Investment might be a critical measure. In a public organization this might be completely irrelevant. There, citizen satisfaction or alignment with legislative requirements might be much more relevant.

Some of the criteria for a good KPI are as follows:

The KPI reflects some element of corporate strategy
So, measuring on-time delivery might make sense in most organizations, but where corporate strategy is more focused on quality or safety, focusing on on-time delivery might result in management making decisions that are diametrically opposed to the corporate mission.

The KPI is actionable
All too often we see organizations with spectacular dash boards containing lovely graphics and charts and, when we ask what action is supposed to happen if this indicator turns red or if the needle on that guage goes to the danger zone, no one knows the answer. The whole point of a measuring and reporting on a KPI is to ultimately take action.

The KPI should result in obtainable objectives
Creating a metric, which has no chance of getting out of the “red” and into the “green,” makes no sense. It results in urgent emergency action day after day after day and ultimately is self-defeating. The objective that the KPI represents (overload less than 110% of availability, for example) must be attainable.

The KPI should be measureable
It’s tempting to make KPIs which are wholly subjective, where someone just plugs in a number or a color. If this is based on a feeling rather than some empirical measure, the KPI typically has little value and yet the decisions made on the basis of the KPI may be just as significant as those based on other empirical measures.

The KPI should not be duplicated
Just because we have a dozen different ways to display late schedules, showing all those KPIs doesn’t add value. In fact, it can be confusing and disruptive.

And finally, the KPI and the actions associated with it should be understood by all decision makers. Having a common understanding among all the decision makers of what a particular measure and indicator means is critical to using KPIs effectively.

KPI Challenges

There are a number of easy mistakes that people doing this exercise for the first time face. Here are some of the most common:

“Great news, I have hundreds of KPIs!”
This isn’t great news at all. Remember, what we’re after is a sip from the fire hose. If you open the tap too far; if you let too much water through the hose, you’ll knock management from its feet and they won’t be able to absorb the information. Typically we look for a handful of KPIs. As Chris Iervolino, an expert in Business Performance Management (BPM) said, “Somewhere in the extensive negotiations of creating the KPIs, the ‘K’ got lost.” So, just because you can measure a thing, doesn’t mean it needs to be measured.

“Great news, we have only one KPI!”
Having too few KPIs is also not useful. There are always a couple of opposing forces and results that can be identified in the project management business, and the whole point here is to make business decisions. Those opposing forces need to be identified and displayed in some way.

KPIs are too subjective
There’s a strong incentive to invent KPIs for which there is no measure; no metric. The result is an indicator behind which is just a subjective decisions based on someone’s feeling or intuition. While many business decisions are made on a manager’s intuition, when we put subjectivity into a Key Performance Indicator, we take a subjective perspective and display it as an empirical or data-sourced result. The effect of this can be negative.

The KPI has questionable completeness or quality
Imagine that we have a Key Performance Indicator that shows our resource capacity. The graphic shows the organization’s current status of all work and all resource availability, and projects the expected over or under load of resources against our project and non-project tasks in the future. But the indicator only has current project data or the data is missing altogether. Imagine what business decision might be made on the basis of this indicator alone and how potentially damaging that would be. When KPIs are displayed, we always recommend that there is some assessment of the indicator’s quality and the completeness of the underlying data.

Wrap up

The great news about applying the Key Performance Indicator paradigm to project and portfolio management data is that there’s typically lots of great data to choose from and the nature of the project management process results in a lot of that data being of very high formalized quality. That’s perfect for a productive KPI exercise.

If you’re getting started on choosing your KPIs, the best advice I can give is to start small. Start with three or four indicators and get the measurements of them, the display of them and the actions associated with them right. The benefits of doing this can be profound and don’t worry, you can always expand the number of indicators in the future.

Happy measuring!

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