Data-Driven Project Management: The 4 Most Important Data Points to Look At
We live in the age of the data driven business. Every day, organizations capture large amounts of data and use it to make better decisions. This process has been adapted to different aspects of business such as customer acquisition and even project management.
Within project management software, there are many data and reporting features. You can measure everything from task completion percentage to how long it takes to finish projects. There’s a lot of information but what should you focus on and what should you ignore to get the best results from your tools?
This article takes a look at 4 data points you can focus on to get the most out of your project management. Keep in mind that every business is different and you may need to focus on more or other KPIs to get the entire picture.
On-time completion percentage
Any project manager worth their salt will create a timeline for completion of a project. This timeline takes into consideration the capacity of your team, the experience level of key members, and your ability to accurately measure the difficulty of the project.
The on-time completion percentage is especially important when you’re managing projects for clients. They’ll want to know how the project is progressing and when they’ll be able to take look at the final work or a draft. If the estimate is off, it’ll affect customer satisfaction as well as team moral.
When using your project management tools to understand this data point, there are two ways it can go. Either you have a high on-time completion percentage or a low one. You always want to get it as close to 100% as humanly possible.
If the percentage is high, it means your organization has a good grasp on what’s attainable with the resources available. You know what your team can accomplish, the scope of projects are well-defined, and project managers are able to prioritize tasks.
If the percentage is low, it may be indicative of an inability to assess the capacity of your organization and teams. Ask yourself if you need to invest in training for your staff, implement new processes to maximize efficiency, or better estimating project difficulty and scope. Project management software like Monday allows you to set completion times for your projects. Use those capabilities to track how often projects are late.
Budget Variance (cost variance)
Budget variance is one of the most important aspects of any project. It’s the actual amount of money you’ve spent on a project vs the amount of money budgeted. It should take into consideration all of the materials, human resources, and infrastructure required to bring a project to life.
In many project management tools like FunctionFox, you’re able to use the data and reporting features to track expenses alongside time worked. Prioritize using these features to understand how well you’re estimating budgets for your projects because it can have a marked impact on your ability to grow the business.
When your budget variance is low, it means you’re able to properly assess what the project requires. This is a sign of an experienced and competent organization. When the budget variance is high (usually when it goes over), it may be a sign that the project cost estimation process is flawed.
This project management tip takes many things into consideration. Are you asking clients or the owner of the project the right questions? Is the scope clear before starting the project or are there many changes made on the fly? If there are changes being made, is the estimated budget revised to accommodate them? These are just a few of the questions to ask when trying to understand the reason for high negative budget variance.
Another aspect to take into consideration when there’s high budget variance is how you can get it under control. If you have an unlimited budget, this might not be as important but most organizations don’t. This becomes even more apparent when you’re working with clients. A high impact first step you can take is mapping out all the necessary aspects of the project before starting. For example, if you’re working on developing a new software application you’d consider:
- Customer research
- Past customer interviews
- Prospect interviews
- Focus groups
- Low fidelity prototypes
- Customer stories
- Wire framing
- User flow mapping
- User testing
- High fidelity prototypes
- User testing
- Front end development
- Back end development
Creating an application is a large project but this example shows you how granular you can get when planning out projects. A straightforward process like this will ensure you have all the details needed to make an accurate budget.
Number of errors
The number of errors ties directly into the on-time completion percentage and budget variance. Depending on the nature of the project, it’ll go through multiple checks while in progress. This is done for a number of reasons but one of the most important is to maintain quality. Inevitably, some of the deliverables will be sent back because of errors.
Though mistakes are unavoidable, there’s an acceptable margin of error. Decide on a benchmark internally for how many errors are tolerable and start tracking it with your project management software.
How do you track errors with your project management software? If you’re a tool like ProjectManager, you can set up Kanban boards. As different aspects of a project near completion, the task card is moved across the board into relevant areas that reflect its status. For example, you may have boards called up next, design, development, review, and complete. If a board comes goes from development to review and then back to development, you know there was an error.
Keep track of the cards that make it to review but are sent back to be worked on again. At the end of the project (or a specific timeframe if the project won’t end), make a note of how many absolute errors there were and the percentage of cards or tasks that had errors. If you see a large number or percentage of errors then it may be a sign that there’s a problem with internal processes.
This project management tip helps you understand the quality of work your team is delivering. Keep in mind this may not be a reflection of ability. Instead, it shows you what is considered acceptable in the organization. If the number of errors is having an impact on budget variance or on-time completion then it’s important to implement systems that’ll reduce the opportunity for errors to occur.
The last data point to keep track of with your project management software is your ROI. It may not be immediately apparent whether or not a project is yielding fruits and it needs to be tracked closely to make sure it is.
It encompasses all of the other data points you track and gives you a single number that lets you know if your project can be considered a success. Of course, some projects are harder to measure like a branding initiative or a small feature that doesn’t increase or reduce usage.
For other projects like a new product line, client work, etc. it’s imperative that you track the ROI consistently because only 68% of projects meet their goals. Tracking is relatively straightforward when your project management software allows you to record time and expenses. Estimate how much time should have been spent and expenditure made at each milestone and map that against the actual figures. If you’ve spent too much at any milestone, take steps to correct course in real time instead of trying to salvage your ROI at the end of the project.
We’re living in an age where data is freely available and the most successful organizations are utilizing it at every touch point – including project management. Though you can measure almost everything, certain KPIs will give you data for making the best decisions.
This article has gone through 4 data points you should measure with every project. If any of them are off, you’ll know what kind of changes to make almost immediately. Add any data points are peculiar to your business to get a more holistic view. Also, make sure you choose a project management software that can meet all of your needs.