Fail to measure, fail to manage. How can you improve without knowing what works and what doesn’t? But, where do you start? Check our article to find out the crucial project management KPIs you must measure on construction projects.
Don’t know where to start when it comes to Project Management KPIs on construction projects? It’s understandable. Just tracking the number of KPIs is tough, let alone using them to track project success.
In today’s article, we break down 5 project management KPIs main indicators that you really need to track. Let’s get started.
Project Management KPIs (Key Performance Indicators) are designed to measure the project’s success by evaluating how well the team performs specific goals. They can focus on various aspects of the delivery, including financial metrics, customer satisfaction or project performance.
In general, key performance indicators can be split into two categories: quantitative and qualitative.
Quantitative focuses on the aspects of the project that can be taken from numbers like: cost variance, sales revenue or numbers of working hours. On the other hand, qualitative concentrates on more abstract aspects of the project, such as customer satisfaction with the service, etc.
No data, no KPIs. Before the project starts, establish the strategies for gathering, organising and storing the project information with your team.
Also, prepare Excel or a separate program to perform analysis. Seeing the trends and changes in numbers is the most crucial part of data management, so remember to keep the previous records (from the completed projects as well).
Connected topic: 5 Ways to Increase Control over Project Delivery.
Analysing data takes time. Especially when later, based on the numbers, you need to coordinate the next actions on the project. So if you do not find additional time in your schedule to analyse KPIs, you might follow one of two possible paths: interpret data wrongly or not study it at all. In both cases, your project suffers.
The more KPIs, the better control over your project delivery? Not really. You can set up 30 indicators for your project, but you cannot have absolute control of all of them with such a high number.
Start by considering 3-5 main goals that you want to achieve in this project and stick to them. Once you establish strategies for these specific KPIs, you can extend the list.
This project management KPI focuses on the difference between planned and actual project budget.
Since budget is crucial to successful project delivery, it is essential to keep track of spending. You should monitor this indicator regularly during execution. If the actual budget exceeds the planned one, it will be extremely hard to solve the situation.
The cost indicator is closely related to the budget KPI, as it shows actual costs vs. the planned ones. What differentiates it from the previous metric is that cost variance KPI is more detailed. For example, it should include cost categories to find good processes and weed out inefficient ones.
This metric helps you analyse the project execution performance by comparing the planned and actual schedule.
It allows you to understand better what is happening within your project and reorganise the following actions to assure the project’s completion before the deadline. Also, it can be a great lesson learned for future projects, as you will know which tasks require more/less time to perform.
This metric helps you better organise your team's work by comparing the number of employees working on the project vs. their available time. Did any risks occur in your project? This KPI allows you to react to the changes immediately, as you know which employees have additional time and can be moved to new activities.
Read this article and see how to improve project management with a different approach towards your assets: Construction Asset Management Is The Game Changer!
This project management KPI is possibly the most critical indicator for business owners, as it shows if your project was profitable.
You do this by comparing how much money you spent on a project to the financial benefits for the company. It differs from the budget variance, as here we also analyse internal costs and benefits, while in the first KPI, we consider rather the budget given by an external client.
Remember that you do not have to monitor and manage every detail from the very start.
Instead, focus on the main aspects that influence your project’s success, like being in line with the budget, ahead of schedule with the proper rate of return on investment and high customer satisfaction.
If you need support with your construction management activities, we are here for you! Archdesk has a customisable financial dashboard that gathers all the project data and presents it in easy-to-understand charts and dashboards. You can go straight to the analysis without stressing about non-included costs, changes or a new employee’s schedule.
Interested to learn more? Schedule a call with us to discover all the benefits of streamlined construction management.
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