The Project Management Office in any business is often judged on the success (or otherwise) of the projects that it supports. Whether you’ve got a governance-based PMO or a supportive PMO, or some other flavor of PMO that works for you, you’ll have projects to track and report on.
Some of those projects will go well, and others won’t go so well. As a PMO leader, you should be aware of everything that’s happening so that you can help business decision makers identify the impact of project performance and make the right call with all the information they need.
But what exactly should you be tracking? Here are 5 metrics you can use to track the success of the work overseen by the PMO. These reflect on the PMO itself, too.
Percentage of Projects Delivered
At a very simplistic level you can track how many projects were started and how many have been completed successfully over the last period (ideally a year, but build up to that by monitoring month by month).
Alone this doesn’t tell you much, but over time you should hopefully see the number rise as more projects are started that are the right projects, so a higher percentage gets completed successfully.
You’ll have to do some work to identify what “successfully” looks like for you. On time, on budget and to the approved scope is a common definition but you might want to take it wider or leave it to gut feel.
When you have a pool of data to choose from you can start to draw conclusions from it. For example, it could be that a particular type of project has a particularly high failure rate. Knowing that, you can either improve capability in that area or plan for potential failure if you know it is more likely to happen.
Percentage of Projects Closed Prematurely
This is the opposite of projects completing successfully. This number should go down as your PMO gets more mature and the organization gets better at choosing the right projects to start.
Closing a project is not, by definition, a bad thing. It can happen as a result of business strategy change, a key change in leadership or something else. However, it does represent investment into a project that may not be realized if the project is stopped prematurely.
Percent of Benefit Realized
A mature PMO is instrumental in guiding programs to ensure that benefits are actually realized. But how much benefit is the company seeing at the end of every project?
Tracking the benefits in the business case against the actuals received will give you an indication of how good your business cases are! You might notice that benefits in one area are consistently delayed, even if they eventually achieve the business case goals. Perhaps another category of project always realizes lower benefits than planned. All of this is useful data that allows the PMO to show its worth in the interventions that follow.
Follow the trend, and look for areas where the PMO can step in, either to improve the production of business cases and make them more realistic or to help projects and programs build better solutions for benefit realization.
Over time, you should see this percentage go up. This will reflect the organization, and the PMO, getting better at tracking benefits, producing business cases and being realistic about what is achievable.
It’s also a useful measure for planning. If you know that 30% of projects do not achieve their expected benefits you can plan for that as a business. You might want to do 30% extra projects in order to achieve a certain benefit level, or juggle the business priorities in a way that will be most beneficial for you. While it’s never sensible to plan for 100% benefit realization, this data will let you know if you should be working on 80% or 50%: the two scenarios are quite different.
Projects that don’t start on the right foot are often those that struggle. They don’t have the correct level of buy in, or senior leadership support, or they don’t have requirements that are clear. All of these can contribute to project failure.
Set-up time as a percentage of overall project duration is an interesting statistic to measure. Projects that start too quickly might not have all the moving parts in place to be a success. Projects that dawdle and take too long to get started might suffer from that through the whole life cycle.
Measure the time from ‘idea’ being approved to be worked on to sign off of the business case. This will also identify administrative lag time that could be improved. If these decision points don’t fit with your life cycle, choose ones that do.
It will also help you plan more accurately for future projects when you have data to draw on. You’ll have a better idea of how long it really takes for a project to move through those first steps and get approval to execute.
Return on Investment
Are your projects giving you the expected return on investment? Tracking this is a relatively straightforward job of comparing actuals to the business case forecast. However, it’s incredibly useful because it helps you understand what is likely to happen on future projects.
You can better advise managers preparing business cases with the information you glean from what ROI is really like on your company’s projects. For example, there might be a certain category of project that delivers a higher ROI for you. The simple strategic decision would be to do more of those, but without the data that supports that conclusion you won’t be able to advise decision makers, so start collecting it as soon as you can!
In summary, having data is useless unless you do something with it. These insights should help you see where the business as a whole needs support. Target the projects with the sponsor who always struggles to deliver any benefit. Work with the areas who take forever to get their projects set up. By digging into the details, you can use this to improve performance overall, and specify where your PMO has delivered real value in helping move the organization on.