Understanding the Four Key Metrics Associated with Project Failure
When each of your projects is successful, your whole portfolio is successful. Yet many professionals struggle to ensure each project turns its highest profit. To thrive, you have to reduce project failures. This post shows you how to measure project failure/success and how to avoid failure and achieve high performance.
Performance is often judged by metrics (KPIs). Four common KPIs hit service providers:
1. Meeting Scope of Work (SOW)
2. Staying at or Under Budget
3. Delivering Work on Time
4. Sustaining High Client Satisfaction
These determine the success or failure of a project.
So, Why do Projects Fail?
Avoiding project failure requires knowing what causes the the project to fail in the first place. And projects fail for countless reasons. Among the most common are changing project priorities; overly complex projects; the requirement of buy-in and employee adoption (especially in IT projects); complications with client relations and changing client needs; and failure to communicate effectively among stakeholders.
Put Safeties In Place to Achieve High Performance
Recall the four metrics of project success: deliver the work promised (SOW); deliver work at the right price (budget); deliver work on time (schedule); and keep clients satisfied (good relations). Here is how to ensure each.
1. SOW: Deliver what you promised
Clarity helps you deliver the work you promised. Everyone should understand the work required of them and how their role fits into the larger picture of the project and final deliverables. With everyone on the same page, you can implement best practices, clear workflows, and tracking systems to ensure everyone completes his or her work. Project managers should track task completion, milestones, and deadlines to ensure the project is running smoothly and no piece is missing. Some PMs use methodologies for work completion, such as waterfall or SCRUM methods.
2. Budget: Don’t Overspend
The biggest cost for many services providers is their labor, or human resources. Projects go over budget when the wrong people are on the wrong projects. Planning resources strategically can avoid this. Companies who do this best are able to (1) match their people’s skills to their clients’ needs (2) assign resources who have availability to work on the project (3) see in advance the client need (predict demand) and assess in advance if they have the right people, and enough of them, to meet these needs. See how Mavenlink can help you plan resources.
3. Schedule: Deliver On Time
No one likes a late project. Attaching timelines, deadlines, and milestones to projects is critical to assessing in real time whether a project is tracking to be completed on schedule. One of the oldest tools to track project progress are Gantt charts, which let you see start and end dates, task dependencies, and milestones. Gantt charts have stood the test of time, having helped the Hoover Dam get completed ahead of schedule. But be sure to keep yours updated to avoid surprise endings.
4. Good Relationships: Keep Clients Engaged
Clients appreciate when you deliver work as promised, at budget, and on time. In addition, you can go extra miles to keep them happy. One of the keys here is communication. By updating your clients proactively — and being able to answer their questions — you will will build strong client relations where they feel engaged, because you have made the time to do so. This all starts with knowing project statuses in real time and having a reliable understanding of relevant information.
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Editors Note: The original version of this post was published in Janurary, 2016 and has been updated for accuracy and comprehensiveness.