Qualitative to Quantitative - KPIs
Measuring the monetary impact of project management expertise can be tricky, but it's crucial for identifying your value and justifying investment in your services. In this series we’ll break down how to define, track, & analyze your impact on a project so you can start quantifying your value & communicating it to your clients.
Define Your Key Performance Indicators (KPIs)
KPIs are quantifiable metrics, set by project stakeholders, that track progress towards specific goals. It’s important to consult with your client(s) to determine what their personal KPIs are to make sure you are aligned with them. Below are some key financial construction project management KPIs that your clients will likely be familiar with:
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Measures the profitability of a project relative to its cost. For your client, How much value did you generate vs. how much did you cost? Did you give notice to purchase material during a cost dip? Did you identify somewhere the client was being double charged? Quantify what the cost could have been & record it.
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Indicates the percentage of revenue that exceeds the total costs. This number can be tough to get unless your client is fiscally transparent. Use your project details to research. If you’re building a hotel, how much revenue does a comparable one nearby generate? That can be used as a rough cost basis to calculate.
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The difference between the estimated and actual cost of a project. How much budget overrun did you have or how much was saved on the project? These numbers are integral to managing a project & determining its financial success & easy to obtain.
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The difference between the planned and actual project timeline. Finishing a project on-time can be the difference between huge profits & even bigger losses. Believe me, It’s not the end of a finger you want to be on… or do you? Project Managers can shine here the most. Beating the project deadline isn’t an easy task sometimes, but it’s an incredible way to really show your value. Keep track of expected dates & when tasks or projects are actually completed. scription
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The amount of money flowing into and out of a project. As business owners, having available funds can sometimes be a frequent concern. Predicting & stabilizing costs can be extremely valuable to your clients & well worth documenting. Did you make the call to purchase something in advance that the supplier could hold for you? If you’d have waited, how would that have impacted cash flow for the client?
*Once you identify all stakeholder KPIs you can better track, record, & present results. Which we’ll get to in the next few sections.
Using project management apps, sophisticated spreadsheets, or even a journal to record project data will be useful throughout & at the end of a project to quantify results. This type of data not only helps you manage projects, but will help you put actual numbers to the work you do everyday. In the next post we’ll look at data tracking & collection to help show your clients the real impact you’re having.