Cover design: © Wiley Cover image: © 2017 Dundas Data Visualization, Inc All rights reserved This book is printed on acid-free paper Copyright © 2017 by International Institute for Learning, Inc., New York, New York All rights reserved Published by John Wiley & Sons, Inc., Hoboken, New Jersey Published simultaneously in Canada No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923, (978) 750-8400, fax (978) 646-8600, or on the web at www.copyright.com Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748-6011, fax (201) 748-6008, or online at www.wiley.com/go/permissions Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with the respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose No warranty may be created or extended by sales representatives or written sales materials The advice and strategies contained herein may not be suitable for your situation You should consult with a professional where appropriate Neither the publisher nor the author shall be liable for damages arising herefrom For general information about our other products and services, please contact our Customer Care Department within the United States at (800) 762-2974, outside the United States at (317) 572-3993 or fax (317) 572-4002 Wiley publishes in a variety of print and electronic formats and by print-on-demand Some material included with standard print versions of this book may not be included in e-books or in print-ondemand If this book refers to media such as a CD or DVD that is not included in the version you purchased, you may download this material at http://booksupport.wiley.com For more information about Wiley products, visit www.wiley.com Library of Congress Cataloging-in-Publication Data Names: Kerzner, Harold, author Title: Project management metrics, KPIs, and dashboards : a guide to measuring and monitoring project performance / Harold Kerzner, Ph.D., Sr Executive Director for Project Management, The International Institute for Learning Description: Third edition | Hoboken, New Jersey : John Wiley & Sons, Inc., [2017] | Includes index | Identifiers: LCCN 2017022057 (print) | LCCN 2017030981 (ebook) | ISBN 9781119427506 (pdf) | ISBN 9781119427322 (epub) | ISBN 9781119427285 (pbk.) Subjects: LCSH: Project management | Project management–Quality control | Performance standards | Work measurement Classification: LCC HD69.P75 (ebook) | LCC HD69.P75 K492 2017 (print) | DDC 658.4/04–dc23 LC record available at https://lccn.loc.gov/2017022057 CONTENTS Preface 1: The Changing Landscape of Project Management 1.0 Introduction 1.1 Executive View of Project Management 1.2 Complex Projects 1.3 Global Project Management 1.4 Project Management Methodologies and Frameworks 1.5 The Need for Effective Governance 1.6 Engagement Project Management 1.7 Customer Relations Management 1.8 Other Developments in Project Management 1.9 A New Look at Defining Project Success 1.10 The Growth of Paperless Project Management 1.11 Project Management Maturity and Metrics 1.12 Project Management Benchmarking and Metrics 1.13 Conclusions 2: The Driving Forces for Better Metrics 2.0 Introduction 2.1 Stakeholder Relations Management 2.2 Project Audits and the PMO 2.3 Introduction to Scope Creep 2.4 Project Health Checks 2.5 Managing Distressed Projects 3: Metrics 3.0 Introduction 3.1 Project Management Metrics: The Early Years 3.2 Project Management Metrics: Current View 3.3 Metrics Management Myths 3.4 Selling Executives on a Metrics Management Program 3.5 Understanding Metrics 3.6 Causes for Lack of Support for Metrics Management 3.7 Using Metrics in Employee Performance Reviews 3.8 Characteristics of a Metric 3.9 Metric Categories and Types 3.10 Selecting the Metrics 3.11 Selecting a Metric/KPI Owner 3.12 Metrics and Information Systems 3.13 Critical Success Factors 3.14 Metrics and the PMO 3.15 Metrics and Project Oversight/Governance 3.16 Metrics Traps 3.17 Promoting the Metrics 3.18 Churchill Downs Incorporated’s Project Performance Measurement Approaches 4: Key Performance Indicators 4.0 Introduction 4.1 The Need for KPIs 4.2 Using the KPIs 4.3 The Anatomy of a KPI 4.4 KPI Characteristics 4.5 Categories of KPIs 4.6 KPI Selection 4.7 KPI Measurement 4.8 KPI Interdependencies 4.9 KPIs and Training 4.10 KPI Targets 4.11 Understanding Stretch Targets 4.12 KPI Failures 4.13 KPIs and Intellectual Capital 4.14 KPI Bad Habits 4.15 BrightPoint Consulting, Inc.—Dashboard Design: Key Performance Indicators and Metrics 5: Value-Based Project Management Metrics 5.0 Introduction 5.1 Value over the Years 5.2 Values and Leadership 5.3 Combining Success and Value 5.4 Recognizing the Need for Value Metrics 5.5 The Need for Effective Measurement Techniques 5.6 Customer/Stakeholder Impact on Value Metrics 5.7 Customer Value Management 5.8 The Relationship between Project Management and Value 5.9 Background of Metrics 5.10 Selecting the Right Metrics 5.11 The Failure of Traditional Metrics and KPIs 5.12 The Need for Value Metrics 5.13 Creating a Value Metric 5.14 Presenting the Value Metric in a Dashboard 5.15 Industry Examples of Value Metrics 5.16 Use of Crisis Dashboards for Out-of-Range Value Attributes 5.17 Establishing a Metrics Management Program 5.18 Using Value Metrics for Forecasting 5.19 Metrics and Job Descriptions 5.20 Graphical Representation of Metrics 5.21 Creating a Project Value Baseline 6: Dashboards 6.0 Introduction 6.1 How We Process Dashboard Information 6.2 Dashboard Core Attributes 6.3 The Meaning of Information 6.4 Traffic Light Dashboard Reporting 6.5 Dashboards and Scorecards 6.6 Creating a Dashboard Is a Lot like Online Dating 6.7 Benefits of Dashboards 6.8 Is Your BI Tool Flexible Enough? 6.9 Rules for Dashboards 6.10 The Seven Deadly Sins of Dashboard Design and Why They Should Be Avoided 6.11 BrightPoint Consulting, Inc.: Designing Executive Dashboards 6.12 All That Glitters Is Not Gold 6.13 Using Emoticons 6.14 Misleading Indicators 6.15 Agile and Scrum Metrics 6.16 Data Warehouses 6.17 Dashboard Design Tips 6.18 TeamQuest Corporation 6.19 Logi Analytics, Inc.: Dashboard Best Practices 6.20 A Simple Template 6.21 Summary of Dashboard Design Requirements 6.22 Dashboard Limitations 6.23 The Dashboard Pilot Run 6.24 Evaluating Dashboard Vendors 6.25 New Dashboard Applications 7: Dashboard Applications 7.0 Introduction 7.1 Dashboards in Action: Dundas Data Visualization 7.2 Dashboards in Action: PieMatrix, Inc 7.3 PieMatrix Overview 7.4 Dashboards in Action: International Institute for Learning 8: The Portfolio Management PMO and Metrics 8.0 Introduction 8.1 Critical Questions 8.2 Value Categories 8.3 Portfolio Metrics 8.4 Measurement Techniques and Metrics 8.5 Crisis Dashboards Index EULA LIST OF TABLES Chapter TABLE 1.1 TABLE 1.2 TABLE 1.3 TABLE 1.4 TABLE 1.5 TABLE 1.6 TABLE 1.7 Chapter TABLE 2.1 TABLE 2.2 Chapter TABLE 3.1 Chapter TABLE 4.1 TABLE 4.2 TABLE 4.3 TABLE 4.4 Chapter TABLE 5.1 TABLE 5.2 TABLE 5.3 TABLE 5.4 TABLE 5.5 TABLE 5.6 TABLE 5.7 TABLE 5.8 TABLE 5.9 TABLE 5.10 TABLE 5.11 TABLE 5.12 TABLE 5.13 TABLE 5.14 TABLE 5.15 TABLE 5.16 TABLE 5.17 Phase milestones, in PIEmatrix PIs (performance indicators) Pie charts PIEmatrix (application): To Do list page executive dashboards overview Portfolio Metrics page portfolio views process authoring process interconnections project planning project view PIEmatrix, Inc Pilot run Planning, with PIEmatrix PMB (Performance measurement baseline) PMBOK® Guide (Project Management Body of Knowledge): and benchmarking and best practices health check questions from knowledge areas in and methodologies metrics management and planning mistakes and project management history and project value management references in templates and traditional metrics and triple constraints PMIS (project management information systems) PMO, see Project management office PMPs (Project Management Professionals) Pointers (dashboard indicators) Porter, Michael Portfolio management PMO crisis dashboards critical questions addressed by measurement techniques portfolio metrics value categories for projects Portfolio PMO metrics Position, in dashboard design Power, of metrics management system Practical KPIs Price, value and Prioritization of constraints Priority states, in PIEmatrix “Pro-Active Metrics Management” (TeamQuest, Inc.) Problems, crisis vs Process authoring Process boxes, PIEmatrix Process interconnections Product development Progress, viewing in PIEmatrix Progress bars Project audits Project-based metrics Project completion, graphing Project complexity factor, graphing Project failure Project health Project management benchmarking and metrics for complex projects and CRM and defining project success engagement executive view global governance in maturity and metrics methodologies and frameworks paperless stakeholder-specific approach traditional view vs value-based value and, See also Project value management Project Management Body of Knowledge, see PMBOK® Guide Project management information systems (PMIS) Project Management Maturity Model Project management methodologies Project management office (PMO) See also specific companies, e.g.: Churchill Downs Incorporated audits by benchmarking by future for for portfolio management, see Portfolio management PMO responsibilities of value metric selection by Project management process metrics Project Management Professionals (PMPs) Project managers: executive view of future for responsibilities of role of skill set of Project performance measurements Project planning, with PIEmatrix Project quad Project success, see Success Project support dashboard Project value baseline Project value management Project view (PIEmatrix) Qualitative assessment Quality, value and Quantitative assessment Quantitative KPIs Radar charts Rasmussen, Nils Recovery life cycle audit phase execution phase negotiation phase restart phase tradeoff phase understanding phase Recovery Project Manager (RPM): mandate for responsibilities of selecting Relevant characteristics: of dashboards of KPIs Reports Restart phase (recovery life cycle) Results indicators (RIs) Return on investment, see ROI Reviews, of metrics RIs, see Results indicators Risk management: crisis management vs value metrics and Risk metrics, graphing Risk states, in PIEmatrix ROI (return on investment): for dashboards for PMOs in value measurement Roll-ups RPM, see Recovery Project Manager Sarbanes-Oxley Law Schedule Performance Index (SPI): graphing metric for and KPIs Schedules, viewing in PIEmatrix Scope boundary Scope creep and business knowledge and business objectives causes defined dependencies Scorecards Scrolling, on dashboards Scrum techniques Secondary success factors Security, of metrics management system Service Level Agreements (SLAs) “Seven Deadly Sins of Dashboard Design” Shakespeare, William Simplicity, in dashboard design Size, in dashboard design Skill set, project manager’s SLAs (Service Level Agreements) Small companies, metrics in SMART Rule Smoldering crises Soft value metrics See also Intangibles Software development industry Spence, Colin SPI, see Schedule Performance Index Sponsorship Spreadsheets Square pie charts SRM, see Stakeholder relations management Stakeholders: classification of customizing project management for dashboard design for needs of defined educating, about KPIs KPI metrics and KPI selection by role of and value-based metrics in value-driven projects Stakeholder analysis Stakeholder debriefings Stakeholder engagement Stakeholder identification Stakeholder information flow Stakeholder mapping Stakeholder relations management (SRM) agreement of stakeholders benefits of cultural issues in failure in processes of and roles of stakeholders Step descriptions, PIEmatrix Strategic dashboards Stretch targets Success See also Critical success factors (CSFs) defining metrics for defining redefining and value Success-based metrics Sudden crises Supporting analytics, dashboard Symbols, for dashboards Tables Tactical dashboards Targets: for KPIs for value metrics Target audiences TeamQuest, Inc.: “Metrics Dashboard Design” “Pro-Active Metrics Management” TeamQuest Accelerators TeamQuest ActiveMetrics Technology Telecommunications industry Templates, dashboard 10/80/10 rule 3-D charts Thresholds, in dashboard design Time, in definition of success Timelines, in PIEmatrix Timeliness, of KPIs Timestamps, dashboard Timing, of value measurement Titles, in dashboard design To Do list page, PIEmatrix Toll gate process Tradeoff phase (recovery life cycle) Tradeoffs Traditional metrics Traditional projects Traffic lights, on dashboards Training, KPIs and Trend icons Trigger points, KPI Triple constraints Uncertainty (term) Understandability, KPI Understanding phase (recovery life cycle) Usability, of dashboards Users: adoption of dashboards by in dashboard development/design and dashboard flexibility dashboard requirements of of metrics management system processing of dashboard information Validation, of dashboard design Values Value: categories for projects defining identification of and leadership measurements of of metrics and quality/loyalty and success Value at completion (metric) Value attributes Value-based metrics creating and crisis dashboards customer value management and failure of KPIs/other metrics forecasting with graphical representation of industry examples and job descriptions leadership and value measurement techniques for in metrics management programs need for presenting in a dashboard and project health project management value selecting and stakeholders success and value traditional view of project management vs and value identification Value baseline Value conflicts Value-driven projects Value management (VM) See also Customer value management; Project value management baseline equation for Value measurement methodology (VMM) Value Performance Framework (VPF) Value-reflective metrics Value targets Vendors, for dashboard design Views, on dashboards Visualization components, dashboard Visualization rules, dashboard VM, see Customer value management; Project value management; Value management VMM (value measurement methodology) VPF (Value Performance Framework) Weasel words Weighting factors, for value metrics Wireless dashboard Work breakdown structure WILEY END 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Changing Landscape of Project Management 1.0 Introduction 1.1 Executive View of Project Management 1.2 Complex Projects 1.3 Global Project Management 1.4 Project Management Methodologies and Frameworks... author Title: Project management metrics, KPIs, and dashboards : a guide to measuring and monitoring project performance / Harold Kerzner, Ph.D., Sr Executive Director for Project Management, The... Project Management Maturity and Metrics 1.12 Project Management Benchmarking and Metrics 1.13 Conclusions 2: The Driving Forces for Better Metrics 2.0 Introduction 2.1 Stakeholder Relations Management