Posted by: Gilad Lev-Shamur | November 22, 2009

PMO series – part 3: Building your indicators set

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This is the third part in the PMO series. It will concentrate on PMO measurements – indicators set which help the PMO staff to improve organization’s projects performance, improve the PMO performance and prove its value.

One of the basic rules of project management (and every other management role) is “You cannot manage what you do not measure“. Measurements and indicators help you to identify trends, recognize weak points and handle them. When all the information is in front of you (we will talk later how much is sufficient and how much is too much) you can reach the best decisions.

Many books and article were written about indicators, how to decide which is better, how to adjust targets and so. I decide to divide them to three categories:  

  • Indicators for the PMO start-up
  • Indicators for the ‘hard’  project data
  • Indicators for the ‘soft’ project data

Indicators for the PMO start-up

When developing the new PMO, you start with an assessment of the current project management statues in your organization, recognize the gaps, suggest solutions, ask for resources and in general, create the business case.

You create a plan  in order to close the gaps. For example:

  • Train 80% of the PMs in the first half of the year. Achieve 100% train gaol at the end of the year.
  • Reduce project cost overruns in 50% until the end of year. 

Now, in order to measure your success in implementing this plan, you track these numbers (% of trained PM in specific course for example) in short periods to find whether you are in the right way.

It is important to aligned start-up indicators with management. It can be done while presenting the business case. Focus of the major gaps and how you are going to measure them.

Now you should create another set of indicators to track the on going PMO operation. This indicators can be created during the start-up, but will also be valid during its regular operation:

Indicators for the ‘hard’  project data

These are the most common indicators. They mainly deal with basic projects data: cost, schedule, risks and so on. You can present them in various ways, the most known one is the green,yellow,red lights.

Here is an example of how you can score each project:

These indicators can be gathered to get the overall picture and create trends. You can see that in the grading table I put a subjective measurement of PM confidence. Although indicators are objective numbers, we think it important to insert the PM opinion. I know it is not the traditional way of creating it (we learned it from our IT department) but we think it present the actual statues of the project. 

This is just an example of handling with the ‘hard’ project data. No matter what you will do it will be much easier than the following section.

Indicators for the ‘soft’  project data

These indicators are about all the ‘soft’ data that the PMO should handle. I will just give few examples (and will post specific article about these indicators which create some challenge):

  • Customer satisfaction
  • PM professionalism
  • portfolio health

Few things to remember

  • Do not too exaggerate. Too many indicators will cover the real picture.
  •  Update your targets regularly.
  • Gathering data for indicators is boring task. If you will not use your indicators as a tool, you waste your time.

Indicators can fill several posts. This is just an opening for this subject. If you are interesting in something special, just let me know and I will deal with it.

Good luck!

Gilad

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