How to measure Project success?

How does one know if a project is going on successfully or not? It will not be very smart to wait till the project is completed to measure success of failure. Project performance has to be measured and tracked regularly so that issues can be handled appropriately.

Project performance is primarily measured on time, cost and scope. It means the ongoing project tasks are compared against the scheduled tasks. The cost of tasks undertaken is compared with the budgeted cost. The features and functions built in the solution are compared with the scope objectives to check if the application delivers as per defined scope.

It is not easy to orchestrate a project. There are conflicting objectives of various stakeholders that scream for attention. At the same time, project has to be successful in terms of cost, time and scope as well as when measured by other parameters.

At the time of project planning, key stakeholders need to decide what should be evaluated to measure the success of the project. This will help in identifying Key Performance Indicators (KPIs) that can be used to measure project performance. Here are some measurement indices that can be used to track the project.

Project Performance Measures

– Earned Value Management (EVM) – EVM is a technique used to track progress of a project in terms of schedule and cost. It aims to forecast the future performance of the project. It is an essential project tracking concept in a majority of software projects. The following measures are tracked and compared as part of EVM –

– Cost Variance (CV)- CV measures project performance in terms of how much the project is over or under the budget.

If CV is a negative value, it means the project is over budget and if it is a positive number, the project is under budget.

– Cost Performance Index (CPI) – It shows how efficiently resources are being utilized.

A CPI value above 1 tells that resource utilization is efficient. CPI value below 1 indicates resource utilization is not efficient.

– Schedule Variance (SV)- SV measures how much ahead or behind schedule the project is in terms of cost.

A positive value indicates that the project is ahead of schedule and a negative indicates that it is behind schedule.

– Schedule Performance Index (SPI) – It shows how efficiently is time utilized in the project.

If SPI>1, time is being used efficiently. If SPI<1, time is not being used efficiently.

Financial Measures

Companies undertake business to make profits. Financial measures help to find out whether a project has been financially viable or not.

– Return On Investment (ROI) – ROI is a measure of cost-benefit analysis. It measures the cost of a project versus the returns from the project and expresses it as a ratio.

Quality Measures

Project Quality Management

It is not enough to complete the project on time within budget. The project deliverables must satisfy the quality objectives as well. Quality should be measured regularly by testing functionality and performance. Defects found early in the project lifecycle are easier and less expensive to fix compared to defects found towards the end of the project lifecycle. There are various measures of quality of the product developed.

– Cost of Quality – It is the money that the company loses because of the errors in the application developed and the steps taken to rectify and test the errors. It includes human resources cost, overhead costs and material costs incurred in testing, rework, replacing, managing complaints and in intangibles like customer frustration and loss of reputation.

– Defect Rate – It is a useful parameter to measure the quality of code. Defect rate measures the number of defects injected in the software. It can be measured as number of defects per function point or number of defects per module. The defect rate should be lesser in each subsequent release which indicates the quality is improving. The defects can be classified on the basis of severity and the quality is considered better if the high severity ones are less than the low severity ones.

– Customer Measures – One of the best measures of project success is customer satisfaction. If the customer is satisfied with the deliverables and his/her expectations are met, the project can be considered a success.

– Customer Satisfaction – Customer Satisfaction can be measured using a combination of hard and soft parameters. Measures can include customer survey results, increase in market share, more/less business from existing customer and number of complaints.

There are many other measures like Staff Productivity, Average Time to repair defects, Responsiveness in Post-Delivery Stage etc. The project management measures should be selected by the organization as per technology, process, industry and client requirements and implemented