Book Review: Project Management Metrics, KPIs, and Dashboards

    By: PDMA Headquarters on Aug 07, 2013

    Book Review: Project Management Metrics, KPIs, and Dashboards: A Guide to Measuring and Monitoring Project Performance

    By: Harold Kerzner, 2011. John Wiley & Sons, Hoboken NJ. 386 pages.                   Project Management Metrics

    Excellent in all aspects, this book is for managers and project managers who are serious about improving project success.  Written in clear language with easily understandable graphics, author and project management expert Harold Kerzner says measuring the right things, understanding what those things are, and knowing how to measure them creates project success.  His premise is that, “You cannot correct or improve something that cannot be effectively identified and measured” (p. ix).  He defines project management as, “an attempt to improve efficiency and effectiveness” (p. 9), and describes the goal of metrics as, “…not to provide more information but to provide the right information to the right person at the right time, using the correct media and in a cost effective manner”(p. ix).  

    The concepts the author describes are: “If it matters, it is detectable; If it is detectable, it can be measured; If it can be measured, it can be managed; What gets measured, gets done”(p. 340).  The problem is identified in “…the Chaos Report, which has shown us over the past 15 years that only about 30 percent of IT projects are completed successfully…the single most important cause: a failure in metrics management” (p. ix).  Current emphasis is on using the simple triple constraints of cost, schedule and performance which are grossly inadequate to ensure project success: “…decision making based entirely upon the triple constraints with little regard for the final value of the project may result in a poor decision” (p. 8).  

    A significant metric missing in today’s management of projects the author claims is tracking the expected value at the end of the project:  “The future of project management may very well be, metric-driven project management” (p. x).  A major driver for improved metrics is the increasing level of complexity in today’s projects.  “Today, we are in the infancy stage of understanding complex projects and the accompanying metrics.” (p. 10).  This complexity can take the form of project size, increasing technology, the number of interactions involved, longer duration, changing assumptions and scope:  “Complex projects are driven more by the project’s end value than by the triple or competing constraints [and they] tend to take longer than anticipated and cost more…because of the need to guarantee that the final result will have the value desired” (p. 11).  The solution requires tracking the initial assumptions because, “…having a fervent belief that the original plan is correct may be a poor assumption” (p. 7).  

    Kerzner claims that the difference between good and exceptional project management is quite large, but the difference between using project management and being good at it is much smaller.  He discusses using different frameworks and methodologies as basic skeletal conceptual structures as: “The individual segments, principles, pieces or components of the processes needed to complete a project” (p. 17). Frameworks focus on identifying the metrics needed; a methodology is an “Orderly structuring or grouping of the segments or framework elements” (p. 17).  These include the processes, activities, and tools required to accomplish a specific objective, including the metrics and Key Performance Indicators (KPIs) involved. In addition to KPIs, the project’s Critical Success Factors (CSFs) identify when the project is successfully complete measured by customer satisfaction.  To ensure this occurs, Kerzner says success and value must be defined jointly at project initiation.  

    Kerzner admits the challenges to his contradictory identification of when to identify Critical Success Factors.  He says that, “…one of the first steps…is to come to an agreed upon definition of success” (p. 83).  The accompanying graphic in the book, however, shows the development of project metrics and KPIs prior to defining the CSFs.  He agrees this view may be contrary:  “Some companies first define success in terms of CSFs and then establish metrics and KPIs to determine whether these CSFs are being met” (p. 83).  From this reviewer’s perspective with long experience as a project manager in a wide range of organizations, the latter view is most prevalent in practice and makes the most sense in project work.  

    With projects recognized more as part of the business, project managers need to become more business oriented to achieve needed project value—both business and other value. “This is particularly true for R&D and new product development, where as many as 50 or more ideas must be explored to generate one commercially successful project” (p. 134).  The author emphasizes that, “The ultimate objective of all projects should be to produce a deliverable that meets expectations and achieves the desired value” (p. 144).  So how can value be defined, measured, and achieved?

    Recent efforts are bearing fruit.  Business is now often managed as a series of projects measured in business terms instead of the triple-constraint.  To combine success and value Kerzner uses not just financial measures, but adds customer, internal and future success as part of the value added.  But these new ways of looking at success involve tradeoffs that require a new mindset.  “With traditional tradeoffs we tend to reduce performance to satisfy others [sic] requirements.  With value-driven projects, we tend to increase performance in hopes of providing added value, and this tends to cause much larger cost overruns and schedule slippages than with traditional tradeoffs” (p. 140).  Business value is what customers perceive as the worth, or the value they have paid for.  Again, the author emphasizes that much of what needs to be done to achieve project value lies within management’s attention to project metrics.  Management is often not committed, is over-optimistic, believes past project success is an indication of future results, and they can be blinded by past profits from previous projects.  

    Management’s role is to choose, approve and support the organization’s projects by identifying the true value needed and how to measure its achievement.  “Measuring and reporting customer value throughout the project is now a competitive necessity” (p. 152).  The final section on dashboards combines metrics and KPIs to show status and progress of projects using visual tools that Kerzner says are, “almost as indispensible as writing skills” (p. 198).  A project’s dashboard displays the needed information to managers on a single screen rather than as a detailed report.

    Gerald Mulenburg, PMP

    National Aeronautics and Space Administration (Retired) 



    Released: August 7, 2013, 2:43 pm | Updated: February 26, 2014, 9:11 pm
    Keywords: PDMA Blog

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