PMO and Project Manager Alignment — Setting KPIs to Keep Project Managers on Track
When you oversee successful projects, your project management office (PMO) will also see success. Successful projects start with project managers aligned with business strategy, with KPIs that drive performance in the right strategic direction.
It’s up to your PMO to ensure projects deliver beyond coming in on time and on-budget. Projects must align with the broader business strategy, and you need project managers who understand that strategy to ensure it remains a consistent focus.
Solid KPIs that support business strategy are essential for your PMO to set. Here, we’ll look at why KPIs will align PMs with the business and end with some examples of KPIs you can set for PMs.
How can I use KPIs to keep my project managers aligned with business strategy?
You need measurable targets and metrics for your PMs to work towards. Projects need to deliver across a range of objectives, and having data-led indicators will also let you know if a project is going off-track early on.
Design KPIs to focus on the business’ goals and objectives, and you can make sure that your PMs are always aware of the broader strategic picture. When creating or recentring your project KPIs, make sure that they:
- Focus on outcomes and that those outcomes match up to what your office and organisation expect to deliver.
- Are measurable so that you can benchmark projects and ensure that you know what under- and over-performance look like.
- Accountable and assigned to specific people so that everyone knows how their work plays into the bigger picture.
- Iterative and able to be refined and improved over time as the business strategy evolves.
When your PMO also has a set of KPIs that align with the business strategy, you should be able to draw a line between expectations for your office and expectations for your PMs.
What KPIs can I set for my project managers to align with business strategy?
Every business will have a different strategy and range of objectives — along with profit. Social goals, upskilling, and expanding markets can all be part of what your C-suite is looking to achieve, and your PMO and projects can contribute to that.
Your KPIs will look different depending on your sector, but here are a range of indicators that you can consider adjusting and implementing.
- Schedule performance index (SPI) is a way to calculate how close the project is performing against the schedule that has been set and agreed upon.
- Cost performance index (CPI) measures how closely the project is aligned to the budget that your office has agreed with the project manager and other stakeholders.
- Stakeholder satisfaction can be measured through surveys and feedback, ensuring that expectations are being met throughout the project.
- Resource utilisation measures how effectively people and skills are deployed across projects, looking at downtime and individual delivery.
- Risk management can be measured by the risks that get identified, recorded, and mitigated during the lifetime of the project.
- Compliance with the frameworks and processes you’ve designed should automatically align with the business strategy since they are there to deliver precisely that.
There may be other metrics that you apply to your PMs’ work, such as environmental, social, and governance issues. This could include the amount of recycling or the number of hours spent training apprentices and interns.
Using KPIs to keep your project managers aligned
The KPIs you set for project managers should directly relate to what your office and the wider business want to deliver in terms of strategy and objectives. When the performance of each project draws a line to what the business wants to achieve, PMs will always have strategy in mind.
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