Measuring Project Performance by PMOs

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Almost every project manager comes across such an issue in his or her career at least once or more than once. He or she is given the responsibility, by the core management, to report the current performance level of the project. The project manager spends several hours entering phase related details into whatever PM software they are using. He or she then estimates the percentage of completion. In several cases, the status report needs to be submitted on a daily basis. But things become quite difficult on a regular basis for a project manager in a normal scenario. He or she, in the end, finds out that submitting daily accurate performance reports can be quite difficult. The difficulty arises from the fact that he is busier in improving project performance. So there is hardly any room for reporting after a hard day’s work.


When any company invests money, resources and time into a certain project, the main concern is the level of ROI it will be getting from a project manager and his or her team. The project manager is responsible for ensuring the project’s scheduled completion. He or she also needs to ensure that the project remains well within the preset budget limit. The project manager gets a considerable amount of visibility with project performance measurement. He or she can use this visibility to ensure that the project is going on as planned. He or she also ensures that the original plan of the project is working according to the expectations of core management. This performance visibility acts as an alarm system if the project goes off course in terms of timeline or budget. The project manager then needs to bring the team back on course with extreme caution.

A project manager, or a PMO, is responsible for maintaining a satisfactory performance level of the project. He also needs to ensure that every phase of this performance is reported and recorded with care. He or she is also responsible for ensuring an achievable level of performance reporting. The process needs to be simpler and easier to follow, so that it does not become an extra burden for the PMO. A PMO needs to define the proper work package size in the WBS, or better known as work breakdown structure, with extreme caution. A few set standards are followed to complete this responsibility. You need to decide on the standard that best suits your project type and act according to the needs of the project.

A PMO should also follow a fixed standard which is used to apply for credit for work already performed by the team. The standards used in normal circumstances are as follows:

SV (Schedule Variance) – If the value of SV is ZERO, the project is termed as ON SCHEDULE or ON TIME. If the value was more than ZERO, it is termed as AHEAD OF SCHEDULE, as it is earning a higher value than the original plan. If it is less than ZERO, then it is termed as BEHIND SCHEDULE, or DELAYED

CV (Cost Variance) – If the value of CV is ZERO, the project is termed as ON BUDGET. If the value was more than ZERO, it is termed as UNDER BUDGET, as it is earning a higher value than the original plan. If it is less than ZERO, then it is termed as OVER BUDGET, as it is earning less value.

SPI (Schedule Performance Index) – If the value of SPI=1, then project is ON SCHEDULE. If SPI<1, then project is BEHIND SCHEDULE. If SPI>1, then project is AHEAD OF SCHEDULE. Any project that performs or functions perfectly should have an SPI value closest to ONE.

CPI (Cost Performance Index) – If the value of CPI=1, then project is ON BUDGET. If CPI <1, then project is OVER BUDGET, and costs need to be controlled. If CPI >1, then project is UNDER BUDGET. Any project that performs or functions perfectly should have a CPI value closest to ONE.

The thresholds of these values, at which you will be alerted in case of any change, needs to be set by you at the very onset. Let us look at a few examples. If SPI=0.9, then the schedule of the project will change to a yellow status, which means the project is behind schedule. If this fall continues, then it will become a red status. You can also calculate additional earned value if you detect any errors with the schedule or budget of the project. Thus will give you a much clearer picture of the problems your project might be going through, if any. You need to remember one simple thing. Measuring the performance of the project in an effective way is a very important part of the entire project management process.


project management authorJenny Brown is a Content Marketing Manager and Product Specialist at GreyCampus with six years rich experience on professional certification courses like Project management and Bigdata.

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