Measuring Project Value Results

PMI®’s PMBOK® 8th edition states what has long been true in most organizations: the PM is responsible for creating value from project deliverables. So, an early task for the PM is defining effective measurement criteria. Read on for tips on doing that.

Two things to keep in mind:

1. Outcome-based value measures and how you will compile them is vital to success.
2. Results can take months to appear, so success criteria need to support a long-term view.

What you can do:

• • Focus on the organization change that’s intended to create value. This sounds simple, but frequently project success measurements don’t get to the heart of why the project was launched. For example, the number of help desk calls is not a good measure for changes in customer issues. Help desk calls might increase due to a significant increase in sales, rather than more customer issues. Success measurements should relate to things like increases in sales, production throughput, or market share; decreased costs; or customer experience.
  • Use early indicators for longer-term value items. When project value takes a while to measure, like cost savings that show up in the next quarter results, identify other measures that indicate whether the project is on the right track. For example, track adoption rates of updated processes, or observe stakeholders using a new business process to see if efficiencies are being realized.
  • Convert subjective value items to objective indicators of success. In the PMBOK 8th edition, PMI places more emphasis on value that can’t be measured directly, such as an increase in market’s or community’s positive view of the organization. That increase can’t be directly attributed to an increase in sales of a product. Instead an objective indicator, such as a survey asking “Does the recent news on Company X increase your likelihood of buying products from them?”
  • Define interim measurement points. Suppose a project has an objective of decreasing costs by 10 % across 15 manufacturing lines. The complete measure of success can’t be determined until the improvements are implemented across every line. But you can get an early impression of cost reductions by measuring after the changes are made on the initial manufacturing lines.
  • Get sign-off for the measures, the process, and the expected timing for success. It is common practice to get sign-off on project success measures. Consider also getting sign-off on the processes for measuring value creation, and the timing for overall and interim project success data points. This reduces the risk of misunderstandings about when and how business value will be realized.
• Note: Whenever possible, define baseline values for your measurements so you can compare before and after values to see whether the success criteria were met.

Are the success criteria on your current project truly measuring what matters most? If not, try these tips for measuring value creation.

Coming Up

Production work on my Project Management Foundations course is moving along well. I’ll be reviewing the entire course in a couple of weeks with publication soon after that.

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