What role do benchmarking metrics play in project management? In the broadest sense, benchmarking is what gives an organization the ability to test and evaluate PM processes and methodology, project outcomes, and the performance of individual project managers. Without this type of oversight, it’s still possible to recognize that projects are failing, going over budget, and running past schedule – you just won’t be able to figure out what to do about it.
Laurence Nicholson published a report on benchmarking in PM World Today back in 2006 that is still relevant and useful now. You can read it free online here. The focus is geared somewhat toward IT projects, but the same principles Nicholson discusses can easily be adapted to any industry. Here are some takeaway points:
- Not every organization can or should use the same metrics for project analysis. Failing to correctly match metrics with real life objectives simply leads to wasted resources with no added value to show for it.
- Using a balanced blend of subjective and objective metrics makes sense. Easily measurable factors like cost and time should be weighed alongside more subjective factors like customer satisfaction and team cohesion.
- Metrics may be used to determine whether processes are consistent or if there are areas where approved methods are not being used.
- Staffing levels and employee engagement are critical to the success of projects. PMs should understand HR metrics that impact project performance and collaborate with HR to increase the quality and availability of project team members.
- One of the most often overlooked aspects of project management benchmarking is its role in determining if projects are aligned with larger organizational goals.
Who Uses Project Benchmarking?
Large business enterprises and government agencies that have a well developed project or program management process are more likely to make effective use of benchmarking. Such organizations can be a great resource in providing examples of how benchmarking works. For example, the Department of Energy collaborated with the National Academy of Sciences to publish a report on its own project management processes for educational purposes. Here are some highlights:
- Many projects can be broken down into a series of critical decision points requiring approval: mission need, system requirements and alternatives, baseline, implementation, and transition to operations. Benchmarking done at each of these junctures can aid in appropriate decision making.
- Goals should be clearly defined, actionable, and measurable. They should have their origin at the organizational level and flow down to the PM level. To aid in goal alignment, similar performance metrics should be used to measure whether goals are being met at both an organizational and project management level.
- Data collection is most effective when centered on known sources of accurate, repeatable, and verifiable information (not discounting the fact that subjective data should also be collected and used in benchmarking).
- Feedback systems should be in place to promote continuous improvement of all aspects of project management from processes to results.
- Benchmarking should be cumulative so that multiple projects can be compared and evaluated to identify larger patterns of performance.