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Impact of Projects on Enterprise Metrics, Indicators and KPI's

The collective set of metrics, indicators and KPI's in any enterprise is impacted by projects in three ways. Projects create new metrics and affect existing metrics; and new metrics can be categorized as temporary or permanent.

1. New temporary metrics are metrics and indicators that are associated with project execution. Their lifecycle is the project duration. Examples include schedule performance index (SPI), cost performance index (CPI) and quality metrics such as current number of defects identified and/or fixed.

2. New permanent metrics are metrics that will start to exist after the project's outcome or results are delivered. Examples include performance of a software application, occupancy rate of a real-estate project, or utilization and maintenance metrics of an installed machine or equipment infrastructure. These metrics are typically tied back to existing higher level indicators as described in the next point.

3. Existing metrics and indicators are affected by a project's outcome or results. These are typically indicators whose variations justify the business case for the project. Monitoring these indicators allows for the quantification and understanding of how well the project is fulfilling the business case for which it was initiated.

For example, in the context of a classical Kaplan and Norton corporate balanced scorecard, such metrics and indicators can include incoming cash flows (financial perspective), employee morale and engagement or innovation ideas (learning and growth perspective), customer satisfaction or service issue closure metrics (customer perspective), and operations efficiency indicators (internal process perspective).

Continuous Performance Improvement - Metrics, Indicators, KPI's and Strategy

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