How Projects Affect Enterprise Metrics, Indicators and KPI's
In any organization, projects affect the hierarchical set of metrics, indicators and KPI's in three ways: projects create new temporary and new permanent metrics, and projects modify the values of existing metrics.
1. New temporary metrics are metrics and indicators that are associated with project execution. Their lifecycle is limited to the project's 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 new metrics that will come into existence once the project's outcome or results 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 targeted variations justify the business case for the project. Monitoring these key indicators provides for the quantification and understanding of how well the project is fulfilling the business case for which it was intended.
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).
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