Best Practice | By Sam Miller | Read time minutes
Managers and project managers gauge the success of any project undertaken through a new project scorecard. In the development of this scorecard, relevant metrics will have to be pre-determined.
Most companies see the need to use scorecards in order to assess and measure how corporate efforts contribute to overall organisation objectives. These tools of measuring performance are deemed to be mandatory, especially with the implementation of new projects or tasks. Focus of corporate executives should not only be limited in scorecard development, but also in strategy implementation. Nevertheless, designing a scorecard that is most appropriate to an organisation is not an easy feat.
In designing a project scorecard, corporate executives should first ensure that operational plans implemented are consistent with the preferences and needs of the end clients. These plans as well as metrics identified should not contradict with each other. While in the process of project scoreboard development, corporate executives and managers are urged to follow the Balanced Scorecard management approach. This concept was introduced by David P. Norton and Robert S. Kaplan back in 1992.
This aimed at the assessment and evaluation of corporate activities in terms of overall strategy and vision. The use of the Balanced Scorecard approach involves focus on four sections, or perspectives as they are also called. These perspectives include the customer perspective, learning and growth perspective, internal business processes perspective and financial perspective. In the process of scoreboard design, five to six metrics are identified for each of the perspectives. There should be justification as to the choice of these selected metrics. The data derived from these metrics should be able to help managers understand how a new project is performing.
Moreover, these will also help them translate strategies into appropriate actions. For these metrics to achieve their purpose, they should be simple, measurable, and very straightforward. They should become a common language by which all members of the organisation should base their actions. Before deciding what metrics to use for performance assessment, managers and corporate executives should be able to identify the problem and company objectives. Prospective metrics to be used should be brainstormed and individually appraised.
Often times, managers have problems determining whether a new project that recently ended can be considered a success or a failure. With a project scorecard, managers should be able to do this with ease through the metrics identified, which would then function as a criteria or indicator for success. So, if the metrics show poor numbers then, the project is considered a failure.
Aside from using a new project scorecard, project assessment could also be done by asking for the opinion of the project client or sponsor. His reply should be based on whether or not initial objectives are achieved. The drawback of this approach is the fact that his response could only be one of two, "no" or "yes." There is no middle ground for this approach resulting to less reliability. By using multiple success criteria through a project scorecard approach, project managers will be able to effectively define and determine project success or failure.
If you are interested in a new project scorecard, check out this website to learn more about new project KPIs.