Unlocking Project Success : Beyond traditional metrics

Globally, approximately 50% of projects fail to meet their objectives due to factors such as volatile environments and inadequate innovation in project management practices(1). For every $1 billion invested, $122 million is wasted due to poor performance(3).

Studies show that 74% of IT projects face significant challenges, with 28% failing outright, often due to incomplete requirements, poor leadership, or lack of executive support(2,3). Additionally, 50% require material rework, and up to 25% fail to deliver a return on investment (ROI)3.

What this means is that it is not enough to just execute a project on time and budget within scope, but rather determine if it delivered intended value or outcome for which it was undertaken.

What is project success?

While each project has its own context that determines what value the project will deliver, it is important for everyone to have a common understanding of project success. Therefore, PMI has come up with a holistic definition of project success(5) that can be easily understood by all stakeholder groups. The definition reads as below:

Project success is “delivered value that was worth the effort and expense”.

How can we measure project success?

The measurement of project success can generally be divided into two broad categories:

1. Execution-focused metrics – on time, within scope and budget
2. Outcome-focused metrics – customer satisfaction, commercial success, impact on productivity, etc.

Any determination of success is perceptual; evaluation of whether a project has delivered value that was worth the effort and expense may be perceived differently by different audiences.

To enable this, PMI has devised a metric called ‘Net Project Success Score’ which is a weighted average of key performance indicators (KPIs) and stakeholder perceptions to gauge a project’s overall success.

Formula:             

NPSS = (Stakeholder Perception Score * Weight) + 
              (Value Delivered Score * Weight) + 
              (Other KPIs Score * Weight)

Example Calculation:

NPSS for a sample project = (90 * 0.4) + (85 * 0.3) + (95 * 0.3) = 89, where 90, 85, and 95 represent scores for different factors (e.g., stakeholder perception, value delivered) and 0.4, 0.3, and 0.3 are their corresponding weights.

• Stakeholder Perception: This assesses how stakeholders (customers, executives, employees) perceive the project’s outcomes and satisfaction levels. 
• Value Delivered: This evaluates whether the project delivered the expected business value, ROI, and met its targets.
• Other KPIs: Depending on the project and organization, other KPIs like budget adherence, on-time delivery, and resource utilization can be included.

How can we increase chances of achieving higher success rates?

Applying three categories of measurements can particularly help in increasing project success rates.

1. Define success criteria upfront – align all stakeholders on a common set of success criteria and keep them aligned throughout the project.
2. Measurement system to align and guide decisions – This is required to determine how the project is performing and take decisions that will help steer the project to its goal.
3. Show progress toward value delivery – It is essential to consistently record measures data and compute metrics to determine project performance

Introducing MAAP Framework

The MAAP measurement framework has been designed to consider success criteria, value delivered and KPI metrics to assess project health.

The framework analyzes the current state of the project and helps the project team determine which areas (scope, quality, schedule, risk, resources, etc.) need attention and focus their efforts in that direction to stabilize the project.

For e.g. if quality is weak, team is guided to address defects and complete features that customer(s) can review and gain confidence on the progress. These directly reflect on improved customer satisfaction and assurance that project will meet the stated objectives.