46 Key Indicators For Successful Portfolio Management

A portfolio can be defined as a group of related or unrelated businesses, projects or programs managed by a single management executive. Based on this definition, are you or your business managing portfolios of projects or businesses?

What key indicators are you using to manage them? An extensive study on portfolio management was completed and published in July 2014 by research team RT303 of the Construction Industry Institute. In this study, the research team identified 46 separate indicators that should be regularly monitored by a portfolio manager.

A few weeks ago I wrote about the 23 Questions To Improve Project Delivery. In this post I listed 23 questions that a portfolio manager can ask project managers to better understand the health of the projects in their portfolio. The post today takes a higher level approach and identifies the key indicators that a portfolio manager should be monitoring every month. These key indicators can also be used to generate your custom set of questions as you take a deep dive into your portfolios and projects each month.

Listed below are the 46 key indicators for portfolio management that were identified by the CII RT303 team.

Schedule:

  • Number/ Percent of Milestones Completed (or Missed) vs. Planned
  • Number/ Percent of Projects on (or behind) Schedule
  • Total/ Average Days ahead of (or behind) Schedule
  • Schedule Durations Compared to Benchmarks (average for portfolio)
  • Number/ Percent of Projects with Schedule Durations Longer (or Shorter) than Benchmarks

Cost/Cash Flow:

  • Actual Cost-to-Date and Revised Forecast vs. Planned (Monthly and Cumulative)
  • Cost Variation (Monthly and Cumulative) – at project and portfolio level
  • Estimated Completion Cost vs. Original/ Current Budget
  • Number/ Percent Projects within (or over) Budget
  • Total Portfolio Cost vs. Budget
  • Project Cost Estimates vs. Benchmarks (average for portfolio)
  • Number/ Percent Projects with Costs Higher (or Lower) than Benchmarks

Safety and Environmental:

  • Safety and Environmental Incidents (First Aids, Recordable Injuries, Days-Away-From-Work Injuries, Spills, Releases, etc.)
  • Incident Frequency Rates
  • 12-Month Rolling Average of Incident Rates
  • Number of Environmental Permits Outstanding
  • Near Misses
  • Proactive Safety Activities (Documented Audits, Job Safety Analyses, Hazard Identifications, etc.)

Change Management / Scope:

  • Number of Requests for Information (RFIs)
  • Total Number of Scope Changes
  • Total Cost of Scope Changes/ Change Orders
  • Total Changes as Percent of Original Approved Budget
  • Total Value or Percentage of Estimate Omissions

Resource Allocation:

  • Project Team Member Turn-Over
  • Planned vs. Actual Engineering/ Construction Hours
  • Planned vs. Actual Resources (human resources (Full-Time Employees), equipment, etc.)
  • Capital Efficiency (Value of Projects Managed) per project manager
  • Percent Utilization of resources (e.g., Project Team Members, equipment)

Process / Supply-Chain:

  • Actual vs. Planned Number of Purchase Orders/ Contracts Issued
  • Number/ Percent of Late Deliveries
  • Bid Amounts as Percentage of Engineering Estimates
  • Locally-Sourced (High Value Offshore, Minority Participation, etc.) as Percentage of Total Procurement

Quality:

  • Average PDRI Score at Project Funding (or Earlier Stage Gates) (as a potential leading indicator of project quality)
  • Number of Defects (Welds, Test Failures, etc.)
  • Percentage of Rework
  • Number/ Percent of Projects Completed with (or without) Significant Issues
  • Number of Deficiencies Open for More than Target Resolution Period

Risk Management:

  • Summary/ Status of Known Risk Issues and Mitigation Plans
  • Risks Mitigation Actions Completed for Reporting Period
  • Risks Eliminated (or Unrealized) during Reporting Period
  • New or Emerging Risks Identified during Reporting Period

Client Satisfaction, Other:

  • Customer Satisfaction Index
  • Training and Development Status
  • Number (or Percentage) of Projects in Each Project Stage
  • Number or percent of projects in each project phase
  • Overall Portfolio Performance Index = Number of Successful Completed Projects* / Total Number of Projects Planned to be Completed

* Success is defined by meeting predetermined Schedule, Cost, Safety, and/or Operability targets

If you do not already have a system for managing a portfolio of projects, I would suggest going to CII’s website and purchasing the RT303 – Managing a Portfolio of Projects research report and findings and implementing a similar system in your business.

 

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