Key Performance Indicators
Even the best-organized project can still go awry, this is why it is important to continuously observe key performance indicators to ensure your project is on track. Now that your project is well organized you can use the time you’ve saved to focus on the key points of a project to ensure that your project is on track and within budget. Additionally, you can also view key points to ensure your company is on the right track.
Cost Performance Indicator (CPI)
This engineering KPI metric is used to determine how well a project went from an engineering cost perspective. To do this, the CPI takes the budgeted cost of work performed and divides it by the actual cost of work performed. A value greater than one is favorable, as it means the project came in under budget. (CPI = Budgeted Cost of Work Performed / Actual Cost of Work Performed).
Schedule Performance Indicator (SPI)
Similar to the CPI mentioned above, this engineering performance metric measures the budgeted cost of work performed by the budgeted cost of work scheduled. This helps to indicate how far along a project is compared to the schedule, based on the project budget and work billed. (SPI = Budgeted Cost of Work Performed / Budgeted Cost of Work Scheduled).
Project Margin
Each project that a firm works on will have a certain level of assumed profit built into the fees. The project margin metric measures the profit of a certain project relative to revenue. There needs to be a fine balance of healthy profit, but not so much that clients feel they are being ripped off. (Project Margin = ((Project Revenue – Project Costs) / Project Revenue) * 100).
Ongoing Budget Usage
By having a robust awareness of the direct and indirect expenses associated with a job you can easily observe how much of the budget has been consumed at any given moment. A common practice is the use of a company Multiplier. A company multiplier takes into account the operating costs of the company and ensures that overhead and profit margin are considered when each direct cost affects the project budget.