Most project metrics such as time, budget adherence and alignment with business goals are relatively easy to measure. Of the other key metrics in the project environment, productivity is often the trickiest to get a grip on. It also happens to be one of the most important performance metrics in an organization.
Here are some of the key aspects to consider for effective productivity measurement:
Making skill & competency-based assignments
Measuring productivity could get very subjective without a competency framework. When work is assigned to resources based on their skills and competency, productivity measurement gets a lot more structured. This framework can then be applied to different levels of complexity in the project and productivity can be measured at different competency levels. By taking this approach, organizations can do away with the “one size fits all” philosophy and bring a great degree of objectivity and accuracy to productivity & performance measurement. This can also help managers identify specific productivity issues and take corrective measures such as right skilling or process re-engineering.
Measuring utilization & efficiency
Productivity is a direct reflection of how well the available resources are utilized and how efficient they are. Utilization rate is typically used for strategic decision making on whether capacity is higher or lower than optimal, while efficiency is a tactical measure of how well the given resources (labor and raw material) are being used. Adding resources means a capital expenditure that could have a direct impact on ROI. On the other hand, overutilization could mean an added burden on existing resources which could seriously impact quality and project timelines in the long run. Managers, therefore, need to have complete visibility and control over these parameters to deliver on organizational productivity metrics.
Measuring time spent on the project vs. non-project activities
With complex projects and scenarios where multi-location teams are involved tracking actual time spent on project related activities could prove significant in measuring productivity. There are a number of organizational activities that take up time and could have an impact on resource utilization and efficiency. Managers, therefore, need to keep a tab on time spent by resources on project and non-project activities, so that they can plan capacity, work allocation, and productivity targets. Insights from these measurements could also lead to process improvements that help improve productivity levels.
Productivity is not a single-factor measurement. By changing a single parameter such as ‘output per person’ you can achieve incremental productivity only to a certain extent. To be effective, productivity measurement should be based on an index that weighs in the importance of each parameter and then tracks and aggregates them. To measure productivity objectively, organizations also need to equip managers with comprehensive project management tools that provide advanced resource management capabilities.
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