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Kerzner (2013) publicizes some a coherent case study that focuses on a Research and Development company. Using the case study, the author reveals the loss incurred by the company due to poor implementation and subsequent failure of various projects. Importantly, he points out that the detrimental performance of the project was not reported during the duration of implementation. Essentially, this was partly caused by the lack of considering the correct and enough number of metrics. As such, the Research and Development Company lost about twenty four million US dollars due to the mismanagement of the projects.
Whereas this situation prevailed, it is evident that the loss would have been prevented or mitigated if the managers had employed highly accurate systems of tracking performance. In this regard, the author indicated that the biggest challenge was the inclusion of metrics that focused on the financial aspects alone and disregarded the value-based factors. This scenario triggers the author to propose the necessity of coming up with other metrics that would ensure the communication and representation of the true project status. In this light,, therefore a committee comprising of departmental representatives was convened to discuss the concern of misreporting. Based on these findings and the case study, this paper will discuss the risks of using either many or few metrics. It will also contain a filled table of according to the Exhibit III as represented by Kerzner (2013) at the end of the case study.
Risks Reporting Many Metrics
Essentially, reporting many metrics comes with inherent risks and drawbacks that may affect the effectiveness and status of a project. These risks include organizational, logistical, and collaborative challenges. Firstly, when the managers seek to report on many metrics, they destabilize the employees and make them uncomfortable in doing their work. Essentially, increasing the number of metrics implies that employees will be evaluated in potentially many dimensions and parameters. This means that the personnel might feel over-supervised. This sense of over-supervision leads to lack of self-drive, feeling of intimidation, and low confidence. In addition to this, the employees might misconceive the assessment of the project and interpret it to the effect that the managers are spying on them (Heagney 2012). In turn, this creates conflict and instability between the management and the employees due to employee resistance and reduced trust between the two parties.
Secondly, the use of too many metrics leads to the loss of precious time because the team has to assess each of the employees in relation to each of the parameters. As such, the project management team might end up consuming time for implementation of strategies due to prolonged durations of measuring performance (Heldman 2011). Of course, using a reasonable number of metrics would provide a balance between assessment of progress and the actual implementation of the project plan (Collins 2011). In that regard, therefore, it is rational to conclude that the number of metrics and the time used to respond to them must be compromised with the completion of other project undertakings because they are equally important.
Third, based on the analysis of the case study, it is evident that the use of too many metrics result to divided attention. In other words, the metrics are so many that the management cannot focus on the critical issues effectively and exhaustively. In this case, the management ends up focusing on the quantity rather than quality. Many metrics are evaluated, but their number makes it impossible to investigate them in depth and act immediately. Bearing this in mind, it cannot be disputed that the metrics should be reasonably limited so that the management can immediately identify the crucial concerns and trends of the project.
Risks of Reporting Few Metrics
Whereas many metrics are not suitable due to the logistical and operational challenges they cause, it is also inappropriate to use too few metrics. According to the analysis there are various challenges that may be caused by the use of very limited number of metrics. Firstly, the very few metrics would provide insufficient information concerning the project performance and trends. This implies that the assessors will be unable to understand the true status of the project. In other words, the metrics will provide a false picture of the project performance due to insufficient measurement.
Critically, the use of such few metrics would negate the reason as to why metrics were developed and used in the Firstly place. In order to deal with this challenge, the metrics to be used and considered should be selected based on their categories. This categorization ensures that each aspect of performance is taken into consideration and the overall assessment reflects true status of the project. In addition, the metrics should be converted and reported as KPIs in order to ensure that they incorporate a sense of objectivity and prevent the delivery of unnecessary and confusing information to the management.
Secondly, using very few metrics might result to a situation where the employees underperform because they are not assessed sufficiently. As such, the relaxed assessment might lead to lack of responsibility on the side of employees. This conclusion is based on the fact that reasonable evaluation and pressure is necessary so that employees become diligent. Further, it might create a false impression on the employee performance. Lastly, the use of deficient number of metrics leads to a situation where the metrics do not capture some of the critical issues that should be considered by the management and the executive. As a result, some negative trends of the project might go unaddressed.
More Metrics Needed
Due to overreliance on the financial metrics and the challenges highlighted above, there are several metrics that should be included to ensure accurate and effective reporting. It was discovered that the consideration of metrics such as cost and time were not sufficient to ensure the success of a project. As such, project managers should be keen to incorporate value-oriented metric. Value-based metrics should be client-centred such that they ensure the satisfaction of customers as shown in the following list of items (Thomsett 2010).
- Features of the product
- Quality of work
- Delivery time
Evidently, the four parameters ensure that customers get value for their money, receive their products on time, and uphold their safety. The alert metric should also be introduced to take care of poorly performing projects (Schwalbe 2014). In this case, it was noted that the lower tier of management is always reluctant to stop and cancel project that perform poorly. As a result, the alert metrics should be used in order to raise alarm when a project reaches unacceptable underperformance level. Additionally, the organization should conduct audits internally in order to ensure that the analytical information and metrical reports provided to the executive are accurate (Maylor 2010). Otherwise, misinforming the executive would lead to poor decision making and a crisis (Morris 2013).
Filled Table per Exhibit III
|% of work packages on schedule||Milestone|
|% of work packages on budget||Milestone|
|Number of Assigned compared to Planned resources||Quantitative|
|Quality of assigned versus planned resources||Practical|
|Percentage of assigned versus planned baseline completed||Milestone|
|Percentage of quality assigned compared to the planned best practices used||Practical|
|Customer satisfaction rating||End result|
|Number of critical assumptions||Actionable|
|Percentage of critical assumptions that have changed||Practical|
|Number of cost revisions||Financial|
|Number of schedule revisions||Directional|
|Number of scope change control meetings||Actionable|
|Number of critical constraints||Directional|
|Percentage or the work packages with a critical designation||Actionable|
|Net Operating margin||Financial|
It is clear that reporting many or very few metrics comes with inherent risks and drawbacks that may affect a project. Reporting many metrics leads to various risks such as making the employees uncomfortable, overloading the executive with unnecessary information, and consumption of precious time. On the other hand, the use of very few metrics leads to provision of little information about the project trends and contradicts the purpose of metrics. Additionally, it was realized that there are metrics that can be added in order to capture non-financial aspects of the project. These metrics include the alert metrics and quality-based metrics in order to ensure customer satisfaction. Internal audits should also be conducted to ensure that all information provided is true and accurate. Lastly, the author recommends that the metrics should be converted and treated as KPIs in order to ensure objectivity.
Collins, R 2011, Project management, Nova Science, New York.
Heagney, J 2012, Fundamentals of project management, American Management Association, New York.
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Heldman, K 2011, Project management jumpstart, Wiley, Hoboken.
Kerzner, H 2013, Project management case studies, Wiley, Hoboken.
Maylor, H 2010, Project management, Financial Times Prentice Hall, Harlow.
Morris, P 2013, Reconstructing project management, Wiley, Chichester.
Schwalbe, K 2014, Information technology project management, Course Technology, Boston.
Thomsett, M 2010, The little black book of project management, American Management Association, New York.