The standard way to measure project success is to match the ‘actuals’ with ‘planned’ constraints. During project initiation, we set project success criteria and the constraints. The typical project constraints are Scope, Time, Budget and Quality. We match the actual Time, Budget, and Scope units with the planned. If actuals are less than planned, we declare success.
Consider the following planned constraints:
- Planned Time: 16 months
- Planned budget: $4M
- Scope: Replace existing ERP with the new ERP solution, keeping the current capabilities
The project is complete, and the following are the actuals:
- Actual Time: 24 months
- Actual budget spent: $4.5M
- Scope delivered: Replace existing ERP with the new ERP solution, keeping the existing capabilities
The standard way will declare the project as a failure. This is because the project took more than the planned time and budget to complete.
However, is it the right way to measure the project’s success?
No, there is a better way!
So, how to measure project success?
Focus on the value!
The project’s success should be based on the value returned by its outcome (product) and the experience of the project team and stakeholders.
In the above example, the project took more time and was over budget due to the following reasons:
- The Project Board decided to undertake educational sessions for the customer Project team. The objective of the sessions was to educate the standard operating procedures for project execution, risk management training, and common project pitfalls.
- The Project Board decided to document the solution design to handover to the Managed Services team
- The Project Board has set the foundation for continuous improvement by engaging Subject Matter Experts within the business
It is all value add work and outcomes of the project. You may argue that it is a scope creep. But, the point is if it is time critical value-add work, then, after the Board approval, why not do it within the project?
When we measure project success, our focus must be on the value it has returned. So let us get out of narrow thinking of matching actuals with planned constraints!
Measure the project’s success by the value of its outcome, not solely by measure against its constraints!