Schedule, Cost, Scope, and Quality are four typical dimensions in the performance management of IT development and digital transformation projects. Performance indicators like On-Time Delivery (OTD), Schedule Variance, Cost Variance, Scope Creep, First Time Right, Defect Rate are common in Project Performance Scorecards and Dashboards. Some organizations use hybrid metrics like OTIF (On Time In Full) or performance indicators from the Earned Value Management (EVM). Some of these are lagging indicators while the others are leading indicators. These indicators help project and leadership teams in monitoring and controlling projects. The primary focus of these indicators is to deliver projects on time, on budget, and in full.
There is one critical dimension many project teams tend to ignore or focus less. It is tracking the estimated outcomes vs. targeted outcomes.
Usually, every project proposal starts with a business case where the justification for project investment is analyzed. A typical business case captures the need for investment, the timing, comparison of alternatives, risks, and estimated outcomes (financial and non-financial).
Estimated outcomes are calculated based on certain assumptions around many factors including, the solution, deployment, adoption, etc. These assumptions may change during the project lifecycle. We should revisit and validate these assumptions from time to time at relevant milestones and refresh the estimated outcomes. Project teams make trade-offs throughout the project lifecycle, and these decisions affect the outcomes. Captured requirements, design decisions, deployment approaches, etc. have a significant effect on the estimated outcomes. There should be a formal and structured approach to refresh and monitor the estimated outcomes. This metric helps in taking the right decisions not only on the scope, design, and deployment but also on investments. It also helps in discontinuing projects that don’t have potential anymore. Many project portfolio management (PPM) tools have a standard feature to track the estimated outcomes throughout project lifecycles. However, project and leadership teams fail to understand the significance of this feature.
In my experience working with multiple clients across multiple industries, I have noticed a big gap between estimated outcomes (as articulated in business cases) and the realized benefits (usually over 3-5 years post-completion of projects). Many of these gaps could have been avoided or reduced had the leadership team known the impact of the decisions during project execution phases.