Portfolio Performance Metrics

Portfolio Perfomance Metric

Portfolio Perfomance Metrics - The portfolio management team needs metrics (measures) to show how effectively they are running the portfolio.

Some of these, such as your budget reports, are usually readily available from your Finance organization. However, some will need to be calculated within the portfolio. Examples of internal metrics include:

• Total capacity. Total capacity tells you how many potential hours your staff is available to work. It usually is calculated by taking total available hours and subtracting out the overhead hours.

• Utilization rate. Your utilization rate tells the percentage of time that your people are actually allocated to operations, support, projects and discretionary.

If you have already factored out the overhead hours, the utilization rate should be close to 100%. If you have not factored out overhead time, utilization rates should be around 75%-80%.

• Available hours. This is a forward-looking metric that tells how many hours people are unassigned in the future. The portfolio management team must focus on people who have available hours in the next three months and try to assign them additional work or a new project.

• Downtime (per person). This metric tells you how many hours people are unallocated. This can happen, for instance, if a person comes off a project and does not have another place to be assigned immediately. This number should be as low as possible.

• Work allocation Balance Points vs. actual (actual $ per category and percentages). This shows how well you are balancing the work in the portfolio versus your Balance Points.

For instance, if you have a target for your support work to be 40% of your entire portfolio workload, you can track this target against the actual numbers for the portfolio.

Project Budgeted cost vs. actual. These are basic financial numbers that should be tracked for each project in the portfolio and then rolled up at the portfolio level as well. If the total project budgets exceed their targets, it could mean that other authorized workwill not be able to be executed.

Project budgeted schedule vs. actual. All projects should be tracking their performance against their targeted completion dates.

Again, if projects are tending to run over their deadlines, it may mean that other projects will not be able to start because the resources are still tied up in other projects. Rework. Reported from the project teams.

• Defects. Reported from the support teams.

• Service level agreement commitments vs. actuals. Reported wherever they are applicable, but usually these are related to support teams.

• Client satisfaction. All projects and operations and support teams should be reporting some kind of customer satisfaction metrics.

The reason you gather organizational metrics and feedback is to determine if you are meeting your objectives and to improve your processes.

For instance, let’s say you have an objective that 80% of all projects will meet their budget and deadline criteria. If your monthly metrics show that you are only meeting the criteria 60% of the time, you are obviously failing.

Further investigation should help determine the causes, and corrective actions should be undertaken to improve these numbers.

Likewise, if a quarterly survey reveals that your clients rate your portfolio low on your communication skills, you have time to improve the communication channels to ensure the clients are getting the information they desire.

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