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WHAT ARE KEY PERFORMANCE INDICATORS FOR PRODUCT

Product management KPIs are very crucial to the success of any project, especial
ly if it is grand and involves
multiple phases. KPIs are the best existing way of managing projects and product
s to ensure the activities remain
within set scopes. KPI is simply an acronym for key performance indicators which
are used to measure the
performance of a project at any given point. They basically indicate how much pr
ogress has been achieved and
whether it is meeting the set objectives. Product management performance indicat
ors are therefore analytical
tools that should be taken very seriously. There are many KPIs that can be formu
lated and they vary depending
on the type of project being handled.
-Characteristics of Product Management KPIs
As usual, product management key performance indicators is the critical success
factor for any business and
must be approached comprehensively. Usually the KPIs are developed in early stag
es along with objectives. It
is wise to involve everyone in the establishment including employees when formin
g KPIs to ensure each individual
is capable of tracking progress.
These performance indicators must be vividly described and measurable. They are
analysis metrics and must
therefore be quantifiable. Just like most analytics, the KPIs inform business wh
at is going on with the product
(its state and what users are doing). It however does not satisfy the why question
. They are outcome-oriented
measurements that provide insights on the current status of a process. Another i
mportant characteristic to note
is that KPIs are not universal which means they vary depending on the type of bu
siness and process in question.
Different products/projects are measured using different metrics.
-Product Management KPIs

Examples to Use

As much as these are very advantageous in strategic positioning, the major issue
lies with their formulation.
These measurable values must be carefully and precisely formed if the business i
s to achieve its objectives.
Any focus on the wrong metrics is a potential step towards poor performance. A g
ood KPI will include the most
important business performance objectives across all elements of the teams invol
ved.
They are agreed on before commencement of the project and can be measured, share
d and analyzed among
organizational departments at any given time. The teams involved should be poise
d to track accurate metrics
in their assigned area. While the key performance indicators vary from project t
o project, some aspects and
metrics are important to any business.
Some examples that can be used include the following:
-Deviation of set hours of work

This is an important KPI that should be ass

essed. Processes such as


budgeting and training heavily depend on understanding the tasks involved,
those that take more time and those that need less time. During the product mana
gement lifecycle, it will also be important to acknowledge teams that had to go
above and beyond to deliver given services. Deviation of working hours can there
fore be used to build impartial incentive and reward programs. Besides, it offer
s a metric that can be used to improve time allocation in the future.
-Planned Budget Deviation
To track any waste and inefficiencies, it is impo
rtant to know how, where and why
the budget stipulated for your project was deviated. This will also help i
n better planning for future
unforeseen challenges inherent to your projects.
-Missed milestones
This is often measured as a percentage. It is important
to keep records of achieved,
missed and shifted milestones. Achieving goals and milestones is always a
rejuvenation and motivation for
any project. When too many milestones are not accomplished, teams may feel
frustrated. Keeping these records
can help in restarting certain parts as well as in future projects.
-Cost variance metrics Keeping track of cost variance is important in two ma
jor ways. It helps management to
identify which teams were more efficient in their expenditure and provides
sufficient data that can be used
in future decision making. This data also presents the actual cost of work
performed which can be compared
against budgeted cost for the same work. Other analysis such as cost perfor
mance index and cost schedule
index can thus be calculated with ease.
There are many other key performance indicators that can be used to measure the
progress of business processes.
They include scheduled variance, scheduled performance index, estimate at comple
tion, percentage of overdue
assignments and many more. The fundamental principle of forming KPIs is that the
y must be measurable and focused
on performance goals of the organization. Tracking accurate metrics is paramount
to successful completion of
projects.
-Advantages of KPIs
There are many primary benefits of using key performance indicators in today s vol
atile, competitive and
unpredictable business environment. The major challenge of management is to demo
nstrate their teams contribution
towards top-line and bottom-line goals of the organization.
There is no justification for not measuring efficiency or focusing on wrong metr
ics as this could risk an entire
budget. KPIs are important values that do not only measure performance, but also
monitor progress, offer a
baseline for correction and provide ample data for future decision making. Organ
izational success relies on building efficient teams that will react fast to mit
igating risks and stretch their boundaries to deliver required services.
To achieve clear visibility of such aspects require measurements that reveal ove
rall effectiveness of the team.

Product management key performance indicators therefore help management to track


performance at all levels
(production and employee). These metrics offer analytical data on trends, dynami
cs and characteristics which are very useful in decision making.
-Concerns
When it comes to key performance indicators, there is only one major concern. Th
ese aspects must be clearly
defined and mapped down in the preliminary phases of the product management cycl
e. If the wrong indicators are
chosen, the organization may focus on wrong metrics which corresponds to wrong d
irection, poor allocation of
resources and absolute failure. It is therefore very critical that the indicator
s are precisely formed to measure
organizational goals accomplishments.
-Conclusion
Formulating and tracking product management KPIs is a common practice for most m
odern businesses. This way,
companies have been able to build highly efficient teams that can plan, budget a
nd accomplish various projects
within the shortest time possible. It also reduces wastages and eases decision m
aking after completion of the
first few projects. It is however necessary to remember that KPIs vary from one
project to another and the
approaches given to any will certainly differ as well.
by Mark Silver on August 21, 2014