We continue our series on the 7 Habits of Highly Effective Project Risk Managers with a practice that is crucial to the successful end to any project – forecast completion.
While it may seem like a no brainer to begin a project with the end in mind, too often Project Managers (PMs) become too absorbed in “fighting fires”. As a result, effective analysis of regular, cost-to-complete assessments can be jeopardized.
In order to deal with both sets of issues, ensuring an on-time, on-budget completion, best-in-class PMs examine not only the lagging indicators of project performance (job cost reports, actual vs. estimate, schedule-to-date) but leading indicators as well, including projected total cost at completion, projected completion date and projected cash flow and probability.
To help along along the way, PMs should utilize dashboards, like Active Risk’s Active Risk Manager (ARM), to provide a quick summary of a project’s performance through Key Performance Indicators (KPIs). Effective dashboards are personalized, valuable and simple, allowing PMs to spot the red flags in these summaries that might indicate an issue is brewing on the horizon.
A few examples of red flags include:
- Profit fade on more than 20% of jobs completed annually
- Underbilling on more than 50% of jobs with the same cost-to-complete YTD
- A consistent occurrence of unapproved change orders that constitute a substantial portion of job profitability
Think about it– without a dashboard, PMs would have to sort through piles of spreadsheets and data to identify potential issues. On large, complex projects, this is hardly a timely or effective process.
With a KPI tool like ARM, PMs of best-in-class organizations are able to ensure a successful completion of a project, as well as address unforeseen issues along the way.
For the complete list of our 7 habits, please see our blog post on the subject here and let us know your best practices in the comment section below!