Mastering Project Benchmarking: Best Practices for Project Management Success
Benchmarking is a critical practice for effective project management. By comparing key metrics and processes from your projects against industry standards and best practices, benchmarking provides actionable insights to drive continuous improvement. This comprehensive guide covers everything you need to establish an effective project benchmarking process. Read on to learn best practices that will lead your projects to success.
Why Benchmark Projects? The Powerful Benefits
Benchmarking delivers a multitude of benefits that elevate project management performance across critical areas:
Pinpoint Specific Areas for Improvement
Benchmarking identifies precise project areas in which you fail to align with industry best practices. Rather than guessing at broader issues, you can target very specific processes and metrics for improvement. For example, benchmarking may reveal that your project cost variance is 25% worse than industry peers, allowing you to drill down on improving budgeting practices.
Gain Objective Assessments of Performance
Benchmarking allows you to move from general perceptions of good or poor project performance to hard data on exact standards achieved. Across key metrics like schedule performance, quality, risk mitigation and more, you gain an objective baseline for measurement and continuous improvement.
Motivate Change
By demonstrating gaps between actual project performance and industry best practices, benchmarking builds urgency and consensus around the need for change. Seeing that top competitors consistently deliver projects with 35% fewer defects, for example, rallies staff around quality improvements.
Facilitate Process Improvements
The best practices revealed through benchmarking provide a ready blueprint for incrementally improving processes. Organizations leveraging project management maturity models for benchmarking can map gaps to specific needed process changes.
Increase Project Success Rates
Ultimately comprehensive project benchmarking leads to higher success rates, greater alignment to business objectives, and more consistent on-time/on-budget delivery. Industry data confirms organizations excelling at benchmarking achieve far better outcomes.
Enhance Customer Satisfaction
By ensuring projects deliver greater value through benchmarking, overall customer and stakeholder satisfaction levels also increase.
Types of Project Benchmarking
There are several major types of project benchmarking to consider:
Internal Project Benchmarking
Internal benchmarking compares your current project processes and performance metrics against past projects completed within your own organization. This offers the simplicity of leveraging existing historical data. However, internal-only benchmarking limits the scope for improvement versus broader industry practices.
Competitive Project Benchmarking
Competitive benchmarking compares your project performance against industry peers and competitors. For example, metrics around cost, schedule, quality and more are compared against similar projects from top performers in your sector. This approach aligns improvement efforts directly against leaders in your competitive space.
Functional Area Benchmarking
Functional benchmarking focuses comparisons within specific project functions like risk management, requirements definition, quality control etc. By isolating function-specific industry best practices, this approach helps continuously improve delivery of that function across projects.
Generic Benchmarking
With generic benchmarking, projects are compared against an external standard generic maturity models like OPM3 or a proprietary benchmark database. Generic models allow consistent benchmarking but may lack specificity to your industry or project types.
Most effective project benchmarking initiatives utilize a combination of these approaches to fully assess performance and capabilities from multiple perspectives, fueling targeted improvements industrywide and within specific functional areas that your own past projects fail to reveal.
Core Areas to Benchmark in Project Management
Nearly every aspect of project delivery can be benchmarked. But several core areas are particularly crucial to focus benchmarking efforts on first:
Project Cost Performance Benchmarks
Managing project cost performance is central to project success. Key metrics around cost management commonly used in benchmarking include:
Cost Performance Index (CPI)
Percent projects completed under/over original budget
Total project cost reduction over comparable timeframes
Earned Value Management cost savings
Cost estimating accuracy
Industry averages across these KPIs through competitive benchmarking provide goals for continuous improvement in cost management.
Project Schedule Performance Benchmarks
Alongside cost, schedule performance benchmarking is vital. Critical metrics evaluated may include:
Schedule Performance Index (SPI)
Percent projects completed within the original scheduled timeframe
Average project schedule overruns
Frequency/impact of delays or scope changes during execution
Duration estimating accuracy
Schedule benchmarks uncover opportunities to implement process changes that increase on-time delivery rates.
Project Quality Management Benchmarks
Robust quality management is essential to successful projects and products. Typical benchmarking metrics for quality include:
Number of defects identified post-implementation
Cost of project rework and warranty work
Cost of quality control activities
End-user or customer satisfaction scores
Rates of requirements changes
Quality benchmarks identify focus areas like improved requirements, enhanced test management or increased user engagement where processes require strengthening to limit downstream defects.
Project Risk Management Benchmarks
Proactively identifying and mitigating project risks is key to minimizing surprises. Important risk management benchmarking metrics include:
Size/number of unanticipated risks encountered
Total project risk exposure costs
Rates of early project risk identification
Risk avoidance/mitigation success rate
Compare detailed metrics in areas like risk planning, assessment processes, contingency budgeting and response approaches against top performers to elevate risk management capabilities.
Portfolio Performance Benchmarks
Finally, benchmarking at the project portfolio level rather than individual projects provides invaluable visibility. Typical portfolio-level benchmarks would incorporate:
Percent projects meeting original Return on Investment (ROI) targets
Multi-project program success rates
Portfolio value efficiency - benefits realized relative to costs
Strategic alignment - the proportion of projects tied to core business goals
Make portfolio reporting and decisions support rigorous benchmarking comparisons to ensure overall programs of projects consistently fuel business performance, not just individual projects.
Developing a Structured Project Benchmarking Process
Following a structured approach is key to achieving sustained, measurable improvements through project benchmarking. This involves:
Define Project Metrics and Key Performance Indicators
First clearly define measurable project management and product metrics aligned to each performance area that will be benchmarked. Quantifiable Key Performance Indicators (KPIs) form the foundation for meaningful comparisons.
Identify Benchmark Comparison Data Sources
Pinpoint reliable sources for obtaining benchmark comparison data for each targeted metric and performance area. Potential sources range from internal records on previous projects to industry reports with aggregated, anonymous project metrics from competitors.
Collect Performance Data Across Existing Projects
Gather current performance data across every project metric and KPI identified in the first step that will serve as the baseline for benchmark comparisons. Structured project management tools can help compile performance data.
Compare Current Performance Against Benchmarks
Analyze performance gaps between compiled metrics from existing projects and benchmark targets from identified external sources. This reveals focus areas for greatest improvement through changes to processes, tools or capabilities.
Establish Realistic Benchmark Targets
Set clear, realistic benchmark targets for your organization tailored to project type and industry for each project management performance area based on insights gained. Targets define expected performance levels to strive toward.
Develop Focused Performance Improvement Plans
Create detailed action plans geared toward closing identified performance gaps against defined benchmarks. Plans may encompass adjustments to processes, additional staff training, tool implementation, or increased discipline around proven best practices.
Embed Benchmarking Into Governance
Fully incorporate benchmarking activities for reviews of performance metrics, comparisons against latest external benchmarks, and updates to improvement plans into core project lifecycle governance processes to sustain gains.
This closed-loop, continuous approach positions benchmarking as an engine driving betterment with each project delivery cycle.
Selecting the Right Project Benchmark Data Sources
Access to current, high-quality benchmark data is essential for meaningful comparisons. Potential sources include:
Internal Benchmarks
Comparing recent project metrics against older internal projects provides baseline self-assessment but lacks visibility into industry norms or leading practices.
Industry Surveys and Project Reports
Research reports providing aggregated, anonymous project performance metrics from industry peers offer broader benchmarking visibility. HIGH-LEVEL DATA BUT LACKS CONTEXT
Project Management Standards
Generic standards like PMI's OPM3 provides general benchmark targets for maturing project capabilities But lack granularity for specific industries..
Independent Project Analysis FirmsFirms like Independent Project Analysis specialize in in-depth, proprietary project benchmark databases, metrics and performance insights for different industries and project types ALLOW DEEP-DIVE COMPARISONS. Significant cost for access..
Project Management Associations
Industry PMO associations compile project performance benchmarks based on member surveys results. May lack size for statistical significance..
3rd Party Specialists
Firms focused exclusively on benchmark compilation and analysis for specific industries assemble detailed performance databases. But quality and size vary..
While internal analysis provides a baseline, combining internal metrics with insights from industry-specific external benchmarks offers a comprehensive foundation for improvement..
Recommended First Steps Toward Project Benchmarking
The most successful project benchmarking initiatives start small:
Kick Off with One or Two Priority Areas
Pilot the benchmarking process on a limited set of crucial metrics like cost performance or schedule adherence before expanding to additional areas.
Leverage Internal Benchmarks FirstComplete comparisons of metrics from recently completed projects against older internal efforts to establish capability self-assessments cost-effectively before seeking more extensive external benchmarks.
Partner With Project LeadershipWork collaboratively with project managers, sponsors and other leaders to align benchmarking to real decision-making needs, promoting engagement.
Vet Multiple External Benchmark Options
Thoroughly evaluate relevance, cost and ease-of-use considerations around potential sources for industry benchmarks in focus areas before committing long term.
Expand Benchmarks Progressively Over Time
Upon establishing fundamental benchmarking processes, incrementally expand comparisons to more performance areas, project types, metrics, and data sources. Let demonstrated value fuel broader adoption.
While avoiding unnecessary complexity upfront, this approach sets the foundation for enterprise-wide project benchmarking capabilities that drive continuous improvement.
Addressing Common Project Benchmarking Challenges
Several barriers frequently emerge when launching benchmarking initiatives:
Inconsistent Definitions of Metrics
Using inconsistent calculations or definitions of metrics across projects limits aligning benchmark comparisons. Develop standardized metrics as part of process.
Incomplete Project Performance Data
Effective benchmarking relies on consistent, structured project performance data which is often unavailable without dedicated tools and processes.
Superficial Benchmark Comparisons
Benchmarks often fail to account for variations in project scale, type, risk-levels, technology used and other factors skewing superficial comparisons. Prioritize benchmarks that incorporate normalization and context.
Achieving Buy-In Across Project Teams
The performance gaps revealed through benchmarking may be initially rejected by project managers and staff unless involved through the process. Secure executive sponsorship to demonstrate commitment.
Sustaining Process Improvements
The operational changes suggested through benchmarking frequently fade after the initial push unless ingrained through updated processes and tools with executive backing.
Realizing the Full Potential of Project Benchmarking
To overcome barriers and realize the full benefit of benchmarks:
Standardize Performance Metrics
Align definitions and calculations behind common metrics like cost performance index across teams to allow for consistent comparisons.
Implement Project Management ToolsSystems supporting structured performance data capture and benchmark integration sustain success.
Prioritize Context-Rich Benchmark Sources Seeking benchmarks that account for fundamental variations in factors like project scale and risk-levels ensures meaningful, targeted insights.
Customize Benchmark TargetsSet realistic benchmark targets tailored specifically to your project types rather than arbitrarily adopting generic best-practice targets.
Encourage Benchmarking Process AdoptionWork openly with project managers and teams to tailor benchmarking practices and tools to day-to-day needs, facilitating engagement around performance improvements uncovered.
Gain Leadership Commitment Make benchmarking a C-level sponsored capability upheld through governance policies and processes to maintain changes realized through comparisons.
Committing to these principles allows organizations to maximize returns from project benchmarking for enhancing outcomes.
Conclusion & Next Steps
This guide presents a comprehensive overview of best practices for project benchmarking - leveraging comparisons against industry leaders to fuel continual improvements. To initiate your own benchmarking journey:
Review this Playbook with Project Leadership to align on scope and priorities
Identify Core Metrics currently captured across projects to serve as starting point
Select Initial Benchmark Areas like cost or risk to pilot process on
Research Potential External Benchmark Data Sources to inform longer-term platform decisions
Beginning with a targeted initial benchmarking pilot focused on a few crucial performance areas establishes justification for properly investing in fully robust, enterprise-grade capabilities over time.
With executive backing, a collaborative approach engaging project professionals, and adherence to the proven principles outlined here, organizations can master project benchmarking to drive tremendous gains in consistency, efficiency and strategic results from vital project work.
Mastering Project Benchmarking: Best Practices for Project Management Success
Benchmarking is a critical practice for effective project management. By comparing key metrics and processes from your projects against industry standards and best practices, benchmarking provides actionable insights to drive continuous improvement. This comprehensive guide covers everything you need to establish an effective project benchmarking process. Read on to learn best practices that will lead your projects to success.
Why Benchmark Projects? The Powerful Benefits
Benchmarking delivers a multitude of benefits that elevate project management performance across critical areas:
Pinpoint Specific Areas for Improvement
Benchmarking identifies precise project areas in which you fail to align with industry best practices. Rather than guessing at broader issues, you can target very specific processes and metrics for improvement. For example, benchmarking may reveal that your project cost variance is 25% worse than industry peers, allowing you to drill down on improving budgeting practices.
Gain Objective Assessments of Performance
Benchmarking allows you to move from general perceptions of good or poor project performance to hard data on exact standards achieved. Across key metrics like schedule performance, quality, risk mitigation and more, you gain an objective baseline for measurement and continuous improvement.
Motivate Change
By demonstrating gaps between actual project performance and industry best practices, benchmarking builds urgency and consensus around the need for change. Seeing that top competitors consistently deliver projects with 35% fewer defects, for example, rallies staff around quality improvements.
Facilitate Process Improvements
The best practices revealed through benchmarking provide a ready blueprint for incrementally improving processes. Organizations leveraging project management maturity models for benchmarking can map gaps to specific needed process changes.
Increase Project Success Rates
Ultimately comprehensive project benchmarking leads to higher success rates, greater alignment to business objectives, and more consistent on-time/on-budget delivery. Industry data confirms organizations excelling at benchmarking achieve far better outcomes.
Enhance Customer Satisfaction
By ensuring projects deliver greater value through benchmarking, overall customer and stakeholder satisfaction levels also increase.
Types of Project Benchmarking
There are several major types of project benchmarking to consider:
Internal Project Benchmarking
Internal benchmarking compares your current project processes and performance metrics against past projects completed within your own organization. This offers the simplicity of leveraging existing historical data. However, internal-only benchmarking limits the scope for improvement versus broader industry practices.
Competitive Project Benchmarking
Competitive benchmarking compares your project performance against industry peers and competitors. For example, metrics around cost, schedule, quality and more are compared against similar projects from top performers in your sector. This approach aligns improvement efforts directly against leaders in your competitive space.
Functional Area Benchmarking
Functional benchmarking focuses comparisons within specific project functions like risk management, requirements definition, quality control etc. By isolating function-specific industry best practices, this approach helps continuously improve delivery of that function across projects.
Generic Benchmarking
With generic benchmarking, projects are compared against an external standard generic maturity models like OPM3 or a proprietary benchmark database. Generic models allow consistent benchmarking but may lack specificity to your industry or project types.
Most effective project benchmarking initiatives utilize a combination of these approaches to fully assess performance and capabilities from multiple perspectives, fueling targeted improvements industrywide and within specific functional areas that your own past projects fail to reveal.
Core Areas to Benchmark in Project Management
Nearly every aspect of project delivery can be benchmarked. But several core areas are particularly crucial to focus benchmarking efforts on first:
Project Cost Performance Benchmarks
Managing project cost performance is central to project success. Key metrics around cost management commonly used in benchmarking include:
Cost Performance Index (CPI)
Percent projects completed under/over original budget
Total project cost reduction over comparable timeframes
Earned Value Management cost savings
Cost estimating accuracy
Industry averages across these KPIs through competitive benchmarking provide goals for continuous improvement in cost management.
Project Schedule Performance Benchmarks
Alongside cost, schedule performance benchmarking is vital. Critical metrics evaluated may include:
Schedule Performance Index (SPI)
Percent projects completed within the original scheduled timeframe
Average project schedule overruns
Frequency/impact of delays or scope changes during execution
Duration estimating accuracy
Schedule benchmarks uncover opportunities to implement process changes that increase on-time delivery rates.
Project Quality Management Benchmarks
Robust quality management is essential to successful projects and products. Typical benchmarking metrics for quality include:
Number of defects identified post-implementation
Cost of project rework and warranty work
Cost of quality control activities
End-user or customer satisfaction scores
Rates of requirements changes
Quality benchmarks identify focus areas like improved requirements, enhanced test management or increased user engagement where processes require strengthening to limit downstream defects.
Project Risk Management Benchmarks
Proactively identifying and mitigating project risks is key to minimizing surprises. Important risk management benchmarking metrics include:
Size/number of unanticipated risks encountered
Total project risk exposure costs
Rates of early project risk identification
Risk avoidance/mitigation success rate
Compare detailed metrics in areas like risk planning, assessment processes, contingency budgeting and response approaches against top performers to elevate risk management capabilities.
Portfolio Performance Benchmarks
Finally, benchmarking at the project portfolio level rather than individual projects provides invaluable visibility. Typical portfolio-level benchmarks would incorporate:
Percent projects meeting original Return on Investment (ROI) targets
Multi-project program success rates
Portfolio value efficiency - benefits realized relative to costs
Strategic alignment - the proportion of projects tied to core business goals
Make portfolio reporting and decisions support rigorous benchmarking comparisons to ensure overall programs of projects consistently fuel business performance, not just individual projects.
Developing a Structured Project Benchmarking Process
Following a structured approach is key to achieving sustained, measurable improvements through project benchmarking. This involves:
Define Project Metrics and Key Performance Indicators
First clearly define measurable project management and product metrics aligned to each performance area that will be benchmarked. Quantifiable Key Performance Indicators (KPIs) form the foundation for meaningful comparisons.
Identify Benchmark Comparison Data Sources
Pinpoint reliable sources for obtaining benchmark comparison data for each targeted metric and performance area. Potential sources range from internal records on previous projects to industry reports with aggregated, anonymous project metrics from competitors.
Collect Performance Data Across Existing Projects
Gather current performance data across every project metric and KPI identified in the first step that will serve as the baseline for benchmark comparisons. Structured project management tools can help compile performance data.
Compare Current Performance Against Benchmarks
Analyze performance gaps between compiled metrics from existing projects and benchmark targets from identified external sources. This reveals focus areas for greatest improvement through changes to processes, tools or capabilities.
Establish Realistic Benchmark Targets
Set clear, realistic benchmark targets for your organization tailored to project type and industry for each project management performance area based on insights gained. Targets define expected performance levels to strive toward.
Develop Focused Performance Improvement Plans
Create detailed action plans geared toward closing identified performance gaps against defined benchmarks. Plans may encompass adjustments to processes, additional staff training, tool implementation, or increased discipline around proven best practices.
Embed Benchmarking Into Governance
Fully incorporate benchmarking activities for reviews of performance metrics, comparisons against latest external benchmarks, and updates to improvement plans into core project lifecycle governance processes to sustain gains.
This closed-loop, continuous approach positions benchmarking as an engine driving betterment with each project delivery cycle.
Selecting the Right Project Benchmark Data Sources
Access to current, high-quality benchmark data is essential for meaningful comparisons. Potential sources include:
Internal Benchmarks
Comparing recent project metrics against older internal projects provides baseline self-assessment but lacks visibility into industry norms or leading practices.
Industry Surveys and Project Reports
Research reports providing aggregated, anonymous project performance metrics from industry peers offer broader benchmarking visibility. HIGH-LEVEL DATA BUT LACKS CONTEXT
Project Management Standards
Generic standards like PMI's OPM3 provides general benchmark targets for maturing project capabilities But lack granularity for specific industries..
Independent Project Analysis FirmsFirms like Independent Project Analysis specialize in in-depth, proprietary project benchmark databases, metrics and performance insights for different industries and project types ALLOW DEEP-DIVE COMPARISONS. Significant cost for access..
Project Management Associations
Industry PMO associations compile project performance benchmarks based on member surveys results. May lack size for statistical significance..
3rd Party Specialists
Firms focused exclusively on benchmark compilation and analysis for specific industries assemble detailed performance databases. But quality and size vary..
While internal analysis provides a baseline, combining internal metrics with insights from industry-specific external benchmarks offers a comprehensive foundation for improvement..
Recommended First Steps Toward Project Benchmarking
The most successful project benchmarking initiatives start small:
Kick Off with One or Two Priority Areas
Pilot the benchmarking process on a limited set of crucial metrics like cost performance or schedule adherence before expanding to additional areas.
Leverage Internal Benchmarks FirstComplete comparisons of metrics from recently completed projects against older internal efforts to establish capability self-assessments cost-effectively before seeking more extensive external benchmarks.
Partner With Project LeadershipWork collaboratively with project managers, sponsors and other leaders to align benchmarking to real decision-making needs, promoting engagement.
Vet Multiple External Benchmark Options
Thoroughly evaluate relevance, cost and ease-of-use considerations around potential sources for industry benchmarks in focus areas before committing long term.
Expand Benchmarks Progressively Over Time
Upon establishing fundamental benchmarking processes, incrementally expand comparisons to more performance areas, project types, metrics, and data sources. Let demonstrated value fuel broader adoption.
While avoiding unnecessary complexity upfront, this approach sets the foundation for enterprise-wide project benchmarking capabilities that drive continuous improvement.
Addressing Common Project Benchmarking Challenges
Several barriers frequently emerge when launching benchmarking initiatives:
Inconsistent Definitions of Metrics
Using inconsistent calculations or definitions of metrics across projects limits aligning benchmark comparisons. Develop standardized metrics as part of process.
Incomplete Project Performance Data
Effective benchmarking relies on consistent, structured project performance data which is often unavailable without dedicated tools and processes.
Superficial Benchmark Comparisons
Benchmarks often fail to account for variations in project scale, type, risk-levels, technology used and other factors skewing superficial comparisons. Prioritize benchmarks that incorporate normalization and context.
Achieving Buy-In Across Project Teams
The performance gaps revealed through benchmarking may be initially rejected by project managers and staff unless involved through the process. Secure executive sponsorship to demonstrate commitment.
Sustaining Process Improvements
The operational changes suggested through benchmarking frequently fade after the initial push unless ingrained through updated processes and tools with executive backing.
Realizing the Full Potential of Project Benchmarking
To overcome barriers and realize the full benefit of benchmarks:
Standardize Performance Metrics
Align definitions and calculations behind common metrics like cost performance index across teams to allow for consistent comparisons.
Implement Project Management ToolsSystems supporting structured performance data capture and benchmark integration sustain success.
Prioritize Context-Rich Benchmark Sources Seeking benchmarks that account for fundamental variations in factors like project scale and risk-levels ensures meaningful, targeted insights.
Customize Benchmark TargetsSet realistic benchmark targets tailored specifically to your project types rather than arbitrarily adopting generic best-practice targets.
Encourage Benchmarking Process AdoptionWork openly with project managers and teams to tailor benchmarking practices and tools to day-to-day needs, facilitating engagement around performance improvements uncovered.
Gain Leadership Commitment Make benchmarking a C-level sponsored capability upheld through governance policies and processes to maintain changes realized through comparisons.
Committing to these principles allows organizations to maximize returns from project benchmarking for enhancing outcomes.
Conclusion & Next Steps
This guide presents a comprehensive overview of best practices for project benchmarking - leveraging comparisons against industry leaders to fuel continual improvements. To initiate your own benchmarking journey:
Review this Playbook with Project Leadership to align on scope and priorities
Identify Core Metrics currently captured across projects to serve as starting point
Select Initial Benchmark Areas like cost or risk to pilot process on
Research Potential External Benchmark Data Sources to inform longer-term platform decisions
Beginning with a targeted initial benchmarking pilot focused on a few crucial performance areas establishes justification for properly investing in fully robust, enterprise-grade capabilities over time.
With executive backing, a collaborative approach engaging project professionals, and adherence to the proven principles outlined here, organizations can master project benchmarking to drive tremendous gains in consistency, efficiency and strategic results from vital project work.
Mastering Project Benchmarking: Best Practices for Project Management Success
Benchmarking is a critical practice for effective project management. By comparing key metrics and processes from your projects against industry standards and best practices, benchmarking provides actionable insights to drive continuous improvement. This comprehensive guide covers everything you need to establish an effective project benchmarking process. Read on to learn best practices that will lead your projects to success.
Why Benchmark Projects? The Powerful Benefits
Benchmarking delivers a multitude of benefits that elevate project management performance across critical areas:
Pinpoint Specific Areas for Improvement
Benchmarking identifies precise project areas in which you fail to align with industry best practices. Rather than guessing at broader issues, you can target very specific processes and metrics for improvement. For example, benchmarking may reveal that your project cost variance is 25% worse than industry peers, allowing you to drill down on improving budgeting practices.
Gain Objective Assessments of Performance
Benchmarking allows you to move from general perceptions of good or poor project performance to hard data on exact standards achieved. Across key metrics like schedule performance, quality, risk mitigation and more, you gain an objective baseline for measurement and continuous improvement.
Motivate Change
By demonstrating gaps between actual project performance and industry best practices, benchmarking builds urgency and consensus around the need for change. Seeing that top competitors consistently deliver projects with 35% fewer defects, for example, rallies staff around quality improvements.
Facilitate Process Improvements
The best practices revealed through benchmarking provide a ready blueprint for incrementally improving processes. Organizations leveraging project management maturity models for benchmarking can map gaps to specific needed process changes.
Increase Project Success Rates
Ultimately comprehensive project benchmarking leads to higher success rates, greater alignment to business objectives, and more consistent on-time/on-budget delivery. Industry data confirms organizations excelling at benchmarking achieve far better outcomes.
Enhance Customer Satisfaction
By ensuring projects deliver greater value through benchmarking, overall customer and stakeholder satisfaction levels also increase.
Types of Project Benchmarking
There are several major types of project benchmarking to consider:
Internal Project Benchmarking
Internal benchmarking compares your current project processes and performance metrics against past projects completed within your own organization. This offers the simplicity of leveraging existing historical data. However, internal-only benchmarking limits the scope for improvement versus broader industry practices.
Competitive Project Benchmarking
Competitive benchmarking compares your project performance against industry peers and competitors. For example, metrics around cost, schedule, quality and more are compared against similar projects from top performers in your sector. This approach aligns improvement efforts directly against leaders in your competitive space.
Functional Area Benchmarking
Functional benchmarking focuses comparisons within specific project functions like risk management, requirements definition, quality control etc. By isolating function-specific industry best practices, this approach helps continuously improve delivery of that function across projects.
Generic Benchmarking
With generic benchmarking, projects are compared against an external standard generic maturity models like OPM3 or a proprietary benchmark database. Generic models allow consistent benchmarking but may lack specificity to your industry or project types.
Most effective project benchmarking initiatives utilize a combination of these approaches to fully assess performance and capabilities from multiple perspectives, fueling targeted improvements industrywide and within specific functional areas that your own past projects fail to reveal.
Core Areas to Benchmark in Project Management
Nearly every aspect of project delivery can be benchmarked. But several core areas are particularly crucial to focus benchmarking efforts on first:
Project Cost Performance Benchmarks
Managing project cost performance is central to project success. Key metrics around cost management commonly used in benchmarking include:
Cost Performance Index (CPI)
Percent projects completed under/over original budget
Total project cost reduction over comparable timeframes
Earned Value Management cost savings
Cost estimating accuracy
Industry averages across these KPIs through competitive benchmarking provide goals for continuous improvement in cost management.
Project Schedule Performance Benchmarks
Alongside cost, schedule performance benchmarking is vital. Critical metrics evaluated may include:
Schedule Performance Index (SPI)
Percent projects completed within the original scheduled timeframe
Average project schedule overruns
Frequency/impact of delays or scope changes during execution
Duration estimating accuracy
Schedule benchmarks uncover opportunities to implement process changes that increase on-time delivery rates.
Project Quality Management Benchmarks
Robust quality management is essential to successful projects and products. Typical benchmarking metrics for quality include:
Number of defects identified post-implementation
Cost of project rework and warranty work
Cost of quality control activities
End-user or customer satisfaction scores
Rates of requirements changes
Quality benchmarks identify focus areas like improved requirements, enhanced test management or increased user engagement where processes require strengthening to limit downstream defects.
Project Risk Management Benchmarks
Proactively identifying and mitigating project risks is key to minimizing surprises. Important risk management benchmarking metrics include:
Size/number of unanticipated risks encountered
Total project risk exposure costs
Rates of early project risk identification
Risk avoidance/mitigation success rate
Compare detailed metrics in areas like risk planning, assessment processes, contingency budgeting and response approaches against top performers to elevate risk management capabilities.
Portfolio Performance Benchmarks
Finally, benchmarking at the project portfolio level rather than individual projects provides invaluable visibility. Typical portfolio-level benchmarks would incorporate:
Percent projects meeting original Return on Investment (ROI) targets
Multi-project program success rates
Portfolio value efficiency - benefits realized relative to costs
Strategic alignment - the proportion of projects tied to core business goals
Make portfolio reporting and decisions support rigorous benchmarking comparisons to ensure overall programs of projects consistently fuel business performance, not just individual projects.
Developing a Structured Project Benchmarking Process
Following a structured approach is key to achieving sustained, measurable improvements through project benchmarking. This involves:
Define Project Metrics and Key Performance Indicators
First clearly define measurable project management and product metrics aligned to each performance area that will be benchmarked. Quantifiable Key Performance Indicators (KPIs) form the foundation for meaningful comparisons.
Identify Benchmark Comparison Data Sources
Pinpoint reliable sources for obtaining benchmark comparison data for each targeted metric and performance area. Potential sources range from internal records on previous projects to industry reports with aggregated, anonymous project metrics from competitors.
Collect Performance Data Across Existing Projects
Gather current performance data across every project metric and KPI identified in the first step that will serve as the baseline for benchmark comparisons. Structured project management tools can help compile performance data.
Compare Current Performance Against Benchmarks
Analyze performance gaps between compiled metrics from existing projects and benchmark targets from identified external sources. This reveals focus areas for greatest improvement through changes to processes, tools or capabilities.
Establish Realistic Benchmark Targets
Set clear, realistic benchmark targets for your organization tailored to project type and industry for each project management performance area based on insights gained. Targets define expected performance levels to strive toward.
Develop Focused Performance Improvement Plans
Create detailed action plans geared toward closing identified performance gaps against defined benchmarks. Plans may encompass adjustments to processes, additional staff training, tool implementation, or increased discipline around proven best practices.
Embed Benchmarking Into Governance
Fully incorporate benchmarking activities for reviews of performance metrics, comparisons against latest external benchmarks, and updates to improvement plans into core project lifecycle governance processes to sustain gains.
This closed-loop, continuous approach positions benchmarking as an engine driving betterment with each project delivery cycle.
Selecting the Right Project Benchmark Data Sources
Access to current, high-quality benchmark data is essential for meaningful comparisons. Potential sources include:
Internal Benchmarks
Comparing recent project metrics against older internal projects provides baseline self-assessment but lacks visibility into industry norms or leading practices.
Industry Surveys and Project Reports
Research reports providing aggregated, anonymous project performance metrics from industry peers offer broader benchmarking visibility. HIGH-LEVEL DATA BUT LACKS CONTEXT
Project Management Standards
Generic standards like PMI's OPM3 provides general benchmark targets for maturing project capabilities But lack granularity for specific industries..
Independent Project Analysis FirmsFirms like Independent Project Analysis specialize in in-depth, proprietary project benchmark databases, metrics and performance insights for different industries and project types ALLOW DEEP-DIVE COMPARISONS. Significant cost for access..
Project Management Associations
Industry PMO associations compile project performance benchmarks based on member surveys results. May lack size for statistical significance..
3rd Party Specialists
Firms focused exclusively on benchmark compilation and analysis for specific industries assemble detailed performance databases. But quality and size vary..
While internal analysis provides a baseline, combining internal metrics with insights from industry-specific external benchmarks offers a comprehensive foundation for improvement..
Recommended First Steps Toward Project Benchmarking
The most successful project benchmarking initiatives start small:
Kick Off with One or Two Priority Areas
Pilot the benchmarking process on a limited set of crucial metrics like cost performance or schedule adherence before expanding to additional areas.
Leverage Internal Benchmarks FirstComplete comparisons of metrics from recently completed projects against older internal efforts to establish capability self-assessments cost-effectively before seeking more extensive external benchmarks.
Partner With Project LeadershipWork collaboratively with project managers, sponsors and other leaders to align benchmarking to real decision-making needs, promoting engagement.
Vet Multiple External Benchmark Options
Thoroughly evaluate relevance, cost and ease-of-use considerations around potential sources for industry benchmarks in focus areas before committing long term.
Expand Benchmarks Progressively Over Time
Upon establishing fundamental benchmarking processes, incrementally expand comparisons to more performance areas, project types, metrics, and data sources. Let demonstrated value fuel broader adoption.
While avoiding unnecessary complexity upfront, this approach sets the foundation for enterprise-wide project benchmarking capabilities that drive continuous improvement.
Addressing Common Project Benchmarking Challenges
Several barriers frequently emerge when launching benchmarking initiatives:
Inconsistent Definitions of Metrics
Using inconsistent calculations or definitions of metrics across projects limits aligning benchmark comparisons. Develop standardized metrics as part of process.
Incomplete Project Performance Data
Effective benchmarking relies on consistent, structured project performance data which is often unavailable without dedicated tools and processes.
Superficial Benchmark Comparisons
Benchmarks often fail to account for variations in project scale, type, risk-levels, technology used and other factors skewing superficial comparisons. Prioritize benchmarks that incorporate normalization and context.
Achieving Buy-In Across Project Teams
The performance gaps revealed through benchmarking may be initially rejected by project managers and staff unless involved through the process. Secure executive sponsorship to demonstrate commitment.
Sustaining Process Improvements
The operational changes suggested through benchmarking frequently fade after the initial push unless ingrained through updated processes and tools with executive backing.
Realizing the Full Potential of Project Benchmarking
To overcome barriers and realize the full benefit of benchmarks:
Standardize Performance Metrics
Align definitions and calculations behind common metrics like cost performance index across teams to allow for consistent comparisons.
Implement Project Management ToolsSystems supporting structured performance data capture and benchmark integration sustain success.
Prioritize Context-Rich Benchmark Sources Seeking benchmarks that account for fundamental variations in factors like project scale and risk-levels ensures meaningful, targeted insights.
Customize Benchmark TargetsSet realistic benchmark targets tailored specifically to your project types rather than arbitrarily adopting generic best-practice targets.
Encourage Benchmarking Process AdoptionWork openly with project managers and teams to tailor benchmarking practices and tools to day-to-day needs, facilitating engagement around performance improvements uncovered.
Gain Leadership Commitment Make benchmarking a C-level sponsored capability upheld through governance policies and processes to maintain changes realized through comparisons.
Committing to these principles allows organizations to maximize returns from project benchmarking for enhancing outcomes.
Conclusion & Next Steps
This guide presents a comprehensive overview of best practices for project benchmarking - leveraging comparisons against industry leaders to fuel continual improvements. To initiate your own benchmarking journey:
Review this Playbook with Project Leadership to align on scope and priorities
Identify Core Metrics currently captured across projects to serve as starting point
Select Initial Benchmark Areas like cost or risk to pilot process on
Research Potential External Benchmark Data Sources to inform longer-term platform decisions
Beginning with a targeted initial benchmarking pilot focused on a few crucial performance areas establishes justification for properly investing in fully robust, enterprise-grade capabilities over time.
With executive backing, a collaborative approach engaging project professionals, and adherence to the proven principles outlined here, organizations can master project benchmarking to drive tremendous gains in consistency, efficiency and strategic results from vital project work.