Key Performance Indicators (KPIs) are a set of quantifiable measures that a company or industry uses to evaluate the success of the project.

Put simply, KPIs measure how effectively you achieve the project goals. They show whether the project is on track, highlight risks and variances, and provide data to support decision-making.

In project management, KPIs are not only about measuring outcomes after completion — they are also about monitoring active projects to guide performance in real time.

Why KPIs matter?

Implementing effective KPIs is essential for both project success and long-term business growth. They serve as the compass that keeps projects aligned with strategic objectives and help:

  • Track progress: Monitor advancement and ensure alignment with objectives.
  • Identify issues: Detect bottlenecks or deviations early for timely corrections.
  • Promote accountability: Offer transparency into team performance and workflow efficiency.
  • Continuous improvement: Turn raw data into insights for smarter decisions.

KPIs types

Understanding KPI categories helps in selecting the right ones for your project. A strong KPI framework includes a balance of leading and lagging indicators:

  1. Leading KPIs predict future performance. They offer early signals that allow corrective action before issues escalate.
    Examples: backlog size, stakeholder engagement levels, clarity of success criteria, or presence of a risk management plan.
  2. Lagging KPIs measure past performance or deliverables after they occur. They confirm what has been achieved but do not predict future risks.
    Examples: deliverables completed, cost or schedule variance, resource consumption, or customer satisfaction after delivery.

Leading indicators reduce performance risk by highlighting potential problems early, while lagging indicators validate whether project outputs and outcomes were achieved.

Categories of KPIs

In addition to leading and lagging indicators, KPIs can also be grouped into categories to capture different performance aspects:

  • Quantitative: Numeric values such as sales figures or defect counts.
  • Qualitative: Perceptions or satisfaction ratings, often gathered through surveys.
  • Process: Efficiency measures like cycle time or throughput.
  • Input: Resources invested (e.g., budget spent on R&D).
  • Output: Direct results of activities (e.g., revenue generated).
  • Outcome: Broader impact or benefits (e.g., market share increase, customer retention).

Questions to ask

Strong KPIs are specific, measurable, and tied directly to desired outcomes. To define them, ask:

  • What outcomes should this project achieve?
  • How will success be measured during execution and after completion?
  • Who is responsible for monitoring and reporting KPIs?
  • How often will progress be reviewed?
  • What process will be used to adjust or update KPIs as the project evolves?

On their own, KPIs are just measures. Their real value comes from how project leaders use them: to spark discussions, uncover root causes, and improve performance. By balancing leading indicators (to prevent issues) with lagging indicators (to confirm results), teams can create a measurement framework that both guides project execution and demonstrates long-term value to the organization. .