Project Measurement: Introducing KPIs and KRIs

Article 2 of 20

Business professionals are well versed in management concepts like the Balance Scorecard and key performance indicators (KPIs); however, new language is being introduced that further advances performance metrics. Key result indicators (KRIs) is one example of an emerging concept and this article attempts to explain the nuance between KPIs and KRIs.

People’s understanding of KPIs are usually confused with KRIs. So what is a KRI? A KRI is the result of many behaviors and activities (i.e. performance indicators). A KPI is the measure of these specific activities and behaviors that lead to KRIs.

A student’s grade on his/her report card is the result of many homework assignments, quizzes, time studying and completing extra problems. All these activities and results lead to a final grade on the student’s report card. The final grade is a KRI – not a KPI like many initially think. Some refer to KRIs as ‘lagging’ indictors of performance, but this is not always true. There are some KRIs that are ‘current’ or ‘predictive’ result indicators. For example, earned value metrics are predictive result indicators as they help predict future performance based on past results.

The amount of time a student plans to spend studying each day or how many extra problems they complete are good examples of performance indicators that lead to results. For baseball players, performance indicators can be the amount of time they plan to spend at the batting cage each day and how many times they plan to go to the gym to lift weights. These activities lead to results, which is why KPIs are considered ‘leading’ indicators of performance.

These everyday examples of planned behaviors and activities can and do lead to improved results. The same is true for projects. Planned behaviors and activities do lead to improved project performance.

The table below provides characteristics of both KRIs and KPIs.

For further reading on KPIs and KRIs, check out David Parmenter’s book, Key Performance Indicators.

Next week’s article will introduce a framework to identify, develop and disseminate leading key performance indicators (KPIs) to increase project performance and improve communication with key stakeholders.

How Can Darby Help?

So what are your metric challenges? Does your project team or organization have identified metrics and associated actions? Is your team spending too much time gathering data for metrics that no one reviews? Darby Consulting has partnered with many Fortune 500 companies to plan and execute measurement initiatives that support a ‘continuous improving’ culture by not only focusing on reporting key results, but also identifying and measuring key performance indicators that lead to improved portfolio and project performance.

About Darby Consulting

Darby Consulting is a leading North American project and change management consulting firm providing project and program management consulting, project support and change readiness services. We serve organizations across multiple industries and provide experienced, certified project and change management professionals who can quickly and efficiently deploy processes, tools, templates and technologies to meet any project challenge.