Using metrics chart for tracking projects
Once your project is under way, you would want to periodically check on the financial status.
The indicators on the project dashboard are a good way to see if the project needs any attention:
- if all's green - there's no reason to worry
- if things are orange - you'd want to understand what's causing it
Overall status vs changes over time
By default, Price&Cost shows all metrics at completion - so it takes into account the actuals (time already spent on the project) as well as forecast (the remaining part of the project). This is useful for a quick indication, essentially answering the question: "What is my budget/cost/profit going to looks like if my plan for rest of the project is correct?".
But often when you are in the midst of delivering a project - you want to only spend the time on things that need your attention. If the overall project financial status indication is good to grab your attention for troubled projects, the next question you want to be answered is "Am I already over budget or just planning to be?" or "Have I already sacrificed too much of my profit margin?". If the damage has not been done just yet, you'd want to know "When is it planned to happen?".
In the first case - you already have an issue at hand and you need to minimise any further impact.
In case of a future issue on the horizon - you are dealing with a risk and still have time to mitigate it - either prevent it from happening or minimising the negative impact.
This is where a metrics chart is a particularly useful tool.
Let's say you've started a Fixed Price project with a budget of $45,000 and you are planning for a healthy 56% profit margin. You don't want your profitability to dip below 50%, so you set it as a goal.
Your team are on 2 weeks sprints and the project is planned for 5 sprints.
2 weeks into the project
After a couple of weeks into the project, you can see from the dashboard that your project's Internal Costs at completion is highlighted as underperforming, yet your Profitability is still ok.
With the metrics chart you can easily see at which point in the project is this overage going to happen.
From the above example you can see that you still have 8 weeks (on a 10 week project) before your Internal Cost is in the red. There is still plenty of time to recover.
3 weeks into the project
After the first 2 weeks your team have finished their first sprint and they didn't deliver half of the committed functionality. They've replanned their work and decided they would need plenty of extra time and resources to deliver the agreed scope. And with that they've added an extra 3 weeks to the project and $16,000 of additional costs.
Now you will not only see the Internal Cost but also Profit highlighted as underperforming on the dashboard. That's a cause for concern, especially given the planned profit margin on project completion is just 17% vs the 50% goal you set.
Metrics chart will give you extra insight about when are you going to incur plenty of additional cost and start loosing the margin:
With only 4-5 weeks until you reach a point of no return (as you are unlikely to recover the margin after week 8), you decide to act.
8 weeks into the project - solution
Keeping a close eye on the costs of the project and being smart about resourcing and scope, you've managed to take things back under control. Now, after 8 weeks of hard work - you've managed to get the Profit margin back on track. It may not be there just yet, but things are looking positive.