Project management is the combination of systems, techniques and people used to control and monitor activities undertaken within the project.
Projects undertaken by organizations are similar to ordinary operations as they are planned, controlled and executed, but differ in a way that projects have a defined beginning and end, have resources allocated specifically to them, intended to be done only once with clear-intended end-result. Common examples of projects include producing a new product, service or object, changing the structure of an organization, developing or modifying a new information system, implementing a new business procedure or process. The objective of a project management is a successful project. A project will be deemed successful if it is completed at the specific level of quality, on time and within budget.
That is why the indicators with internal perspective include budget allocated to budget spent ratio. This indicator is essential as it shows whether the project is completed within the budget. The other important indicator in this group is the evaluation of the project results by the stakeholders of the project. This indicator reveals whether the project results meet the quality requirements. The time allocated to time spent ratio shows whether the project was completed in time. The work hours allocated to actual ratio can be regarded as supportive to the indicator of general time. One more indicator with internal perspective presupposes the control over activities planned and executed, it can be regarded as supportive to the above-mentioned indicators as well. Besides, there is the indicator that shows if any shortages of any resources occur during the project. All these indicators are measured at the stage of control or during the post-completion audit.
Another group of indicators that are directly connected with the project management activities are the indicators with growth and development perspective. They include conflict resolution, employee turnover, risk assessment and company's expertise. These indicators are also measured at the final stage of the project except for risk assessment and help to evaluate its success. Risk assessment is usually carried out at the stage of planning and its main goal is to calculate as precisely as it is only possible the likely risks that may arise from the implementation of the project and take measures aimed at their reduction exercising such strategies as, for example, avoidance, reduction, transference and absorption.
Two groups of indicators with financial and customer perspective sometimes may not seem to be directly applied to the evaluation of the success of project. However, the majority of projects are aimed at the improvement of the organization's performance that is to say at the increase in revenues, cost reduction, cash flow optimization, the improvement of product/ service quality, the expansion of operations, etc. Most of the indicators suggested in these two groups are to be measured before and after the implementation of the project taking into consideration some other projects or activities that may influence these figures too such as advertising campaigns (by the way, they also may be regarded as separate projects). The data for calculation is easily obtained inside the organization that is why it is not difficult to measure the performance using these indicators.