Milestone-Oriented Usage of Key Performance Indicators – An Industrial Case Study

Background: Key Performance Indicators are a common way of quantitative monitoring of project progress in modern companies. Although they are widely used in practice, there is little evidence on how they are set, and how many of them are used in large product development projects. Goal: The goal of this paper is to explore how KPIs are used in practice in a large company. In particular, it is explored whether KPIs are used continuously or only during short, predefined periods of time. It is also explored whether software-related KPIs are reported differently from non-software-related KPIs. Method: A case study of 12 projects at the Volvo Car Group in Sweden was conducted. The data from the project progress reporting on tools was collected and triangulated with data from interviews conducted with experts from the company. Results: KPIs are reported mostly before the milestones and the manual assessment of their status is equally important as the automated data provision in the KPI reporting system. The trend of reporting software-related KPIs is very similar to the non-software-related KPIs. Conclusions: Despite the documented good practices of using KPIs for project monitoring, it is difficult to develop a clear status-picture solely using quantitative data from progress reporting tools. It was also shown that the trends in reporting the software-related KPIs are similar to the trends in reporting the non-software related KPIs.