With this look at performance reporting, we end our ongoing series on “Eight Powerful Project Management Processes” series. These processes are also included in our toolkit, Essential Gear for Project Managers. We hope you have enjoyed this look at eight critical processes to project success.

Performance reporting is another expected regular task from the project manager. Stakeholders, sponsors, and the project team will often ask a common question about any project: “Where are we?” This simple question has a wide variety of possible answers, and it is easy for project managers to become overwhelmed in their effort to report the project’s progress.

Project managers need to overcome these difficulties and produce powerful and effective performance reports for several reasons. First and foremost, decision-makers on the project need data to reinforce their decisions. Effective performance reporting provides that data on a regular basis. Second, reports that are detailed and proactive can help align the team and stakeholders to project objectives, help in procurement of necessary resources, and provide a basis for analyzing trends and forecasting future performance. For these reasons, project managers should develop their performance reporting skills.

In the following sections, we will break down some of the key components of performance reports, describe types of performance reports, and discuss best practices and pitfalls. The main objective with a performance report is to provide project status. Specific measures of this progress could include, but would not be limited to, any of the following:

• Progress on deliverables
• Progress on milestones
• Activities
• Cost/Budget Analysis
• Quality Management Results
• Risks and Issues

In addition, several different types of performance reports can be delivered, including:

• General performance reporting
• Financial reporting, including revenue, cost, gross margin, IRR, ROI, and other financial measures
• Portfolio reporting, including status of all projects in a portfolio
• Quality reporting, including specifics of quality measures such as defects and changes

Best practices and pitfalls include:

1. Considering the audience(s).

The communication plan and stakeholder analysis metrics are key inputs to performance reports because they help project managers identify who needs to receive performance reports and what they expect to see. Different stakeholders may also have different needs with performance reporting; for example, senior-level management might prefer to see summary details, while functional managers working closer to project team members would want more detailed analysis.

When working with different reports for different audiences, there is a potential pitfall of inconsistency in reporting. Project managers need to make sure that different reports are still telling the same story about the project. Hiding unpleasant news from one group is a major pitfall. Transparency and consistency are the two major factors to consider when crafting reports for different audiences.

2. Including trends, variances, and forecasts.

While the main objective of a performance report is to show where the project is at the moment, there are many other key questions to consider. Trends answer the question of how the project has been performing, variances address any gap between planned and actual performance, and forecasts show stakeholders where the project is headed. All of these are important indicators in showing a complete picture of the project’s progress.

Failure to include these and other key items is a pitfall. For example, failing to show trends and forecasts means that the project manager is not showing a complete picture in his or her performance report. Recent data presented by itself, without the context of trends, makes it difficult to fully answer the question of how the project is doing. A report without this data is of diminished value to stakeholders.

Another pitfall is to fail to include risks or issues. It is important for everyone to know what risks and issues exist so that potential barriers and problems can be identified. Failing to include these makes a project manager look reactive when he or she needs to look proactive.

3. Addressing a minimum set of key questions.

If there is insufficient or no feedback on how to structure performance reports, project managers should include enough to at least address the following questions:

1. What is planned for the next one (or two) reporting periods?
2. Are there any critical problems or risks that need immediate attention?
3. What are the differences between the planned and actual schedule and budget?
4. How has the project been performing? (trends)
5. How is the project expected to perform? (forecasts)
6. What was accomplished in the last reporting period?

Below is a sample of what a basic performance report might look like. You can learn more about performance reporting and how to execute this critical process through our toolkit, Essential Gear for Project Managers.

What experiences with performance reporting have you encountered in your projects? Please let us know in the comments.

Essential Gear for Project Managers is a toolkit with the eight essential project management processes you need to deliver projects on time, on budget, and exceeding expectations. Delivered to you via intuitive templates and a handbook describing best practices and pitfalls.