KPI of the Day – Business Consulting (BC): $ Backlog of commissioned projects
Measures the total value of contract commitments to be executed in the future.
The value of a backlog indicates future revenue to be generated. Also, it indicates the workload awaiting, as a great backlog can lead to difficulties in fulfilling contract commitments.
Workload is an important causal factor for employee satisfaction and employee engagement. Moreover, the amount of workload undertaken determines schedule adherence, project efficiency and project quality. In the business consulting industry, the $ Backlog of commissioned projects can be used to quantify workload. The greater the backlog, the higher the workload.
Therefore, managers have to be very careful about interpreting the data for this indicator. On the one hand, the $ Backlog of commissioned projects indicates future revenue. On the other, the higher the amount of workload outstanding, the longer it takes the company to cash in on that revenue.
In this respect, it is very important that managers find the resources to cash in on the $ Backlog of commissioned projects as soon as possible. This is commonly achieved by looking into related indicators such as % Staff utilization rate to assess human capital capacity or % Adherence to schedule estimate to evaluate both efficiency and labor productivity.
By looking into the % Staff utilization rate, managers can decide on hiring more people to redistribute workload and reduce the $ Backlog of commissioned projects. By monitoring the performance of projects against their established schedule, managers can uncover gaps in project execution.
Setting milestones is therefore one of the better practices in tracking the progress of projects company-wide. Although they might vary depending on the industry, the common milestones encountered are project initiation, project planning, project execution, and closure. Setting milestones and regularly monitoring progress against those milestones ensures that projects are kept on track and prevents the $ Backlog of commissioned projects from becoming stacked.
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