MEASURING PROJECT SUCCESS BEFORE FINANCIAL RESULTS MATERIALIZE: A COMPARISON OF PROCESS AND FINANCIAL KPIS
- Authors: Andguladze N.T.
- Issue: No 10
- Pages: 12-17
- Section: Articles
- URL: https://journal-vniispk.ru/2411-0450/article/view/353419
- DOI: https://doi.org/10.24412/2411-0450-2025-10-12-17
- ID: 353419
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Abstract
This article examines ways to measure project success before financial results materialize. The nature and scope of financial and process metrics are defined, their comparative characteristics and limitations of use in the early stages are clarified. The problems of forecasting financial KPIs and the role of process indicators as an alternative for managing performance and assessing project success are illustrated. Sets of metrics and an algorithm for evaluating project success in the absence of revenue are proposed.
Full Text
Modern project management conditions are characterized by an increasingly complex organizational environment, the parallel development of the innovation component, and growing internal requirements for performance assessment. Naturally, tracking project results becomes challenging, as the set of metrics and performance indicators expands. Traditional indicators of project success assessment are financial and economic measures associated with time and quality of implementation (the so-called project triangle); however, evidence indicates that the main problem of measuring project success lies in the significant gap between the completion of individual stages and the ability to measure (and, most importantly, to measure reliably) the overall financial result. Thus, a project may be considered successful from a management perspective but fail to deliver the expected benefits to the organization, or, conversely, generate significant impact despite partial deviations from planned parameters. This contradiction highlights the need to distinguish between “financial performance” and “process performance,” as well as to search for tools to link them. This task becomes particularly relevant in the context of identifying ways to measure project success before its financial results materialize, since at the project planning stage it is critical to evaluate precisely the process metrics that make it possible to capture results (managerial and organizational) prior to the emergence of cash flow. In the long term, process performance becomes one of the factors that may influence the financial success of the project, which determines the subject and scope of the present study.
The aim of this study is to characterize ways to measure project success before financial results materialize.
Considering the concept of project “success,” it should be noted that it is multidimensional; the systematization of research in the field of project performance measurement demonstrates the coexistence of various, sometimes opposing models and criteria that reflect both the perspectives of project teams and the perceptions of external parties (e.g., stakeholders). Thus, as early as the 1990s, M.A. Freeman and P. Beale emphasized the multidimensionality of the “success” category and the necessity of taking into account not only financial indicators but also customer satisfaction, team status, and its readiness for future tasks [1]. Later studies support this thesis and propose different sets of indicators that prove applicable under conditions of extreme uncertainty [2-5].
In our view, project success is determined by how well the project’s objectives (including later adjustments), concept, and financial and process performance align. With regard to financial and process metrics, they represent two poles of project evaluation: its outcomes and the manner in which project management is organized. The relationship and interconnection between financial and process metrics are illustrated in Figure 1.
About the authors
N. T. Andguladze
Author for correspondence.
Email: inmil88@gmail.com
Independent Researcher
United StatesReferences
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