How do performance measures help me analyze programs?

Performance measures help you assess the efficiency and effectiveness of a program, which leads to better insight into its performance. Performance measures help program managers perform a range of tasks, including:

Identifying areas for improvement: Program managers use performance measures to identify areas where a program needs improvement. They track deviations in expected performance measure numbers, such as actual work plan effort and work plan complete percentage, to identify issues and work to improve them.
Monitoring program progress: Performance measures enable program managers to monitor program progress over time. Program managers can track performance metrics to determine whether a program is meeting its objectives, and identify action plans to expedite progress toward program goals.
Evaluate program success: Performance measures help the program manager evaluate program success by comparing performance metrics to agreed upon benchmarks or goals.
Allocate resources to specific projects or tasks: Performance measures help program managers flexibly allocate resources to projects or tasks as required. Program managers can analyze program performance metrics to identify areas that require additional resources or investment, as well as those areas that have more resources than required.

Program managers can use insights drawn from program analysis to recommend actions to project managers.

Example

Let's say a hospital is constructing a new wing. Here's how performance measures, such as budget cost and cost variance, can help analyze this program:

Track budget cost: Program managers can compare planned construction and equipment numbers against actual costs to check whether the hospital wing construction program is within budget. In simple terms, budget cost reviews help program managers ensure that implementation costs don't exceed the assigned budget.
Identify budget overruns: Program managers can use task and project level cost variance (the difference between the planned and actual costs associated with a project) to see when–and where–a program is going over budget. For example, if the planned costs associated with a specific task is $200,000, but the task needs $30,000 more, the program manager can identify the cost variance, do a quick root cause analysis, work to manage the underlying problems, and communicate unavoidable additional requirements to stakeholders if necessary.
Identify opportunities for improvement: Budget cost and cost variance numbers also help the program manager identify opportunities for performance improvement. For example, if program managers can see that cost variance is consistently high in specific tasks, they can review task progress, effort, and costing numbers to quickly identify issues and work to manage them.
Evaluate program success: As task after task gets completed, and project teams start signing off, the program manager can review budget cost and cost variance numbers in combination with time and effort details to quickly assess whether the program is on track for successful completion.

Program managers can similarly use other program performance measures to identify issues as they emerge, track performance and expenditures, identify areas for improvement, evaluate program success, and so on.