So you've kicked off the project and the team is burning daylight developing the product, but you're not sure how to tell if the project is on track. This is one of the project manager's primary functions—watching and judging true progress and helping make sure the project stays on course. But what does "on track" really mean? There are actually a couple of levels of being on track. First, and possibly what most people think of first, is
"Is the project meeting its plan, including the detailed schedule?"
Many projects track progress by monitoring completion of each task in the schedule. "If the work is getting done, we must be OK." But what about whether the outcome of each task is right? What about a higher level definition of on track—whether a project is on course to meet its overall goals? All these aspects must be watched when judging project progress. Progress tracking is difficult unless you have defined quantitative metrics in the plan to measure progress at these different levels. Here are some different ways to have visibility into whether a project is really going the way it should.
Has the work toward project completion progressed at the rate set out in the plan? Are all the tasks done that should have been done by now? Are interim deliverables getting completed on time, meeting their pacing milestone dates? An example would be whether design concepts were complete on time for the planned Concept Design Review; if so, the progress of this part of the effort met its schedule. Or are tasks taking longer than expected? Are milestones moving, or are people finding extra work that is drawing out the schedule? To track the progress of the project you need to use your plan as the roadmap and determine what actual progress has been achieved to date. Once you have assessed progress versus time you can tell how far ahead, on, or behind schedule the project is.
Are physical, tangible deliverables getting produced on time? To get the most accurate gauge of real progress, don't just track task work. Anyone can say a particular task is 80% complete, if the task is just work that doesn't have a tangible deliverable. Make sure to use physical deliverables as much as possible in your planning, to provide verifiable items by which to measure progress. The more tangible deliverables you have to track—even interim deliverables—the easier it will be to tell if some "thing" (a drawing or part, lines of code that demonstrate a function, reports, something you can touch or see) is done to a defined state.
Are big logical chunks of work coming together such that major milestones are being met? Progress against tasks, in the aggregate, can definitely be an indicator of progress, especially in the aggregate—looking at a set of tasks that should be done by a given time. This is the purpose of milestones. Set them frequently enough, tied not just to one particular task but to a big block of related activity that should be done by a certain time, to get early warnings of schedule slips. This will help you avoid inadvertently using up a huge part of your schedule to generate a fraction of the product. Knowing the gap between the actual and planned state of development of an item facilitates planning the actions to address the schedule slip.
The items above address tracking the schedule progress. Keep the following things in mind for judging whether the project is on track with what is being produced, and on course to meet the overall goals.
What reviews have you put into your schedule for different deliverables? Cross-functional reviews help catch issues with pieces of the project. It's not good enough to be done from a time standpoint. Is it done from a quality standpoint? Does this piece meet requirements? Does it work? How do you know?
What project-level reviews have you built in? It's critical to sanity check whether everything that's being created actually still meets the overarching goals of the project! Being on track also means not letting the budget overrun what management said you could spend, and also making sure that what's being created will still make customers happy.
One useful tool is our Completion Criteria guidelines, which talk about how to define "done" for parts of a project and the whole project, giving you additional quantitative measures beyond the schedule for judging progress. See also Tracking with Visible Deliverables, a set of examples showing how you can track tangible pieces of the project more accurately and project whether the work is truly getting done fast enough. Finally, check out Milestone Table with Driver Tasks for different ways to communicate and milestones that pace different parts of your project.