With the increasing pace of work and growing demands from clients, it’s no surprise that project managers are looking for ways to automate tasks and quickly communicate project insights. In fact, one of the most common requests we receive from our customers is: “How can we automate Project traffic light indicators?”
The thing is – there are many solutions for automated Project traffic lights – and the calculations vary by industry, organisation, and sometimes even by department. This led to our (traffic) light bulb moment: round up 3 ways to automate Project traffic lights that suit a variety of industries and project types so everyone can make their work days a little more productive. Let’s get started.
#1 Schedule traffic light
The ‘Schedule’ indicator is probably the easiest traffic light to automate. With the project schedule forming the backbone of the project tracking mechanism, it’s easy to apply calculations to determine whether the tasks are on-track or starting to fall behind.
The Schedule traffic light we use here at Sensei measures the schedule’s baseline finish date and compares it to the current finish date. As things change during the course of the project, the finish date will usually vary from what was originally planned, approved by the steering committee and ultimately set by the Project Management Office (PMO) as the baseline finish date. This variance can then be used alongside set tolerances to calculate the colour of the Schedule health indicator.
- Green = less than 10% variance
- Amber = 10% to 20% variance
- Red = greater that 20% variance
#2 Cost traffic light
Considered one of the most critical project indicators by stakeholders, the ‘Cost’ traffic light is relatively easy to automate. Whilst the majority of project managers track the project cost to date, we see some folks slip up when they forget to track the project budget over the life of the project. Here at Sensei, we recommend doing both!
For the Cost calculation, we look at the actual spend to date plus the forecast cost which will give us an estimate at completion (ETC). If we compare this figure to our budget, there tends to be a variance as invoice amounts start to differ from planned costs. The tolerances here are as follows:
- Green = less than 10% variance
- Amber = 10% to 20% variance
- Red = greater that 20% variance
For many of us, when we think ‘projects’ the project management triangle of time, cost and scope comes to mind. If logic followed, scope would be the next traffic light, right?
At the best of times, project scope is difficult to track, and even more difficult to add measurements or apply metrics to. Whilst there are some options for tracking project deliverables or monitoring the number or type of change requests submitted, generally, project scope is monitored in other ways like at steering committee meetings or project gate checks.
#3 Work traffic light
Here at Sensei we also deploy a standard ‘Work’ traffic light to measure the effort which was baselined in the schedule and the current effort required by resources assigned to the project, providing resource managers with valuable insights. Again, the tolerances are:
- Green = less than 10% variance
- Amber = 10% to 20% variance
- Red = greater that 20% variance
Whilst organisations can track over ten indicators including risks, issues, resourcing, dependencies, safety, change, and communications, we find that project managers are attracted to Schedule and Cost traffic lights (and the impact they have on the overall project status) like moths to a flame.
Are you currently using traffic light indicators? Whether subjective or calculated, are they used effectively? How are they utilised by both the project managers who set them and the managers who read them?
By Phill Eilenberg
Phill has over 10 years’ experience managing projects and establishing and running project, program and portfolio management offices in government and private sectors. Phill’s key areas of expertise are; working with project managers and PMO teams to establish processes and project frameworks, project schedule setup and analysis, resource capacity planning and project financial planning.
