The crucial software development metrics and KPI's to level up your project

Over the years in the software development industry customers have regularly made attempts to measure the performance of the software teams they work with. That makes sense, doesn't it? As a client, you pay for the work done. Your wish is to understand whether or not the team meets the deadline, how the budget is used. After all, you want to know if you get the product, don't you?

But, take it to the bank, every software team is also interested in measuring their performance. The high standard of professionalism influences which projects the experts are able to work with, whether there is a point for their growth here.

Imagine that the team is reachable at all times and it will take care of giving the answers. Everything seems to be going well, there is even some result. But once in a while, there is an intention to ask your team the following questions: "What on earth are you guys doing? Where are the features I asked for? Why is this taking up so much of your time?"

By setting software development KPIs you can avoid such unpleasant situations.

Are you wondering what KPIs stand for and what are the benefits of metrics in software engineering? That is what our current article is dedicated to. Stay tuned.

What are the project metrics in software engineering

The term software development metrics (in other words, KPIs, Key Performance Indicators) refers to the criteria for evaluating the productivity of the software team. By applying these metrics, customers know if their projects are on track. For developers, it will also ensure that all tasks agreed are properly carried out.

All these metrics can be divided into 2 groups depending on the areas they relate to:

• Software metrics. They are used to measure the quality of a software product.
• Project metrics. These metrics are used to understand how effectively project teams work and whether something is causing some inertia in the workflow.

These are general issues to take into consideration. But it must be taken into account that there is still no single list of widely used metrics.

Where is the difficulty? The point is that common KPIs are performance-oriented, not results-oriented, which prevents reliable measurement of software development performance.

At the same time, engineering KPIs matter, and that is why:

1. What can be measured contributes to success;

2. Focusing only on metrics can get you too far from your key business objectives.

The good news is that if indicators do not become an end in themselves, they help improve the product and achieve long-term business objectives. More about how software metrics can be beneficial for business see further below.

The main benefits of metrics in software engineering

The first question a particular metric should answer is: If a team follows a metric, what should happen after? In other words: What is the metric aimed at? What business goals does it help achieve?

Software development metrics do not matter without being backed up with business goals.

In terms of business benefits, metrics matter because they help remove the ambiguity inherent in software products. Thanks to KPIs applied, any problem that occurs can be quickly detected and resolved. By applying the project metrics in software engineering, it is possible to anticipate plausible difficulties in time and even avoid them. The progress of the project as a whole and each task separately can also be controlled.

All the above gives you a better understanding of how successful the project team is and whether it works within the budget and business goals set.

Process tracking and results evaluation deliver the following benefits:

• Reducing project costs.
• Increasing return on investment.
• Correct distribution of tasks.
• Healthy and overtime-free workload on specialists.

Measurement makes you aware of how the things with the project are going, awareness results in a proper resource allocation and risk-mitigation measures.

How to choose the suitable metrics? Different approaches can claim to fit the bill. The most applicable ones are considered below. But first, let us see when there is a need for engineering KPIs.

KPIs for software development: when they are needed and where to begin

From the project manager's standpoint, a fine-grained measurement starts either after a large failure has occurred or when it turns out that a month has passed without closing any ticket.

It becomes clear: a workflow based on gut instincts is inappropriate; clear-cut indicators are needed to achieve the client's business goals. Where to begin?

As a starting point, put the phrase “best KPI for software development” in Google search box to get multiple answer choices. You can find the “team velocity” among them.

What does team velocity mean? Is this the number of features completed or hours worked? Or should the lines of code be counted?

The purpose of this article is to give you more than just a theory (Google is full of that knowledge). It will help you better understand if the team is doing its best to make your business successful and how to increase its efficiency.

Key criteria when choosing software implementation metrics

Here is what should be considered when creating a list of development metrics:

• Measurability. Looking at the metric, you need to find out whether it can be represented in figures or percentages, whether it is calculable. Figures can prove useful when you go deeper into reports.
• Re-application. Answer the following questions: Can this metric be used regularly? Will it positively affect the quality of the product or workflow?
• Availability. Can an average development team achieve the objectives stated without any significant changes in the workflow or approach?
• Clarity. Is this metric clear-cut enough? Does each team member understand this metric the same way?
• Practicality. All metrics should be as true to life and the real working environment as possible.

Specific software development metrics examples are taken up later in the text.

Metrics to avoid when measuring software team productivity

The very idea of ​​measuring the effectiveness of the development team needs to be further developed. All metrics used are easy to game but outmoded ones. They do not drive high team performance.

That's what they look like:

The number of lines of code written. This approach is misleading in terms of a fair team assessment. Does a writer become more convincing by making his or her articles longer and longer? Obviously, not. What still holds true today is that the quality reigns supreme. Sometimes, a few perfectly written lines of code can win hundreds of lines written haphazardly. Interestingly, counting the number of lines of code as a KPI makes developers do worse work. This curious fact can not be ignored.

The number of hours worked. As practice shows, it takes less time for professional tech talents to perform better. According to studies carried out by Stanford University, specialists who work more than 40 hours a week are more prone to error. Their irritability and emotionality are increasingly growing. Thus, counting hours worked is not the best metric.

Bugs detected. Such a metric might be the case. But how should productivity be measured by using it? It is necessary to take into account the nature and causes of bugs, whether they are repeated, and so on.

Story points completed. Often, team performance is measured by the volume of work done. This is an ambiguous approach. Think about it. You can complete 50 tasks a day and seem productive while avoiding any and all complicated tasks. With that being said above, we can assume that the fulfillment of a large number of easily accomplished tasks can't be considered as a key performance indicator.

Are there better ways to measure software team productivity? The answer is right below.

Steps to take to measure software team’s performance for sure

The truth is that there are no universal metrics that give a clear-cut answer about the productivity of each developer and the team as a whole. As you can see, each of them has its shortcomings. But we have to move on.

Further steps to be taken:

1. Build a system tailored to a particular team to measure its productivity.

2. Take into account such factors as team structure, software development methodology, type of work, and other details that make the team stand out.

But first and foremost, set the key performance metrics. As it has proven, they are usually influenced by two indicators:

• amount of work;
• quality and complexity of work done.

Generally speaking, when it comes to metrics for measuring team performance, traditional approaches are applied. They measure everything but the main thing which is a success.

Measure success, not performance

It is believed that by measuring the software team productivity its success can be predicted. What are the prerequisites of success? A team might be expected to work according to specific conditions to be able to provide value to a client.

What does all this mean? It means that the software team should work:

• Quick. Once you are ready to get started, get started.
• Safely. By providing the client with the new experience, it is prohibited for the developers to break the old one.
• On-time. Today is worth working on what a client will ask tomorrow, not what he/she wanted two months ago.
• All the time. Do not stop benefiting the customer.

And one more thing: If you can do better, do it. It will be a sign you are in good shape.

Engineering KPIs to start with

This is what specific metrics that have practical application look like.

Sprint burndown

This metric allows you to determine what is actually achieved within the sprint.

How to measure:

Typically, teams use two-axis sprint burndown charts with a graphically displayed ratio of time to the number of tasks completed and not completed.

Another tool to use is Jira Software Scrum. There are also two axes - horizontal and vertical - showing the ratio of the tasks left and completed. As a result, process dynamics can be monitored.

Benefits:

• Sprint burndown helps keep team members up to date with possible obstacles.
• This metric can be used to find out whether the team controls the forecast of its effectiveness.
• It can be used to determine what actions to take to act on a timely basis.

* The same metric can be applied to control the number of sprints over a given period.

Lead time / cycle time

This KPI shows how long it takes the team to solve the problems. It is assumed that the Lead time will be measured in minutes rather than months. In case, a team is client-responsive and aimed at pushing the code into production as soon as possible, the Lead time should be continuously reduced. It is possible by reducing the decision-making chain.

How to measure:

• Count the number of days (sprints, hours, months) between the start date and completion date.
• Visualize data showing the process and the amount of time it took to solve a particular problem.
• Track the cycle metrics needed for tasks of similar complexity levels. Even if the cycle time is different for each of them, the information obtained will help identify weaknesses.

Benefits:

• This indicator provides information about the overall team performance.
• The work of technical experts becomes predictable.
• Workflow bottlenecks are noticed and eliminated.

Team velocity

This metric shows the amount of work performed by the team in a single sprint. As a rule, the workload is measured in story points or hours. Knowing the velocity at which the team is trying to run helps predict how it will handle the lag.

This metric is specific. It is only used when the number of iterations is planned. In other cases, it can only distort the performance expectations of the team. There is a temptation to focus on the number of units as an end in itself.

How to measure:

By analyzing the average speed for each sprint. If a single sprint takes several weeks with a certain number of story points completed during that time, it is possible to determine the average number of story points per week.

Benefits:

• Useful for future sprint planning and forecasting.
• It indicates whether something is interfering with the team, how well the changes made to the workflow are working.

Cumulative flow

This indicator reveals the flow of tasks over a certain time.

How to measure:

• Use graphs to visualize the most important indicators of software development, such as work in progress, time cycle, and throughput.
• By using a graphical view of the workflow, it is easy to see at what stage more tasks appear and whether the team can handle this workload. On the other extreme, it is quite clear where the throughput exceeds the norm.

Benefits:

• This KPI shows how stable the team is.
• It ensures that all stages of the work are consistent.
• It helps make the process more predictable.

Defect escape rate

It is assumed that this indicator will show how many defects were detected during the development process and at the testing stage.

The lower this indicator is, the better. With a low rate, the team is guaranteed to get a high-quality code.

How to measure:

• Analyze at what stage of development defects have appeared.
• Find out how often defects occur among all projects the team is tasked with.
• What is the ratio of detected defects to eliminated ones?

Benefits:

• KPI helps identify defects in time, preventing the release of a low-quality product.
• With each project, subject matter experts strengthen their capacity to manage defects as efficiently as possible.
• Each team member can better optimize the workflow by adjusting the number and progress of tasks.

The most overlooked metrics

There are other metrics that are often underestimated or simply not taken into account. Some of them are listed below:

Deployment time. This is a measure of the amount of time it takes to deploy in production code. Typically, this value is measured in minutes. It should be low because it affects Lead time.

Deploys per day. How much time code is deployed per day per developer? Ideally, each developer should be assigned multiple deployments. If a team does not deliver value to customers every day, it does not deliver value to them at all. What is the point of team like this?

Open/close rates. This indicator shows how many issues are reported and closed in a certain period. More significant than the number of issues is the general tendency regarding the key challenges faced by the team.

Security indicators:

• Final incidents. This is an indicator of how many devices, communication points, equipment were infected with a virus.
• Mean time to repair (MTTR). On security issues, this is a measure of how much time passes between detecting a failure and correcting it using working methods.

* Once created, the list of metrics can (and certainly should) vary to maintain its ability to make changes.

Getting ahead of customer expectations

All these metrics look reasonable and make sense. But do they provide reliable information about team workload? They don't. But still, you are provided with information that can be used to predict the team's success prospects.

How to get it right? Set a goal and pick up a metric by which you can find out whether or not the goal has been reached.

Ok, but how can you get the developers to work so effectively? Of course, this question is on the tip of your tongue. We are about to answer it.

To keep up with stakeholder’s desires, the team has to be one step ahead. They should consider the question: What if we are ready before a client makes a request?

Speaking about performance, it is important to be aware of the following. Before delivering the value to customers and being productive, you must first become productive within the team. The high-priority task for the team is to create a system to measure its performance. It does not matter how many new features are created or how innovative they are if the performance of the specialists and the team remains low.

How to come to an understanding that the performance is really low and is there room for improvement? If the team provides value to the customer in a timely, safe, and continuous manner, it means that the customer's business wins and the team ultimately works efficiently.

This can be surprising, but as our practice shows customers often do not care:

• How busy the team is;
• How many story points have been delivered.

Why is that? A team can be fully loaded, but at the same time the priority of its tasks can be mistakenly. The clients need to get what they want at the right time. Do you agree?

Customer satisfaction KPIs to consider

The software development process has changed a lot over the years. Along with the development of technology itself, new approaches to project management have also emerged. Agile methodology has greatly contributed to the improved workflow and productivity in general.

What are your methods to assess the productivity of the team you are cooperating with? It is hard to explain in a nutshell, right? Actually, performance issues are those causing pain to developers too.

Software KPIs are just as difficult to set as they are to measure. And even if KPIs have been set once, each new product requires a set of custom-tailored metrics. As a rule, performance metrics are supposed to be available at any time in the form requested.

As a client, you do not have to be well versed in the software KPIs. All you have to do is to get a high-quality product and also be aware of the progress your team has made. To get your needs met, set the clear-cut software development KPIs at the very beginning of cooperation.

What these KPIs could be:

• Business metrics. They are usually presented for discussion as charts and backed up with an explanation. The extent to which your business goals are achieved shows how successful the team was in setting its goals.
• Product-related metrics. It makes no sense to get the features that you did not seek. The point of ​​numerous iterations is to continuously verify how the implemented functions are up to quality. It does not matter how advanced the feature is if you do not need it and it will not add any value to the product.
• The KPIs set for each iteration. They are applied to continuously monitor the product compliance and suitability for end users.
• Release frequency. High-frequency updates can mean a great deal for you in terms of customer delivered value. With each release, you can get a ready-made product without having waited until the software development life cycle is complete.

There is still no one-size-fits-all set of metrics that would immediately provide you with an answer on how productive the team is and what value it brings to you.

What really matters is the short lines of communication between you and the team. It should be clear that the team and you have a shorthand to address challenges as quickly and efficiently as possible.

Bottom Line: So, why engineering KPIs matter?

The metrics described above are easy to understand even for non-tech-savvy experts. Their application can make it clear for non-technical managers how to assess the efficiency of software teams.

The use of clear KPIs helps streamline the process. This is beneficial for teams of different levels. Even if the team consists of only high-skilled professionals, application of software KPIs will definitely help reduce Lead time and release high-quality products.

As far as you can see, quantitative KPIs, such as the number of lines of code, the number of bugs detected and corrected, etc. are not the reliable software development quality metrics. To properly measure team productivity, it is better to combine quantitative and qualitative KPIs.

The main approaches to measure team productivity we at DDI Development use on a regular basis are the following:

• Customer satisfaction surveys. By conducting them, we can be aware of customers’ attitudes towards our performance. All this makes it easier for us to reach an agreement on every issue throughout the project.
• Peer code reviews. Our senior developers perform sample code analysis. As a result, we can get clean code at any stage of our work and prevent sad errors.
• Competency check. We check how qualified each technical talent is. It becomes possible by establishing a correlation between the quality of the code written and the time spent on writing the code and fixing the bugs.

How these approaches are helpful in terms of software team productivity? By applying them, we constantly maintain our flexibility and improve our skills to work equally effectively with any project, no matter how challenging it is. Be sure, a team of highly productive specialists will work on your project. Factors that influence their efficiency can be measured; you already know what it takes to do it.

Do you have any questions? Please feel free to contact us for further information.