Essential KPIs for an Improved Software Development Process

During a development process, it’s extremely important to know for sure if your team is on track or not and ensure that the software meets all the requirements. For this purpose, using KPI metrics is crucial, as they help you get a high-quality product and a productive team that doesn’t miss deadlines.
A Key Performance Indicator (KPI) is used to evaluate a certain project, team, or developer, demonstrate the effectiveness in achieving certain business goals and monitor achievements and failures at different times. Various metrics are used in important business processes, but are there certain metrics that evaluate the software development most accurately? In this article, we’ll cover the most important KPIs to measure software development that will help you stay accountable to the goals you or your company set.

Software Development KPIs Explained

KPI is an indicator of success in a certain activity or in achieving certain goals. We can say that KPI is a quantitatively measurable indicator of actually achieved results. A good KPI must be SMART. It means that a metric should:

• S - it means that a metric should have a specific purpose (relevant to software development);
• M - it signifies that a KPI should be measurable so that it is easily evaluated and compared with other indicators at different times.
• A - the KPI should be attainable and actionable; it should create positive results both for a team or end-users.
• R - it denotes that the KPI should be relevant to the performance of a certain software development company.
• T - it means that the KPI should have a time limit and represent a value over a given period (a week, year, month, etc.)

Why Are Metrics Important in Software Development?

Using the right KPIs is extremely important because they bring certain benefits to your project. Namely:

• They contribute to an increased ROI (return on investment);
• KPIs help you make sure your team acts as one unit and optimize working processes;
• Key performance indicators outline a clear picture of business perspectives;
• The right metrics help you analyze and determine the weak sides of the devs and eliminate them;
• Key figures make sure the project is implemented on time and within budget;
• These lead indicators increase brand loyalty and retain existing clients;
• PIs create an effective business development strategy.

The Main KPIs in Software Development

There are different KPIs that reveal various aspects of the software development process. We will focus on the main Agile metrics that make a difference to today’s software teams.

Velocity

What Is Velocity? This is one of the key performance indicators of software development. It indicates the amount of work that your team can accomplish in a given amount of time, known as a sprint. Velocity may be measured in man-hours or story points.

What Is Velocity?

• It’s great for forecasting as you may predict the number of iterations a new project requires;
• Helps to plan future sprints.

How To Measure It?

Velocity is usually measured during each sprint and to estimate the amount of work, you should know the average speed. For example, if your team completed 40 story points in the first sprint, 50 in the second, 50 in the third, and 60 story points in the fourth, then the average velocity is 50 story points in one sprint. By knowing this value, you can accurately predict how quickly your team will complete the project. For instance, you need to complete 300 story points, which means that your team will need 6 iterations to complete the project. If velocity is high, then team productivity is increased and an additional value for your customers is created. However, at the same time, do not focus only on velocity, take into account the high-quality performance of the team. For example, increasing professionalism and gaining new experience increases your team’s quality and performance, but does not necessarily increase its velocity.

Sprint Burndown

What Is Sprint Burndown?

This metric shows the amount of time remaining to complete planned tasks and allows your team to manage the progress and stay on track. If you see that your team may not achieve its goal, then you need to plan for making certain adjustments, monitor if the load is correctly distributed, and if the work has been delayed for a certain period of time.

Benefits

• Helps understand if a team meets the deadlines;
• Makes it possible to track progress;
• Keeps the team informed of any obstacles that may arise.

How To Measure It?

To visualize the workflow, special charts with the X and Y axes are used, where the X-axis is the vertical axis, which represents the story points, and the Y-axis is the horizontal axis, which shows time. The dotted line in the diagram stands for the amount of work remaining in the sprint, and the blue line represents the actual state of the workflow. If the dotted line is below the blue line, it means that the team is doing everything on schedule. However, if the dotted line is above the blue line, it means the project is behind schedule and adjustments need to be made.

Cycle Time

What is Cycle Time?

This metric indicates how much time a team spends working on a specific task. This metric allows you to assess the effectiveness of the development process, as well as predict how quickly your team will be able to provide new features to customers.

Benefits

• Allows you to assess the overall productivity of the team and the speed of task completion;
• Helps to identify weaknesses and slowdowns in the workflow;
• Ensures accurate predictions of product and feature delivery.

What is Cycle Time?

The cycle time is calculated using the following formula:
α - β
α means the end date of a cycle; β stands for the start date

For a better understanding, use a visualization technique. For instance, a chart, where you will indicate the time spent on tasks. The main goal is to determine the cycle times for similar processes. A shorter cycle time usually means the team is working more consistently, while a longer cycle time can indicate potential problems in your team’s process.

Release Burndown

What Is Release Burndown?

Release burndown indicates the release progress. This metric helps to check if the team will be able to release the product by a certain date. If developers cannot meet deadlines, then they should inform users and stakeholders of the delay or reduce the amount of work to release the product on time.

Benefits

• You can see how your team works through the backlog;
• You can understand how the added or subtracted scope of work affects the progress of the team;
• Allows you to predict the number of sprints that need to be completed to complete the project and the release date in accordance with updates in the scope of work.

How To Measure It?

You can use a release burndown chart to monitor your progress and stay on track during every sprint. Use two axes - the horizontal axis shows the sprints and the vertical axis stands for story points.

Release Burndown

There are many KPIs for software development that help make the process more organized and predictable, help identify team weaknesses, address them, and inspire all team members. As a result, you will have a more efficient and organized process, and the project will be completed on budget and schedule. This will have a positive impact on the customer experience and help you retain existing customers and attract new ones.