Businesses that fail to set reasonable metrics to assess their status will have an unclear picture of where they stand. The same is true for software development teams, which is why they use key performance indicators (KPIs) to keep them moving forward. But which ones should they choose?
From code churn to burndown charts, there's no shortage of KPIs that execs can use to see how their project is coming along. Some KPIs measure efficiency while others break down project milestones into edible bites. To get an accurate picture of their status, it's crucial to use the right one. In this guide, we'll show which KPIs are most useful, what insight they provide, and which members of your team should be tracking them.
What Are Software Development KPIs?
KPIs are any metric that's used to monitor the performance of a business or development team. While traditional software development KPIs consisted of the lines of code written or the number of bugs resolved, these fail to give adequate insight into the actual business value that your development team is adding to the project. This is especially true for teams that practice Agile software development, which takes a more collaborative design approach and can be more difficult to assess.
Why You Should Use Success Metrics Like KPIs
From personal endeavors to corporate vision statements, the presence of objective, measurable goals can help keep a business on track. Metrics like KPIs serve a similar purpose, offering data-grounded evidence that a software development team is achieving the objectives that have been set forth.
But milestone marks aren't the only thing that KPIs can be used for. Some other benefits of KPI usage are:
- Improved organization, by characterizing the processes involved in moving a project forward.
- Clearer evaluation, by helping team members discern where their project stands.
- Resource allocation, by revealing which stages of the project will be the most difficult to complete.
- Process iteration, by showing teams how they can improve their methods for next time.
These benefits are valuable enough, but further downstream, businesses can anticipate a shorter project design journey, greater productivity as efficiency improves, and more savings as projects will require fewer resources to complete.
Software Development Manager KPIs
In industries ranging from construction and tech to healthcare and finance, software development managers oversee their teams to make sure the project gets done. Their job is to analyze, monitor, and evaluate the project's trajectory and to develop short and long-term solutions that scale.
As the leaders of their teams, software development managers should be looking at KPIs that reveal their project's overall health. Software development manager KPIs should give insight into which hurdles must be addressed, where the team is thriving, and opportunities for future growth. Here are a few that do the job best.
Velocity
To rightly assess your team's productivity, you need a baseline first. Determined by the amount of work that your team can complete in a single set period (often known as a sprint), velocity gives you an estimation of how quickly your team can move.
Velocity is one of the most important Agile software development KPIs, and it can be measured in several ways. The most common one is to use story points that show how much work goes into completing each stage of a product — but these must be approximated first. Whichever measurement method you use, be sure to check your team's velocity several times so that you can get an average value for more accurate estimations.
Sprint Burndown
While velocity shows the average completion rate for your team, sprint burndown shows how much work is accomplished in a single sprint, making it a narrower KPI.
Often measured with burndown charts, sprint burndowns are useful not only because they reveal how much work is done per sprint, but they also can help teams adjust their efforts when their performance doesn't match the expected values.
Beware of relying excessively on burndown charts, though. As a project proceeds, you may find additional layers of work to be done that were not accounted for in the original chart. You can't extrapolate how much longer the extra tasks will take, so your sprint burndown may need to be adjusted — especially if initial estimations were off.
Release Burndown
One of the benefits of software development manager KPIs is that they give leaders something to offer stakeholders who are eager to know how their project is progressing. Similar to sprint burndowns, release burndowns use charts that plot the number of story points per sprint, and they show if the project is moving along as scheduled.
Release burndown charts are a helpful deliverable for demonstrating progress to investors, customers, or execs, but they can also illustrate any hurdles that the project has encountered. Such delays can be frustrating to stakeholders. Release burndown charts can ease their concerns by showing them where the setbacks occurred, how or if they've been addressed, and when they can anticipate receiving their ROI.
Cumulative Flow
As with all types of project management, it's the job of the software development manager to keep the work on every subsystem flowing smoothly through the pipeline. Failure to do so could create project bottlenecks as incoming tasks pile up, which could grind development to a halt.
Cumulative flow measures how many tasks enter and exit a development team's workflow over a given period of time, as well as how long it takes to complete them. This metric is part of Kanban, an efficiency metric first created for lean manufacturing in the automotive world and adapted for development purposes to help managers balance their software logistics.
Cumulative flow diagrams (CFD) are often used to measure this KPI, as they provide concise insight into cycle time, throughput, and the number of projects in progress. Consisting of a stacked overlay of each task's status, the Y-axis represents the number of tasks completed, while the X-axis represents the time taken to bring the task from one phase to the next. They're only meant to plot completed tasks vs. time, though, so CFDs should remain horizontal if stagnant or trend upward with increased flow. They should never slope downward.
Flow Efficiency
Delays are inevitable in the software development industry. The beginning of one task must sometimes be put off until another is complete, and by the time you add in meetings, iterations, and the breaks that workers need, the amount of time spent actually working on the project may be lower than you think.
Flow efficiency expresses the total number of hours where work was actually done as a percentage of the project's lead time, and it's an essential software development KPI. It's expressed by the following simple equation:
Flow efficiency = [(Total work)/(Lead time)] × 100 or
Flow efficiency = [(Total work)/(Total work + wait time)] × 100
While they may not notice specific areas of downtime unless they calculate the efficiency of each task, managers can use flow efficiency to get a general feel for how much work goes into the lead time for each project. Some estimate that a normal flow efficiency is as little as 15%, with 40% being well above average — an indicator of how many delays your project may encounter.
KPIs for Software Developers
While software development managers coordinate the efforts of each individual member, software developers write the code that creates the final product. That means software developers need not be weighed down with metrics that assess the entire project trajectory — they simply need KPIs that track the progress and status of the final code. These KPIs are the ones software developers should evaluate.
Availability and Reliability
What use are software, platforms, or apps if they don't perform when they're needed? Developers must know if their products are operational upon request so that they can debug them when they crash and ensure the quality that the customer deserves.
Availability and reliability both seek to measure how dependable software is, but although they're often used interchangeably, there's a difference between the two. Availability is the probability that a system will be online and operational at a given point in time, while reliability is the probability that the system will perform up to certain requirements at that time. Determining reliability will depend on the criteria for adequate system performance, but availability can be determined by the following:
Percentage of availability = [(total elapsed time – sum of downtime)/total elapsed time] X 100
While continuous availability is ideal, some disruptions are bound to occur. 99.999% reliability, often referred to as "five 9s", is considered as optimal as possible, and it translates into an average system downtime of just over 5 minutes per year.
Clarity
For a developer to write code that performs the software's required tasks, they must first understand what those requirements are. Clarity is a software development KPI that measures how well the programmer grasps the objectives their system is designed to fulfill. The higher this KPI, the better your developer understands the requirements of your project.
Code Churn
The more code your team has to write, the longer it will take to complete your project — and that's why code churn matters.
Code churn is the amount of code that's rewritten over the span of your project, and it's another way to assess how efficiently your code is progressing. Software must repeatedly be tested and debugged before it runs correctly, so every time an error is detected, the code must be amended, costing valuable time and resources. Adding new features along the way will also mean that the code must be rewritten, and every time this occurs, the potential for error increases — along with the project completion time.
To minimize your code churn, test your code early and often, and scale back the number of changes when possible.
Code Quality
The higher the quality of your code, the better your software is likely to perform — but establishing a quantifiable metric can be difficult.
Determining how well your code is written isn't measured simply by a number but rather by a series of objectives that it should meet. The most important one is that your code should cause your software to function as it's supposed to. In general, though, quality code should also be:
- Clear: able to be read by your team members — and yourself later on.
- Reliable: able to successfully operate over a given time period (see "Availability and Reliability" above).
- Maintainable: able to be revisited and kept up for quality and scaling purposes.
- Testable: compatible with analyzers and testers, both human and automatic.
- Portable: able to be applied across multiple different platforms.
- Reusable: able to be repurposed for other projects down the line.
There are different ways to achieve these metrics, and while no set definition exists for some, the use of static analyzers for testing and multiple compliers for maximum portability can help improve code quality. Other methods include adopting and enforcing coding standards, training developers according to those standards from the start, and following industry-established best practices.
Code Stability
Like code quality, code stability can be difficult to measure. The result of code stability is healthy operation.
Whether it's measured in alteration frequency, resulting downtime, or the risk associated with changes, code stability refers to the potential impact of changes of the code. The more stable a code is, the lower the risk each change has posed to the system, making it safer for users and developers alike.
Code Simplicity
Complex code is high-risk code. This sometimes creates software flaws downstream. Code simplicity ensures programmers are taking the shortest possible path between two points with as few detours as possible.
While there are several ways to measure code simplicity, one of the most common software development KPIs for doing it is McCabe Cyclomatic Complexity. This metric tracks and measures the number of linearly independent paths that are present within an application's source code, and the higher the number, the greater complexity and risk it has overall.
Code simplicity is a more general software engineering KPI, and there are multiple metrics you can use to measure it.
Testing Quality
Errors are an inevitable part of the software development journey, so code must be tested thoroughly and often. This KPI measures how well a developer tests the written code, whether it's manually or with tools.
The Forbes Technology Council released a set of 13 recommendations for creating a best-practice QA environment, and while they could be applied elsewhere, teams could improve their quality testing by implementing them across the board. They are:
- Ensure it’s a top-down effort
- Define clear processes for the team
- Start the process early
- Set up quality gates at each project phase
- Prioritize transparency
- Leverage automation
- Enable cross-functional collaboration
- Be as objective as possible about your own work
- Set up a system of continuous, integrated quality control
- Test across multiple devices
- Put a mandatory peer review policy in place
- Rotate team members through deployments
- Document and test every ‘fix’
Whichever metric you choose, make sure your quality testing KPI reflects a software developer's ability to test their code effectively.
KPIs for Development Teams
While software developers and managers may track the status of their projects from different standpoints, they still need common standards to keep them on the same page. Every team needs a way to monitor their overall health, and these team KPIs can help do just that.
Code Coverage
Similar to testing quality, another way to ensure high code quality is to evaluate code coverage. Defined as the percentage of your team's code that executes successfully, code coverage is often used in test-driven development, which consists of these stages:
- Writing a minimal block of code (unit test)
- Running the unit test (which is expected to fail)
- Rewriting a minimal fix
- Refactoring until it fits the simplicity criteria
- Repeating the process, accumulating unit tests over time
Achieving a 100% code coverage is unlikely, but the higher this KPI, the greater the amount of code that will run — and the less you'll have to debug.
Cycle Time
Another way to track your team's pace is with cycle time instead of velocity. While velocity evaluates the rate of completion for an entire project, cycle time evaluates the amount of time that's spent on each task. Tracking this KPI can also reveal any inconsistencies in completion rates, and reveal any speed bumps that your team may have crossed.
Knowledge Sharing
For Agile software development to succeed, all parties must be on the same page. Knowledge sharing looks at how clearly each team member is passing on the necessary information to those who might need to know. That way, when other developers handle a portion of code that another developer has written, they'll pick up right where their team member left off.
User Satisfaction
No software development KPI would be complete if teams were left unaware of their users satisfaction with the final product. This feedback is essential for development teams, as it can show them which parts of the project met the users' expectations and which parts have underperformed.
At Revelo, we specialize in connecting development teams with top-tier Latin American developers who have the expertise needed to meet your software development KPIs. Contact us today to see how our talent can help your tech company scale.
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