Software Development KPIs for Managers, Developers, and Teams

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Rafael Timbó
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Rafael Timbó
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Chief Technology Officer
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Software development KPIs help team members and managers see where they stand regarding progress and where to improve. This article explores top team, manager, and developer KPIs and why they’re critical to track.
Published on
May 23, 2022
Updated on
April 11, 2024

Businesses that fail to set reasonable metrics to assess their status have an unclear picture of where they stand when comparing past performance and competitor output. The same is true for software development teams, which is why they use key performance indicators (KPIs) to continuously improve. KPIs are measurable and quantifiable statistics that track progress towards a strategic objective or goal.

But which KPIs should companies choose to track? From code churn to burndown charts, there's no shortage of KPIs executives may use to see how their project is progressing. Some KPIs measure efficiency, while others break down project milestones into smaller, more accessible goals. To get an accurate picture of their status, it's crucial to use the right metric.

What Are Software Development KPIs?

While traditional software development KPIs consist of the lines of code written or the number of bugs resolved, these alone fail to give adequate insight into the actual business value that your development team is adding to the project. Ideally, software development KPIs should match the context of a team’s work and be specific enough to fully capture the scope of the tasks being performed. 

This is especially true for teams that practice Agile software development, which takes a more collaborative design approach and may be more challenging to assess. Effective use of the right KPIs involves consistent monitoring, clear communication, and data-driven decisions based on tracked metrics.

Importance of KPIs for Software Development

From personal endeavors to corporate vision statements, the presence of objective, measurable goals helps keep a business on track. Metrics like KPIs serve a similar purpose, offering data-grounded evidence that a software development team is achieving its business objectives.

But milestone marks aren't the only way to practically use KPIs. Some other benefits of KPI usage include the following:

  • Improved organization: Characterizes the processes involved in moving a project forward
  • Clearer evaluation: Helps team members discern where their project stands
  • Resource allocation: Reveals which stages of the project will be the most difficult to complete and which resources must be prioritized
  • Process iteration: Shows teams how they improve their methods for the subsequent development stage

These benefits are valuable enough, but further downstream, businesses using KPIs often anticipate a shorter project design journey, greater productivity as efficiency improves, and more savings as projects eventually require fewer resources to complete.

KPIs for Software Development Managers

In industries ranging from construction and tech to healthcare and finance, software development managers oversee their teams to ensure functionality and business goals are met. Their job is to analyze, monitor, and evaluate the project's trajectory and use judicious decision-making to develop scalable solutions.

As any endeavor needs observable metrics to assess its progress, key performance indicators help keep businesses on track in several areas. As the leaders of their teams, software development managers should look at KPIs that reveal their project's overall health. Software development manager KPIs such as velocity, burndown, and flow should give insight into which hurdles must be addressed, where the team is thriving, and opportunities for future growth.

Velocity

To comprehensively assess a team's productivity, a baseline must be set. Determined by the amount of work a team can complete in a single set period (often known as a sprint), velocity estimates how quickly development teams can move.

Velocity is one of the most important Agile software development KPIs and is measured in several ways. The most common method is to use story points that show how much work goes into completing each stage of a product — though these must be approximated first. Whichever measurement method is employed, be sure to check a team's velocity several times so that an average value is established for more accurate historical estimations. Implement methodologies such as timeboxing to provide a stronger framework for velocity if needed.

Sprint Burndown

While velocity shows the average completion rate for a 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 helpful not only because they reveal how much work is completed per sprint, but they also 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, teams may find additional layers of work to complete that were not accounted for in the original chart. Team leaders can't extrapolate how much longer the extra tasks will take, so sprint burndown may need to be adjusted — especially if initial estimations were off.

Release Burndown

One of the many benefits of software development manager KPIs is that they give leaders something to offer stakeholders 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, showing if the project is progressing as scheduled.

Release burndown charts are a helpful deliverable for demonstrating progress to investors, customers, or executives, but they also illustrate any hurdles the project has encountered. Such delays are often frustrating to stakeholders. Release burndown charts help 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

Cumulative flow measures how many tasks enter and exit a development team's workflow in a given timeframe and how long it takes to complete them. This metric is part of Kanban and was first created for lean manufacturing in the automotive world; later, it was adapted for development purposes to help managers balance their software logistics.

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 creates project bottlenecks and backlogs as incoming tasks pile up, easily grinding development to a halt.

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, so CFDs should remain horizontal if stagnant or trend upward with increased flow — they should never slope downward.

Flow Efficiency

Flow efficiency expresses the total number of hours of work completed as a percentage of the project's lead time, and it's an essential software development KPI. The following simple equation expresses it:

Flow efficiency = [(total work)/(lead time)] × 100 

or

Flow efficiency = [(total work)/(total work + wait time)] × 100

Delays are inevitable in the software development industry. The beginning of one task must sometimes be put off until another is complete, and due to the time added in meetings, iterations, and breaks, the amount of time spent working on the project may be lower than most managers think.

While they may overlook 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 a project may encounter.

KPIs for Software Engineers

While software development managers coordinate the efforts of each member, software engineers write the code that creates the final product. This means engineers shouldn't 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. Here are several important engineering KPIs.

Availability and Reliability

Availability and reliability both seek to measure how dependable software is, and 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

Developers must know if their products are operational upon request so that they’re able to quickly debug them when they crash and ensure the quality that the customer deserves.

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, translating into an average system downtime of just over 5 minutes per year.

Clarity

Clarity is an engineering KPI that measures how well the programmer grasps the objectives their system is designed to fulfill. For a developer to write code that performs the software's required tasks, they must first understand key objectives. The higher this KPI, the better a developer understands project requirements. If this KPI is low, it may be helpful to revisit the productivity tools and resources they use to ensure adequate information is provided to a team.

Code Churn

Code churn is the amount of code rewritten throughout a project life cycle and another method to assess how efficiently code progresses. The more code a team has to write, the longer it takes to complete a project — that's why code churn matters. In the software development process, a product must be repeatedly tested and debugged before it runs correctly. Every time an error is detected, the code must be amended, costing valuable time and resources. 

Adding new features along the way means additional code changes, and every time this occurs, the potential for error increases — along with the project completion time.

To minimize code churn, test code early and often and scale back the number of changes when possible.

Code Quality

The higher the quality of a developer’s code, the more likely that software optimally performs — but establishing a quantifiable metric can be difficult.

Determining how well code is written isn't measured simply by a number but rather by a series of objectives that code should meet. Most importantly, code should cause the software to function as intended. In general, though, quality code should also meet the following standards:

  • Clear: Code should be able to be read by team members and managers during later development stages.
  • Reliable: Code should successfully operate over a given time period.
  • Maintainable: Previously written code must be revisited and supported for quality and scaling purposes.
  • Testable: Both manual and automatic testing should be performed once the code is written.
  • Portable: Based on project requirements, code may be applied across multiple platforms.
  • Reusable: Clean code, when applicable, may be repurposed for future projects.

There are different ways to achieve these metrics, and while no set definition exists for some, using static analyzers for testing, regular code reviews, and multiple compilers for maximum portability helps 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 to achieve project success.

Code Stability

Whether measured in alteration frequency, resulting downtime, or the risk associated with changes, code stability refers to the potential impact of code changes. Like code quality, code stability can be challenging to measure. Code stability results in the healthy operation of a product and, with maintenance, the prevention of software entropy. The more stable a code is, the lower the risk each change has posed to the system, creating secure development for users and developers alike.

Code Simplicity

Complex code is high-risk, sometimes creating software flaws downstream. Code simplicity ensures programmers take the shortest path between two points with as few detours as possible.

While there are several ways to measure code simplicity, McCabe Cyclomatic Complexity is one of the most common software development KPIs for doing it. This metric tracks and measures the number of linearly independent paths present within an application's source code, and the higher the number, the greater the code complexity and risk.

Code simplicity is a more general software engineering KPI, and there are multiple metrics teams often use to measure it depending on project scope and requirements.

Testing Quality

Errors are inevitable in the software development journey, so code must be tested thoroughly and often. The testing quality KPI measures how well a developer tests the written code, whether manually or with tools.

The Forbes Technology Council released a set of 13 recommendations for creating a best-practice QA environment; while these may be applied elsewhere, teams can improve their quality testing by implementing them across the board. These recommendations include the following:

  • 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’

Regardless of the chosen metric, make sure that any QA 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 stay on the same page and maintain continuous delivery. As the development cycle progresses, separate components are combined and integrated to create the final product. Every team needs a way to monitor their overall tech team health, and these team KPIs assist in illustrating story points for both stakeholders and collaborators to assess a team’s performance.

Code Coverage

Similar to testing quality, another way to ensure high code quality is to evaluate code coverage. Defined as the percentage of a team's code that executes successfully, code coverage is often used in test-driven development, consisting 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 a team has to debug.

Cycle Time

Another way to track a team's pace is with cycle time instead of velocity. While velocity evaluates the completion rate for an entire project, cycle time evaluates the amount of time spent on each task. Tracking this KPI may also reveal any inconsistencies in completion rates, speed bumps, or unseen technical debt that the team may have encountered.

Knowledge Sharing

To see the benefits of Agile software development, all parties must be on the same page. Knowledge sharing observes how each team member passes on the necessary information to those needing to know. Ideally, when other developers handle a portion of code another developer has written, they'll pick up where their team members left off.

User Satisfaction

No software development KPI would be complete if teams were unaware of their users' satisfaction with the final product. This feedback is essential for development teams, showing which parts of the project met the end-user's expectations and which parts have underperformed. Customer satisfaction informs future ideation and allows teams to improve and optimize specific product components.

Increase Development Performance with Revelo

Once KPIs are determined, finding the right developer talent to maintain and increase these metrics can be difficult. Factors such as industry competition, employee skill gaps, and high company turnover may lead to issues with talent acquisition, making it even more challenging to increase KPIs and deploy cutting-edge software products.

At Revelo, we specialize in connecting development teams with top-tier Latin American developers with the expertise needed to meet your software development KPIs. Once matched with talent from our global pool of candidates, we’ll assist in ongoing administrative tasks such as payroll, benefits administration, taxes, and local compliance — allowing you to focus on performance and core business needs.

Contact Revelo to hire developers and build a talented and cost-effective team for your organization.

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