Top 10 Software Development Metrics and KPIs

Today’s software development management is highly targeted at compromising customer expectations and the team’s performance, motivation, and progress. Designing a high-quality software product greatly depends on the correct set of software development KPIs with accurate analytics at every stage.

The traditional approaches mainly rely on quantitative metrics like the number of code lines, bugs, and meeting deadlines. Modern agile methodology implies analyzing processes and operational metrics to optimize the qualitative parameters.

Why Do KPI Metrics Matter?

Some teams still rely on their instincts to define a workflow and manage processes as part of project development. Lack of a systematic approach to planning and measuring success often leads to sudden failures such as the inability to close a specific issue or complete a particular development task on time. Why is this happening? What factors cause losses? How can you help your team be successful? If you don’t know the answers to these questions, it will be difficult to explain them to a customer and keep your team moving forward.

To rule out the possibility of unexpected failures, the team needs clear metrics to achieve the customer’s business goals and control their internal processes during development. Each key performance indicator (KPI) helps assess the productivity of the software team, understand whether they are doing their best, and plan resources to increase efficiency.

Types of Software Metrics

The full diversity of existing KPI engineering metrics is divided into five groups:

Formal code metrics

These are code quality assessment metrics, primarily used to ensure consistency between different developers on the team. This group includes lines of code (LOC), instruction path length (IPL), code complexity, and so on. In modern development, formal code metrics seem less valuable. Writing a lot of code does not always mean a better quality of the final product or better performance of the team.

Software Developer Productivity Measures

Help analyze the contributions of each developer by evaluating the time and effort that people invest in developing the project. The most popular metrics include speed, cycle, and response time.

Test metrics

The quality and integrity of the tests affect the quality of the product. Test metrics, such as code coverage, percentage of automated tests, and manufacturing defects, measure how well the product is tested.

Operational metrics

They allow to analyze the stability of the software in terms of production and maintenance efficiency. The main metrics in this class are mean time between failures (MTBF) and mean time to recovery (MTTR).

Customer satisfaction

They demonstrate how customers successfully interact with the software once they are satisfied with the product. Critical measures of customer satisfaction are the Net Promoter Score (NPS), the Customer Satisfaction Score (CSAT), and the Customer Effort Score (CES).

Therefore, you need to understand the core concept: metrics are functions, not measures. By setting a specific metric, you can predict future performance.

Benefits of Software Development Metrics

As part of project management, defining software metrics allows:

• Characterize to understand all the processes, resources, and environments for the development of software products.
• Evaluate to determine the current status of the project in terms of plans and goals.
• Predict by understanding the multiple relationships between processes and products and model these relationships for future phases.
• Improve yourself by spotting inefficiencies, roadblocks, and other failure triggers and finding ways to eliminate them.

By translating all of these project management capabilities into the language of business, you, as a customer, can greatly benefit from setting reasonable KPIs for developers, as it translates into:

• Reduce expenses;
• Reduce overtime;
• Increase return on investment (ROI);
• Optimize workload management;
• Identification of areas for improvement.

KPIs for Software Development Companies

There is no standard set of metrics that all development teams can effectively use. Depending on each development project’s individual goals and specificity, management sets specific KPIs for proper progress control. As a start, here are the most popular metrics in today’s environment.

1. Lead time

Lead time is one of the traditional agile KPIs as it measures the time it takes for a team to turn an idea into a real product. In other words, it measures the time required to process the task from when it occurs until the final result is delivered. Assuming a team is listening to the customer, struggling to get the code into production as soon as possible, it makes sense to continually reduce delivery time. Usually, this is done by reducing the chain of decision-making.

The Lead Time metric visualizes trends and predicts how long the next story is likely to take. To calculate the probability, you can generate a delay distribution plot.

2. Cycle time

Cycle time is part of the wait time and shows how long a developer has actually worked to run it.

Suppose your team uses the Kanban methodology for task management. When a new assignment appears on the Kanban board, the team reviews and discusses it before execution begins. Also, a task spends some time in the queue before a developer picks it up and starts working on it.

The cycle time covers when the new task appears in the “In Progress” step and reaches the “Completed” column.

3. Team Velocity

Team Velocity shows how many software units (tasks, roles, story points, etc.) there are to complete in a sprint or iteration. The use of this KPI development metric is controversial. It should not be used to compare different computers, as the performance and speed of development requirements are individual for each. However, if used internally, it helps to schedule sprints and analyze team results to make projections on what a team is capable of achieving in the next sprints.

4. Active days

The Active Days metric measures the time it takes for a developer to create a product. It does not include time for preparation, homework discussion, and other things. This is just the time for actual code development. This metric is not used for administrative or planning purposes. However, it looks at the hidden costs of outages. For example, it shows how meeting in the middle of the workweek can affect overall developer productivity.

5. Release Burndown

Build evolution helps to understand how much of the scope of work there is to complete in the next sprints and how much time it will take.

6. Code Churn

The Code Churn metric reflects the number of lines of code added, modified, or removed over a certain period of time. We usually measure it in lines of code (LOC). It allows software administrators to monitor the development process and the quality of developers’ work. Once the churn rate starts to rise, it could be a sign of a problem that needs special attention.

The abandonment rate of the code does not remain stable during the life of a project. It is normal to have a high churn rate when the project starts, which is commonly referred to as an “exploratory” churn rate. It characterizes the period in which software engineers explore various potential solutions to a problem. Then the churn rate decreases once we choose and refine the solution.

7. MTBF and MTTR

Mean Time Between Failures (MTBF) and Mean Time to Recovery / Repair (MTTR) measure the performance of the software in the production environment. Software failures are almost inevitable but these metrics help control how the software recovers from them. These are the key parameters for evaluating the effectiveness of maintenance personnel.

8. Escaped faults

This software development KPI measures the quality of the delivered code. It shows how many flaws (errors) were found after the code was published. You can capture it by version, sprint, month, week, or another period, depending on the needs of the project.

An increasing number of defects indicates a faulty quality process and may indicate reconsidering code requirements prior to publication.

These KPIs for software development companies assess different aspects of the quality of development products and processes, including reliability, performance, security, code quality, and programmer efficiency. However, depending on the type of project and your needs, you may not need to track all of them, or you may need other metrics for more accurate analysis. The main goal here is to select KPIs to help you tailor the development process to your business goals and achieve the required quality of the final product.

Final Words

Any control in itself is useless if it does not lead to improvements and does not allow the achievement of specific objectives. There are several key performance indicators for software development that help optimize all processes for product success. The knowledge they provide is an excellent foundation. Therefore, it provides proper planning and strategic problem-solving at each stage of development.

With the support of Novateus’s software engineers, you can achieve the best possible results by balancing development cost and quality, maximizing team performance on time. Properly defined KPIs also help ensure end-product quality and customer satisfaction, thereby strengthening our customers’ reputation in the software market. If you want a high-quality software product but with all potential risks under control, Novateus will be a great outsourcing partner to meet your development needs.