Main Software Development Metrics and KPIs

KPI for Software Development.

Today the management of software development is highly focused on achieving the right set of KPIs that can help the team reach its goals and improve its performance. Key performance indicators are often used in technical work settings to stay accountable to the goals you have set. They can be complex and exhaustive, so they are very useful for software development teams.

The traditional approach to software development is mainly focused on quantitative metrics such as number of lines, bugs, and meeting deadlines. But modern agile methodology aims to analyze and optimize the qualitative factors through a combination of qualitative and operational metrics. 

In this article, you will find out about the main types of key performance for software developers and how to measure them. 

Key performance indicator.

What is KPI for software development

Some teams still rely on their gut instinct to set a productive and efficient workflow. Unfortunately, this mentality can lead to many unexpected failures, especially when it comes to measuring and planning for success.

To prevent this mistake, the team should have clear-cut goals and a strategy to achieve them. The key performance indicators help the team measure its productivity and plan for its efficiency.

Key performance indicators (KPI) are values that measure the overall performance of a company. They are also used in software development to align with business objectives.

Most of the time, key performance indicators are used to measure the number of lines of code, commits, and deployments. But, these are not very accurate and do not provide real objectives. One of the most influential factors in setting software development KPIs is the quality of their targets.

Why metrics are important

Creating software development KPIs that are aligned with the goals and the commitment of the team members to reach them will help ensure high-quality software.

When a problem occurs, having a set of metrics helps identify the issue and highlight the most important ones.

Having a set of metrics also encourages team productivity. By recognizing the collective efforts of the team, it helps the developers identify areas of concern and fix them. Having a set of software development KPIs can help you measure the progress of your team and improve your ROI.

To determine if KPIs are correct, you need to take into account some nuances. Each of the key indicators should be SMART. It means that they should:

  • be calculated for a Specific purpose
  • have a Measurable entity - evaluate the actual activities of the company
  • be Achievable 
  • be Relevant to the performance - reflect efficiency
  • be Time constraint -  describe a specific time period.


Types of key performance indicators?

Overall we can divide software metrics into 5 categories:

The formal code metrics are used to evaluate the quality of the code. They include lines of code, instruction path length, complexity, and overall development process.

The productivity metrics of software developers help analyze the time and effort that goes into developing a project.

The test metrics that are conducted on a product affect its overall quality. A comprehensiveness of testing helps determine how effective the tests are. What information can be checked there: 

  • Whether all tests have passed or not;
  • The total coverage of tests in percentage;
  • How many statements in the program have been executed;
  • How many branches of the control structures have been executed;
  • How many branches in the control structure have been executed;
  • How many lines of source code have been tested;
  • How many functions defined have been called.

The operational metrics of software are used to analyze the stability and maintenance efficacy of their systems.

The customer satisfaction metrics help companies measure how satisfied their customers are with the software. These include the Net Promoter Score, the Customer Satisfaction Score, and the Customer Effort Score.

With the rise of automated data collection, it's possible to collect vast amounts of information. However, this method can lead to over-reliance on the data and result in a poor report. In order to minimize this issue, team members should use the metrics in their chosen manner. 

Modern software development teams prefer to use agile methods as well as Mad Devs. With agile, the workflow can be easily adjusted to deliver a product that fits schedule. So there are specific KPIs to regularly monitor and analyze the performance of the various stages of the development process.

Let’s discuss them.

Top KPIs for software development

KPI for software development.

Measuring work in progress

Team velocity

Projects are typically divided into sprints, which are usually focused on specific tasks. Each sprint has a number of these that must be completed by the end of the working day. During a sprint, you can use velocity metrics.

There are many ways to measure velocity, such as story points. One of these is to measure the amount of work that goes into a software product.

Knowing the story points of a project helps you estimate the time it will take to build and deliver it. Doing so allows you to get a good idea of the team’s goals.

Important tips to measure velocity

If velocity stays consistent after multiple sprints, consider incorporating other factors into the calculation.

When multiple tasks are added or removed from the calculation, the velocity can be calculated differently.

If you want forecasting based on velocity - the average of three sprints is enough for predicting future performance.

Velocity Chart.

Sprint Burndown

Most software companies use Scrum as the method of organizing product development that divides it into fixed time intervals, called Sprints. We at Mad Devs as well use this method. Here is the article to know more about it.

So, sprint burndown chart is a visual representation of the team's workflow. It shows the total amount of work that has been completed, as well as how much more is still left to be done. Ideally, it should be averaged so that it shows the lowest possible number of tasks or work hours.

Using sprint burndown as a metrics helps teams keep track of their performance when it doesn't match their expectations.

Project XYZ iteration 1 Burn Down.

Release Burndown

A release burndown chart is similar to a sprint burndown chart in that it shows the status of the project as it relates to its release date. It can be used to inform customers and employees about the delays or early versions of the project. In other words, it can help users determine if the project can meet the deadline or if it should move further beyond that.

A good release burndown chart also helps users determine the number of sprints that are required to complete the work.

Release Burndown Chart.

Example of release burndown chart.


Process health and bottlenecks

Cycle Time

A cycle time chart is typically the time when a task is most likely to be completed. It shows the time when that task is most likely to be finished.

Knowing how fast your team is working can help you improve your team's performance. It can also help you determine the right amount of work to do next time.

You can also stack all the cycles for a specific period and compare them to other data to get a better understanding of the quality of the work.

Cycle Time by Month.

Example of cycle time chart.

Cumulative Flow

Cumulative flow (CF) is a visual diagram that shows the status of all the tasks that are in progress. It uses a color scheme that shows the various stages of the project. The goal of this chart is to provide a visual representation of how tasks are distributed across the various stages.

The diagram shows the relationship between the time and the number of tasks on the project. It highlights the various stages of the work process and shows the percentage of tasks that have been completed and in review.

A cumulative flow chart can help you keep track of the team's work output and keep them accountable for consistent performance.

The CF is a great tool for teams that are focused on keeping track of all of the tasks that are in progress, in-do, and finished.

The chart can also identify when the work-in-progress limits are exceeded. This feature helps develop a culture of finishing work and minimizes multitasking.

Cumulative Flow Diagram.

Example of CF diagram.

Flow Efficiency

Flow efficiency is a metric that shows how much time is left to be done. It shows the difference between the time that's left and the amount of work that's in progress.

Divide the time you spend working by the total cycle time to get the flow efficiency. It can be used to identify areas of weakness or make changes to how the project is managed.

It can also give insight into the distribution of work between the various waiting periods.

Sometimes, the code has many dependencies and you can't start working on something until another one is finished. This can be useful to keep track of how much time you're waiting for work to get done.

Flow Efficiency Diagram

Code quality

Code Coverage

A good code coverage metric measures how many lines of code are executed while a test is running. It's typically used to evaluate the continuous delivery process and test-driven development practices.

Don't over-estimate the number of lines that have been covered. Also, calling a line of code multiple times isn't always enough to close a test. Instead, it should be used to highlight the code that has been covered and may be of interest to testers.

Although achieving 100% code coverage doesn't mean that the code has been thoroughly tested, it does suggest that you have prioritized the codebase and the features that are most important to the development of the project.

Example of code coverage with specific tool.

Example of code coverage with specific tool.

Code Stability

Code stability is difficult to measure. Stable code means that there are little changes to the software product that could potentially harm the business or software.

Some developers decide to chart the frequency of code changes. Others think of stability in terms of what percentage of deployed code results in downtime.

Code Simplicity

Code complexity is a more general KPI that can be measured through various metrics. One of these is the number of paths that your code must take to get done. Code complexity is also a useful metric to measure the risks posed by various issues during development and testing. It can also help determine which parts of the code have the most bugs.

Code simplicity is a balance between the machine and human perception of complexity. The problem with it is that If you force developers to refactor their code into many sub-methods, they may end up making it harder for humans to understand. Having code that is easy to read will reduce the risks of long-term onboarding for new developers.

Code Churn

Code churn is a metric that measures the amount of code that changes over time. If the code has to be rewritten to accommodate a new feature, it could cause high maintenance.

Although it's primitive, code churn can be used to evaluate the stability of your code. It can also tell you which development stages are the most unstable and which ones are the most stable.

Look for regularities in code changes to identify issues that could be caused by the task-generation approach. If the code has spikes in code changes, it's important to investigate which tasks caused the spikes. Doing so can help avoid generating unstable code.

The stability of your product is very important before a release. A growing trend can indicate that the code will most likely get rewritten before the release date, which could cause instability.

Example of code churn chart.

Example of code churn chart.


How do software engineers measure KPIs?

The specific tools you will use to measure KPIs will depend on the systems your teams and employees use to do their job. Marketing teams can use Google Analytics to measure their KPIs, sales teams can use CRM, and support teams can use help desk reports.

We at Mad Devs use an information radiator. A radiator is commonly used as a tool to visualize the various parts of the workflow. Even though it's a tool, it can also be customized to display different data types. When the team is discussing the details of a project, a radiator can be presented in various messages sent to the team.

The other way is to use KPI dashboards. Using a KPI dashboard, companies can monitor and make informed decisions about how they should approach the goals of their projects. For example, here is a dashboard for Jira. There are many types of KPI dashboards on the market. From simple to advanced, all you need to choose is the right functionality set and a suitable budget.

Best practice KPI setting for software development

  • Each metric should be focused on a specific goal or objective. For example, the development team may want to improve the number of bugs reported or accelerate the completion of a task.
  • A metric can be created in various ways. It can be easily set by default as the target metric, or it can be used to measure the progress of the entire process. Having a metric that tells the story of the development process is very useful for analyzing the overall trend.
  • Use metrics to analyze the dynamics of the workflow, such as how it changes weekly or monthly.
  • Instead of constantly interrupting the work, having multiple measurement periods can help determine the exact progress of the project. Doing so can give teams a better understanding of the problem that's causing the development team to waste time.
  • If the project metrics do not provide valuable insights for reaching the team goals, stop using them. It suggests that you have chosen metrics that are not aligned with the goals or have no value to your project.
  • The various metrics should be the subject of regular meetings and discussions among the team members. These sessions can help the team identify ways to improve the efficiency of the work processes.
  • Do not try to use too many metrics as they will just bury you in numbers. Instead, select a few carefully selected metrics that will provide more detailed insights.

To wrap up

Key Performance indicators (KPIs) are used in the programming process to help managers prioritize and develop goals for the team. The goal is to achieve specific objectives, so implementing key performance indicators helps in developing processes that are optimized for success.

A good performance indicator can help develop processes that are optimized for product success. It provides the necessary knowledge to properly plan and implement strategies.

Mad Devs’ experienced software engineers can help you achieve the best possible results. We can also help you manage the development cost and provide the highest quality software that will meet or exceed the expectations of KPIs. Contact us now. 

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