Software Development Metrics Part 2: KPIs to Measure the Project’s Health

Software project KPIs can tell you how efficient your team’s work is and whether your project management requires improvements. Drawing on ScienceSoft’s experience in outsourced development, we share project metrics that we recommend tracking along with software KPIs. We’ve divided metrics into common ones that fit both in-house and outsourced projects and specific metrics for outsourcing that show how productive the cooperation of a vendor and a customer is.

Common project KPIs

Costs

This group of metrics calculates development cost-effectiveness, so checking them will add to saving your software project from going over budget (at least without a timely notice).

• Actual vs. budget costs

The metric helps regulate spending and signal if any re-estimates are needed.

• Budget needed for completion vs. budget remaining

A project manager can forecast this KPI’s values after each project milestone and bring you up to speed with any deviations in the project’s budget and duration.

Team productivity

This KPI group sets a baseline for a software development team’s performance and helps give a backed-up estimate on how long it will take them to complete work, for example, implement a new feature.

• Lead time and Cycle time

Both Lead time and Cycle time measure how fast a particular kind of a task is completed, but they cover different portions of the process. Cycle time tracks the active process of work on a particular task. And Lead time starts from the moment the work is requested and proceeds with Cycle time, including the processing time and waiting time. For example, the task took 2 hours to complete (Cycle time), but it had Lead time of 4 days because of other tasks in the pipeline.

• Team velocity

Team velocity reveals the average amount of work (in story points or hours) that a team finishes during an iteration. It helps estimate the number of iterations the team needs to finish tasks in the backlog.

• Deployment frequency

Deployment frequency denotes how often new features are added to production. This metric should stay constant or increase slightly over time. Fast growth may be not a good sign as it can lead to an increase in solution downtimes and the number of bugs found in production because of hurried implementation, while a sudden decline will indicate process bottlenecks.

• Time spent vs. time planned (for iterations or implementation of particular features)

This KPI checks whether the software development process follows the project timeline. If the time spent differs from the time planned, a project manager may need to reallocate resources to get the project back on track. For continuous projects, this metric can be changed to features planned vs. features developed.

Specific project KPIs for outsourcing

Customer involvement

This group shows the efficiency of the vendor – customer cooperation:

• Time spent by a customer’s employees fulfilling a vendor’s requests (reveals hidden costs of software development).
• Time of delays with requirements elicitation sessions on the customer’s side (helps explain possible timeline shifts and project holdbacks).

Customer satisfaction

Results of customer satisfaction surveys are the direct indicator of the outsourcing partner’s efficiency, and good scores will be a valuable addition to a project’s portfolio. The following rankings may be included in the survey:

• Overall customer satisfaction score.
• The team’s proactivity (problem-solving skills, ability to give advice).
• The team’s reliability (fulfillment of promises).
• The team’s responsiveness (including availability).

How to approach your KPIs

KPIs bring the most value to project management when they are measured on a regular basis: after some time, they start showing tendencies in the project’s workflow. Still, metric values can’t show the exact reasons behind their trends. To understand the root causes, you will have to analyze working processes of your software development team.

KPI target examples

In the table below, you can find monthly targets for software development project KPIs that proved to be effective in ScienceSoft’s web development projects.

Find new opportunities for performance improvement

As a software development consultancy, ScienceSoft is ready to develop a set of KPIs tailored specifically to your software project.

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