Essential KPIs For Software Development Teams

Michael Harvey
August 17, 2022
 Mins Read

Success, in business environments, is measured in terms of meeting corporate objectives. The definition of objectives mean different things to different organizations. Some choose to focus on facts and figures in terms of revenue building and sales targets. Other businesses may focus on maintaining steady innovation or a heavily positive work environment and use these as measures of success.

With varying definitions, the yardsticks for measuring success come in a plethora of shapes and sizes. In order to introduce more standardized methods, KPIs or Key Performance Indicators may be introduced. If an undertaking has limited scope, such as software development, KPIs could prove particularly useful to monitor the project's success.

1. What are KPIs

  • 90% of organizations have trouble executing strategies successfully; this can be helped by introducing better planning mechanisms.
  • KPIs or Key Performance Indicators offer a tangible measuring mechanism to understand how effectively a company is working towards achieving goals and objectives.
  • Businesses are able to incorporate KPIs at varying levels to ensure short term and long term targets can be reached.
  • Higher level key performance indicators monitor meeting overall performance goals while lower level KPIs focus on departmental success.
  • KPIs create value when they are customized to the projects undertaken by a business. Attempting to implement generic industry identifiers may overlook critical factors unique to your business and create undesirable outcomes.
  • Formulating basic KPIs begin with understanding the goals and objectives of your organization and creating blueprints to achieve the same.
  • The objective is not to limit the strategies implemented but to ensure undertakings are only value adding to the organization.
  • KPIs can be modified based on feedback from stakeholders, as a result, structures to understand success are further customized to the business and its activities.
  • To form KPIs an organization can ask itself the following questions.
  • What outcomes are desired?
  • Why does the outcome matter to the business and stakeholders?
  • How is progress to be measured?
  • What influences this outcome?
  • Who is responsible for the success of business activities?
  • What measures can be used to assess outcomes?
  • How often will progress be reviewed till the desired outcome is achieved?
  • KPIs are formulated with clear objectives in mind. Carefully wording KPIs to ensure they are easy to understand allows employees to map trajectories for business activities with similar ease.

2. KPIs for Software Development

Key performance indicators for software development monitor improvement in increments. In this field it is critical to watch production and processes as they occur. While customer satisfaction is not guaranteed with KPIs, ensuring your product is made with care and consciousness will translate into higher quality and in turn result in customer satisfaction. Software Software Development teams could implement the following metrics to monitor progress.

3. Agile Assessment Metrics

To introduce better production methods, agile and lean processes offer key metrics to help planning and informed decisions. This in turn creates improvements in development methods.

  • Lead Time: To offer higher rates of responsiveness to customers, understand the process of development from idea to tangible product. Reducing lead times help simplify decision making and in turn reduce wait time.
  • Cycle Time: Monitor the time it takes for changes to be acknowledged, understood and implemented. If a continuous delivery system is used, cycle times can be measured in smaller time increments like minutes as opposed to months.
  • Velocity: This metric understands how many units can be produced within a given time. This assessment is not to compare departments or teams. Velocity is a mechanism to understand how the team works and must not be used as a success measure. Trying to push your team into producing faster may compromise quality without the right assistance.
  • Opening/Closing Rates: This covers production concerns and understands how quickly these are dealt with within pre-decided time periods.

4. Production Analytics

Three key metrics are used to assess how well the software developed performs. While they don’t offer in depth understandings of feature performance of user satisfaction, they are able to identify overall performance issues. If the software is the sole source of revenue within an organization, more detailed metrics can be added to supplement.

  • MTBF or Mean time between failures: Identifies the average time or frequency of issues within the software.
  • MTTR or Mean time to recover/repair: Identifies the average time or frequency of failures being addressed.
  • Application Crash Rate: This metric measures the frequency of application failure against the number of times it was operational.

5. Security Metrics

While security may be an afterthought for software development, it is a critical component of the building process. These are metrics that contribute to customer satisfaction directly and should be carefully considered by the development team.

  • Endpoint Incidents: Assesses whether infections, viruses or other security breaches affect endpoint devices such as mobile phones and work stations. This is evaluated over a period of time to understand frequency.
  • MTTR or Mean time to repair: In a security context, this metric understands how much time is taken to identify security breaches and remedies are deployed. If the value of the MTTR metric reduces over time then the development team has learnt to tackle security concerns with increased efficiency and effectiveness.

6. Source Code Metrics

While heavily contingent on the project, source code metrics provide ranges and logical theories to assist with monitoring code development. These tools help keep coding styles uniform, offer quick identification of anti-patterns, outliers and trends. Source code metrics primarily offer compliance regulations and ensure the complicated coding procedure is completed without wasting time.


KPIs are important to small scale project success and large scale business prosperity. Within the software industry, understanding the objectives of development helps mold indicators to ensure execution reaps the results needed. Blanket KPIs should act as a foundation for customization. Build the performance indicators your company needs for better performance and outcomes.

Final Thoughts

Essential KPIs for software development teams can be built around four key identifiers; development agility, production success, security assessments and source code monitoring. Depending on the project undertaken these metrics can be dressed up or down. KPIs in this industry focus on comprehensive development rather than customer satisfaction. Though, if software development is executed with consideration and caution to maintain high quality standards, customer satisfaction is by default achieved.

Article by
Michael Harvey

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