4 Essential KPIs for Software Teams to Track Their Productivity

If you’re project managing a software development team, you’ll know all too well the trials and tribulations that come with the very nature of the job. 

Because software development is all about adapting and developing software to be the very best it can be, there are inevitable highs and lows in the process.

Software engineers are tasked with meeting modern demands surrounding technology. The demands? Fast software that doesn’t crash, which can also report how people are using it.

Competition is fierce in the tech and software industries, whether you’re in SaaS, PaaS or IaaS. Which is why the most efficient, functional software will always reign supreme.

To achieve these high standards, software teams can use KPIs to track their productivity. 

Why KPIs Are Important for Productivity

A KPI (Key Performance Indicator) is a measurable value used to show how well something is performing. This can be used by businesses to track the successes or failures in various stages of a project.

Put simply, KPIs can help you achieve the goals you set at the beginning of any endeavor. 

Goals are vital to workforce optimization and project management across many businesses, including the software industry. They can boost employee wellbeing, thus improving revenue. There is a sense of accomplishment once a KPI is met, contributing to job satisfaction, and happiness within the workplace. And happy teams are productive teams! 

So, what is workforce optimization? Essentially, it’s how you use the skills and abilities of your workforce efficiently. It focuses on balancing customer satisfaction, workforce scheduling, and operational costs. 

For example, a demotivated team who are unhappy with their work processes may become less productive and less invested in the business. This means they’re likely to work slower and inaccurately. This can impact the quality of the work the customer receives, and cost you more in the long run. 

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By introducing KPIs you are setting the standard for the way the business evaluates its performance. This is an achievable goal that software teams can work towards effectively and efficiently. And one which will produce better results in the end.

Here are some of the most essential KPIs for software teams.

4 Essential KPIs for Software Teams to Track Their Productivity

1. Testing Quality

Testing is a routine occurrence in many industries, whether it’s to check if a product is safe for market or if a fixed VoIP system can enter the next stage of development. Indeed, it is crucially important when it comes to software development. Testing quality key performance indicators (KPIs) will help software teams to demonstrate the maturity and readiness of software. 

Routinely testing quality will allow teams to track their productivity as it will flag up bug fixes, and any additional changes they need to make in the development stages. This contributes to high-quality final releases.

Test coverage (also known as code coverage) is an important KPI. It will show the number of branches or lines in the code that are automatically covered by a running test. This improves the effectiveness of the software. 

For example, if you have a remote work technology app that needs updating, you can run a test to see what needs fixing and update the software accordingly. However, bugs that have made their way into production can lead to financial losses, so you should aim to eliminate them before release. 

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In addition, defects and bugs found during the user acceptance testing (UAT) stage will improve the overall quality of the software. For instance, when the team is working on order management software, it can be tested on retailers who will be using it when it’s finally released.

This can maintain the team's productivity as there are likely to be several improvements needed in the software development stages, keeping them engaged and alert.

2. Measure Production With SLI

A service level indicator (SLI) is a numerical measurement to show if the service level objective (SLO) is being met. An SLO is used to help software teams achieve the best possible and most acceptable performance standards. While it’s often used in cloud computing like IaaS, PaaS, SaaS, and others, it can also be useful for others in the software industry. 

This KPI serves as a benchmark for the team, who can measure how well their software is performing based on the SLI. They can monitor the response time, software lagging, errors, and more. 

Project managers can track their software team’s productivity by using this as a KPI. Giving teams a realistic goal to work towards can boost motivation and contribute to higher productivity levels. 

What’s more, a service level indicator can allow the team to identify and detect errors more efficiently. For example, if a software team was working on a progressive dialer system for a client and their SLIs fall below a certain threshold, they can act fast to rectify any mistakes or prevent more serious ones from happening. 

To know that there is always a point of reference to look back on can help to keep the team on track – all while making them even more confident their software will reach production. 

3. Cycle Time

The cycle time is the time it takes to complete a task, from start to finish. 

In business, you often hear of lead time. Cycle time differs from lead time because it refers to the moment when work on the task has begun, as opposed to when the task was created. So, cycle time may be from the moment a bug was spotted to the moment that it’s fixed. 

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Monitoring cycle time is an important KPI, as it gives software engineers the chance to focus on the way they complete a task. It’s an excellent way for the team to learn and embrace techniques that may achieve the goal quicker, like using a file sharing app or team planning software.

By monitoring the cycle time for each process, you can establish how long it takes for the team to do certain tasks. For example, how long it may take them to complete code reviews. 

This key performance indicator should be split into different issue types, such as a debugging cycle or code review cycle. In turn, this will create an even deeper understanding of the speed of cycle times, because it would be unfair to compare a code run on a virtual team building app that may take minutes against a bug fix on a website that may take days. 

Monitoring cycle time can also help to set expectations for those waiting on the software changes, to see exactly how long the team predicts it will take. 

It’s all about the team’s speed and productivity. Eventually, they should reach a stage where it is completed as quickly and effectively as possible. 

4. Velocity

Velocity is one of the most common KPIs that project managers use to track their software team’s productivity. 

This helps with planning and predictability, as well as telling you how much “delivered value” the team accomplished. “Delivered value” means the amount of time it takes to complete features so that the project is ready to test or enter production. The work is usually measured in story points or hours. Large companies and small businesses improve operations with this KPI. The best employee management software out there will allow you to keep track of this particular figure, as well as many others.

This allows you to set delivery expectations with a client. You may also choose to share your processes with them so they gain a better understanding of how long it takes to complete certain tasks. 

Velocity can also help you see whether your process changes are working. For example, if the team believes they’ve found a more efficient way to complete certain tasks, measuring velocity will confirm this. Software teams can also determine whether they gain better results by changing certain processes – referred to as stable or increased velocity. 

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It’s important to note that if your velocity is frequently fluctuating from week to week, then there are issues that need to be addressed. This can be a hindrance to your team’s success. You’ll need to evaluate your workflow and spot anything that could be broken in your process. That’s what KPIs are for. 

Implement and Embrace KPIs

For some, working in a team and setting KPIs may be a completely new way of working. In the software industry, it’s not uncommon for independent software engineers to take on their own solo projects. So, implementing KPIs and overcoming remote workforce challenges may be difficult at first.

However, it will be worth it. Using KPIs to track productivity can be extremely rewarding for software teams. Not only do they highlight where there is room for improvement in your work, but they also set a benchmark standard. Ensuring the final product is the best it can be. 

Implementing the right KPIs for your team is vital, getting it wrong could mean they’re working toward an unattainable goal. So, define the questions that you need answers to, identify your strategy, and ensure the team understands the KPIs you have set. That way, when you have meetings using your VoIP or IP telephony system, expectations are always clear, and goals and action points are always clearly defined. 

Finally, ask each member of the team whether they think the KPIs you want to introduce will make them more efficient. As well as this, you must consistently review them to determine whether they remain effective. 

When used properly, KPIs are a great tool for tracking productivity and boosting team motivation.