Top KPIs for Software Development Companies

A successful and high-yield generating software is one that provides potential customers with what they are looking for. It helps them to solve their challenges and fulfill some of their requirements. In a software product development process, the entire team puts their energy into ensuring that the developed product delivers what they want to achieve.

During the software development process, you may need help finding a set of standard metrics to use in the process. However, you can choose from several effective KPIs and metrics according to your goals and long-term objectives. You can use the following metrics for your project:

1. Lead Time

It helps determine how long it will take for a team to convert an extraordinary idea into a successful product. It measures and helps to calculate the definite period in which the product is expected to be released in the markets. You can easily measure the timeline to finish the product and bring it to market.

2. Cycle Time

This is considered a sub-domain of the above KPI, indicating how much time your project crew has spent on the project from inception to execution. It will also help you determine how much time your members took when reviewing the project at an early stage and implementing processes.

3. Team Velocity

The number of software units, such as features, specifications, narrative, and tasks completed during the sprint, are indicated by these feasible metrics. Nevertheless, these metrics are sometimes considered controversial because each employee has a different performance level and expertise, which one metric may not describe well.

4. Active Days

Active days statistics calculate how long it takes a developer to build a product. It does not include time spent on planning, decision making, strategy making, deliberating on tasks and other activities. This allows us to see the unintended costs of disruptions while working on a project. For example, it shows how one meeting during the work week can reduce a developer’s overall productivity, etc.

5. Release Burndown

Understanding release burndown helps determine the amount of work that has to be finished and how much time is needed in the upcoming sprint. The amount of work that has been finished, added, and is still needed is displayed in the burndown chart. It helps teams to strategize and set project completion deadlines.

6. Code Brainstorming

It helps to show the number of code lines created, added or deleted overtime during the project development process. It allows product managers and developers to keep track of all progress, performance and development of the product.

7. MTBF and MTTR

Mean Time Between Failure (MTBF) and Mean Time to Recover/Repair (MTTR) help measure software performance and development potential in a production setting. These standard KPIs help control and manage the process, while also enabling you to determine how quickly a software product will bounce back. This will ultimately allow you to efficiently accomplish your end results.

Total unplanned maintenance time / total number of repairs = MTTR.

MTBF = Total uptime / # of breakdowns.

Uptime = MTBF / (MTBF + MTTR)

8. Escaped Defects

These impressive metrics enable you to see the bugs and defects found during the process. It is useful in evaluating the quality of the software product development process on a weekly or monthly basis.

9. Defect Removal Ability (DRE)

If you want to analyze the number of defects before and during the product development process then this metric has you covered. This is useful in comparing and analyzing the number of errors discovered before delivery to the number of errors discovered by the end user after delivery.

DRE = (number of defects detected internally / number of defects detected internally + number of defects detected externally) × 100.

10. Net Promoter Score (NPS)

This enables you to determine customer satisfaction in more detail and in relation to the product after it has been delivered to the customers. It helps to review if customers are really happy with the product or if they have some concerns. Using such information, you can further improve the features of your product.

NPS = % Promoter – % Inhibitor.

Net Promoter Score (NPS) can also be attributed to metrics for product management.

KPIs and Metrics for Product Management

Metrics to predict the commercial success of a product

From primary metrics to understanding user engagement to high-level metrics that indicate the health of the business, these metrics help predict the business success of a product. Some of these top metrics include:

  • total profit
  • Sales revenue
  • net Promoter Score
  • net profit margin
  • MRR (Monthly Recurring Revenue)

Metrics to analyze and drive user engagement

User engagement cannot be recorded without tracking other engagement metrics used to measure user engagement. You’ll need to pay attention to those two signs because engagement is calculated as active users divided by all users for a certain group in a given period of time. However, some additional metrics also need to be tracked. Here are a few of them:

  • churn rate
  • Retention rate
  • total active users
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Metrics to measure product/feature popularity

The most specific and relevant metrics to measure the popularity of a product are listed below:

  • Net Promoter Score (NPS)
  • Customer Retention Rate (CRR)
  • Active Users Percentage (DAU, WAU, MAU)
  • Monthly Recurring Revenue (MRR)
  • Customer Lifetime Value (CLTV)
  • Customer Acquisition Cost (CAC)

Remember, metrics and KPIs are essential to software product development because they help you increase team productivity and efficiency, ultimately producing the best product.

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