3 KPIs Used to Measure the True ROI of Agile Testing

Waterfall methods are going out the door as many development teams strive to keep up with user demands, business requirements, and software evolution. Under agile operations, QA management has become more capable and hardwired into how teams are performing. The question, however, is how much of an effect has agile had on the organization's return on investment? It's obvious that waterfall was a large expense that grew with scheduling conflicts and defects, but agile's effect is still unfolding. There are three key performance indicators (KPIs) that can be used to find the true return on investment (ROI) of agile:

1. Cycle Time

Whether sprinting in development or on a track, organizations need to do as much as they can in the time that they have. This doesn't mean taking off at a full-out run; rather, it's important to set tasks for each sprint and complete them as thoroughly as possible. Measuring the time it takes to go from brainstorming to release is a critical metric to keep an eye on for any project. CoMakeIT noted that teams should pay special attention to how the "concept-to-cash" timeline fluctuates after transitioning to agile. In most cases, the schedule will decrease drastically compared to waterfall plans. If the timeline goes up, this could simply mean that teams aren't utilizing agile resources as effectively as they need to. By inundating teams in the sprint mindset, stakeholders should begin to see rapid reductions in production time.

2. Defect Trends

In addition to cycle time, defect trends over time is an essential KPI for businesses to monitor. This doesn't just mean how many issues are found on the first pass of testing; it relates to the overall health of the application as more features are added and changes are made. After all, it's very possible that a developer may introduce a critical error that affects the rest of the application, even if it makes it through the testing process. TechTarget contributor Johanna Rothman noted that charting newly found defects, closed defects, and open defects could provide integral insight for how effective QA teams and agile processes have been over time. During times when the number of issues escalates, it will be important to go back and determine what caused the problem and generate responses to resolve it.

"Again, we want to track defects as trends over the life of the project," Rothman wrote. "What happens in an iteration is interesting, but not as interesting as what occurs over the entire project. I use two different charts to track defects ... The trend that's particularly interesting here is the number of remaining open defects."

3. Cost Avoidance

It's no question that testing metrics relating to defects are a significant part of agile ROI, but cost avoidance shows the real numbers of how much businesses are saving by finding and fixing issues earlier. TechBeacon contributor Christopher Null suggested that with a solid formula, organizations can calculate how an agile framework helps build in quality and save money. Teams must first look at the pass/fail rates and how long it takes to fix these problems. A developer makes a certain amount per hour, and if he or she spends three hours to deal with defects, this can add up to a lot in lost time and added expenses for a business. However, by finding defects earlier on and using test management tools to help mitigate the problem, organizations can avoid spending more than they need to and boost their overall ROI.

Agile has been widely touted as a beneficial asset, but many teams are still unsure of how to measure their success in this practice. By using these three metrics, organizations can better gauge their ROI in agile and create strategies to improve their effectiveness.