Top KPIs for Software Development Companies

A successful and high-yield generating software is one that offers potential customers what they are looking for. It helps solve their challenges and meet their certain requirements. In a software product development process, the whole team puts their energy into ensuring that the developed product offers what they want to achieve.

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

1. Lead Time

This helps determine how long it would take for a crew to turn an exceptional idea into a successful product. It measures and helps calculate the certain period in which the product is expected to be released onto the markets. You may easily measure the timeline to finish the product and get it into the market.

2. Cycle Time

It is considered the sub-domain of the above KPI, portraying how much time your project crew has consumed when working on the project from beginning to execution. It will also help you determine how much time your members took when reviewing the project in the initial phase and during the implementation of the processes.

3. Team Velocity

The number of software units, such as features, specifications, narrative, and tasks completed during a sprint, is indicated by these viable metrics. Nevertheless, these metrics are sometimes considered controversial as every employee has different performance levels and expertise, which a metric might not describe well.

4. Active Days

The Active Days statistic calculates how long a developer takes to create a product. It excludes the time spent on planning, decision-making, building strategies, deliberating over tasks, and other activities. It allows us to see the unintended costs of disruptions when working on a project. For instance, it demonstrates how a meeting during the workweek might reduce a developer's overall productivity and so on.

5. Release Burndown

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

6. Code Churn

It helps shows the number of code lines composed, added, or eradicated overtime during the project development process. It allows product managers and developers to keep a check on all the progress, performance, and development of the product.

 7. MTBF and MTTR

Mean Time Between Failures (MTBF) and mean time to recover/repair (MTTR) help measure the performance and development capacity of the software in the production setting. These standard KPIs help control and manage the process while also enabling you determines how promptly the software product will bounce back. It would ultimately allow you to accomplish your end results efficiently.

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

MTBF = Total uptime / # of Breakdowns.

Uptime = MTBF / (MTBF + MTTR)

8. Escaped Defects

These influential metrics enable you to see bugs and faults 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 Efficiency (DRE)

This metric got you covered if you are looking to analyze the number of faults before and during the product development process. This is useful in comparing and analyzing the number of errors discovered before delivery to the number of errors discovered by the end user once the delivery has been made.

DRE= (Number of defects found internally/ Number of defects found internally + Number of defects found externally) × 100.

10.  Net Promoter Score (NPS)

This enables you to determine customer satisfaction in greater detail and with respect to the product once it is delivered to the customers. This helps review if the customers are really happy with the product or if they have some concerns. Utilizing such information, you can further improve your product’s features. 

NPS = % promoters - % detractors. 

Net Promoter Score (NPS) can also be attributed to metrics for Product Management.

KPIs and Metrics for Product Management

Metrics to Forecast the Business Success of a Product

From rudimentary metrics to understand user engagement to high-level metrics that indicate the business's health, these metrics help forecast the business success of a product. Some of these top metrics include:

• Gross Margin
• Sales Revenue
• Net Promoter Score
• Net Profit Margin
• MRR (Monthly Recurring Revenue)

Metrics to Analyze and Grow User Engagement

User engagement cannot be recorded without also tracking other engagement metrics that are used to measure user engagement. You'll need to pay attention to those two indications because engagement is calculated as active users divided by all users for a certain cohort over a specified period of time. There are a few additional metrics that should also be tracked, though. Here are a few of them:

• Churn rate
• Retention rate
• Total active users
• DAU, WAU & MAU

Metrics to Measure Product/Feature Popularity

The most typical and relevant metrics to gauge a product's popularity are listed below:

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

Remember, Metrics and KPIs are essential for software product development since they help you increase team productivity and efficiency, ultimately producing the best product.