KPI for Software Development: 21 Metrics to Follow [+3 to Avoid]

In software development, measuring the right KPIs is the key to ultimate success. They help drive efficiency, maintain code quality, and meet business objectives effectively by providing real-time insights into team performance and areas for improvement. 

If you are wondering what KPIs you should track and why they really matter, then you’re in the right place. 

In this article, we will explore different software development KPIs, their benefits, and common mistakes that you should avoid. 

Let’s begin.

What Are Software Development KPIs?

Software development KPIs are key metrics that provide valuable insights into team productivity, code quality, and, of course, your software project success. This helps project managers and engineering leaders make data-driven decisions that align development efforts with strategic objectives to drive long-term success. 

Some essential categories include:

• Coding velocity metrics: Measures how efficiently code is created and delivered. Common KPIs include cycle time, flow efficiency, and time to market, all of which reflect development velocity and progress toward business goals. Besides, DORA metrics such as lead time for changes and deployment frequency offer specific insights into coding velocity and team responsiveness.
  
  
• Collaboration metrics: Tracks team interactions with a focus on effective communication and teamwork. The point is to ensure productive collaboration and improve the software development process as a result. Metrics like deployment frequency and team productivity provide actionable insights here.
  
  
• Predictability metrics: Helps teams estimate development outcomes to enhance sprint planning and align with business objectives. KPIs like flow predictability and historical throughput ensure reliable delivery toward project goals.
  
  
• Stability metrics: Stability metrics assess code quality and the resilience of deployments. DORA metrics such as change failure rate and failed deployment recovery time are valuable here. They will measure your team’s ability to maintain stability by minimizing technical debt and ensuring faster recovery times. The end result is higher customer satisfaction.

Many top tech companies, such as Google, LinkedIn, and Peloton, take multi-dimensional approaches to tracking developer productivity. Google’s Developer Intelligence team, for instance, measures productivity across speed, ease, and quality, recognizing that these aspects interact and reveal trade-offs. 

LinkedIn uses a combination of quarterly surveys, real-time feedback, and system-based metrics to gauge developer satisfaction and tool efficiency. Peloton, meanwhile, integrates both qualitative insights from developer satisfaction surveys and quantitative metrics like deployment frequency and time to restore service, emphasizing a holistic approach to measuring engagement, velocity, quality, and stability.

Why Follow Software Development KPIs?

Tracking software development KPIs is crucial for building high-quality software products through the following benefits: 

1. Visibility and ROI

Following these software KPIs increases visibility for all stakeholders, from management to grassroots positions. Basically, you’ll have a common language that everybody understands. Besides, key executives will see precisely how and where software development impacts ROI.

KPIs also support continuous improvement by highlighting areas that need refinement. Coding efficiency metrics can help your team pinpoint where processes slow down. For example, idle time can indicate bottlenecks.

2. Resource Allocation and Capacity Management

Effective resource allocation ensures that your team is neither overburdened nor underused. Resource allocation capabilities in Axify allow you to distribute tasks across the team evenly. This helps prevent burnout while maintaining optimal pickup times. 

For instance, Work in rogress (WIP) is a worthy metric to track.

Pro tip: If you’re not sure what WIP limit to set, typically, team members -1 can support a balanced workload and let the team focus on finishing “in progress” work before starting new ones. 

In addition, Axify’s historical throughput translates capacity insights into FTE (full-time equivalent) impact. That will give you extra clarity on whether you require additional resources to meet project deadlines and objectives.

3. Alignment with Business Goals 

KPIs are essential components in a slew of frameworks, like Agile, Scrum, Kanban, and other DevOps frameworks. Use them to set measurable goals that promote continuous improvement. 

Also, you can build a structured reporting system that tracks progress across development phases. This keeps the project organized and brings transparency to how each team effort contributes to project goals.

Most Important Software Development Metrics

Here are the three types of KPIs your software development team should track (ours does, too): SPACE, flow, and DORA. Let's break them down.

SPACE Metrics 

SPACE metrics are a framework designed to measure various aspects of software development team performance, with a focus on creating a balanced view that goes beyond simple output metrics. Some of them supported by Axify include: 

1. Developer Satisfaction 

This metric captures how fulfilled, happy, and healthy team members feel within their roles. Axify’s Team Morale tracker provides different metrics that follow developers’ well-being. With its help, you can easily identify areas to improve team well-being and engagement. A satisfied and healthy team is more likely to perform well, collaborate effectively, and stay committed to long-term success.

2. Code Review Velocity

Code review velocity calculates how quickly code reviews are completed, which is crucial for maintaining development velocity and reducing bottlenecks. Faster code review velocity means fewer delays, which allows you to implement changes and improvements more efficiently. It also reflects a well-coordinated workflow where feedback is timely to keep projects on track.

3. Code Review Acceptance Rate

It monitors the percentage of code that passes review without requiring significant revisions. Basically, it highlights the overall quality and readiness of the submitted code. A high acceptance rate suggests that your developers are writing reliable, high-quality code, something that is important to accelerate the development process. This rate also reflects effective collaboration and alignment on coding standards.

Side note: Clickup suggests that a good code review acceptance rate is 75%, which would mean a good code churn rate is 25%.

4. Customer Satisfaction

Customer satisfaction is another SPACE key performance indicator that evaluates how well the final product meets user expectations. It allows your teams to align their development efforts with customer needs to ensure that product updates and features are directed toward enhancing user experience. 

5. Reliability

Reliability is crucial for tracking the stability and dependability of the software to minimize failure rates and ensure consistent functionality. It directly impacts customer satisfaction, as stable software reduces the likelihood of downtime or critical errors that could disrupt user experience.

6. Deployment Frequency

Deployment frequency shows how often code is pushed to production, which reflects the team’s agility and responsiveness. Frequent deployments indicate that the team is able to deliver updates, improvements, and bug fixes at a steady pace. 

7. PR Merge Times

PR merge time measures the time taken to merge pull requests that reflect the speed and efficiency of team collaboration. A shorter merge time indicates that team members are effectively collaborating, which leads to faster implementation of new features or fixes.

8. Code Review Timing

The time taken to review code is code review timing, which shows you the overall flow of the development process. Quick, thorough code reviews are essential for identifying issues early and maintaining the quality of the codebase.

9. Productivity Perception

This software development metric reflects how team members perceive their productivity, which can influence their morale and motivation. It allows project managers to evaluate team well-being, adjust workloads if needed, and ensure a sustainable work pace that supports long-term success.

10. Velocity or Flow Through the System

Velocity or flow through the system offers insights into how work items move through the development process. High velocity or smooth flow through the system indicates an efficient development pipeline, which ensures that work progresses with minimal delays. 

11. Lack of Interruptions

It measures the extent to which team members can work without being disrupted. Studies show that fewer interruptions contribute to higher productivity and deeper concentration, which is crucial for complex software development tasks. 

12. Handoffs

Handoffs refer to the number of times a task is passed between team members or departments before completion. Each handoff introduces potential delays and communication gaps, which can slow down the workflow and increase the risk of misunderstandings or errors. 

DORA Metrics

DORA metrics are developed through DevOps research. They play a critical role in measuring engineering efficiency and enhancing the software development process. 

These include: 

1. Deployment Frequency

Deployment frequency measures how often new code is deployed to production. High deployment frequency suggests that your team is pushing updates and fixes regularly, which reflects a responsive development process. 

This is especially valuable for engineering teams, as it enables them to assess their capacity for continuous delivery. In addition, it ensures timely updates to meet customer expectations while minimizing any downtime.

2. Lead Time for Changes 

Lead time for changes is the time taken for a change to appear in the production environment. This metric indicates your team’s efficiency in getting changes from the first commit to production. A shorter lead time for changes shows streamlined workflows and prompt issue resolution. 

It is often analyzed alongside throughput to identify bottlenecks or unnecessary hand-offs that delay delivery so you can plan sprints more accurately.

3. Change Failure Rate

Change failure rate measures the percentage of deployments that result in failures in production, which provides insights into the quality of the software development lifecycle. This KPI is a key indicator of code stability and deployment reliability. It can help you deduce the effectiveness of code reviews, testing, and quality control. 

Reducing the change failure rate means fewer failures post-deployment, which directly reduces technical debt and, therefore, enhances customer satisfaction.

4. Failed Deployment Recovery Time

This metric, formerly known as MTTR and time to restore service in the State of DevOps report, calculates the time required to restore service after a failure. As a critical measure of quality, it indicates how quickly your team can address and resolve deployment issues to ensure a high level of reliability. 

It works hand in hand with change failure rate to provide a clear view of response efficiency in production environments. A faster recovery time reduces the impact of failures and boosts customer experience along with system stability.

Flow Metrics

Flow metrics offer actionable insights into the efficiency and predictability of the software development life cycle. Some of them are: 

1. Cycle Time

Cycle time measures the period it takes to complete individual tasks in the development process, from initiation to completion. This metric measures task efficiency so you can identify and address bottlenecks that may slow down project completion. 

Axify’s cycle time metric includes idle time, meaning the period when tasks are inactive, like waiting for code review or QA. Having this precise view of total task duration is crucial to optimize active work time. 

2. Throughput

Throughput reflects the total number of items completed over a given time frame. Higher throughput often indicates improved team productivity and efficient workflow. Axify translates the impact of increased throughput into FTE (full-time employee) equivalents, which helps evaluate team capacity for future tasks. 

Furthermore, Axify also offers historical throughput, which is quite helpful in predicting sprint outcomes and project completion without extensive estimation. The best part is that you can calculate this metric at any level you want, such as:

• User stories
• Epics/Features
• Initiatives 

3. Work in Progress

Work-in-progress (WIP) metrics track the amount of active work within the team by offering a clear view of workload distribution across various software tasks. It’s important to maintain an optimal WIP limit (usually one less than the number of team members) to ensure that tasks are well-distributed and manageable. 

For software teams, monitoring this metric helps maintain consistent workflow, reduces task-switching, and keeps development efforts on track for faster delivery.

4. Flow Efficiency 

Flow efficiency measures the ratio of active work time to total flow time across the entire development process. In Axify, this metric highlights the balance between productive work and delays. Contrarily, in the original Flow Framework, flow efficiency specifically compares active work to wait time rather than total cycle time.

Axify’s method gives you a more comprehensive view of the overall process, plus you can always look into other Flow Framework alternatives.

5. Issue Type Time Investment

Axify effectively tracks time investment by issue type, which helps you understand where your team’s efforts are concentrated. This metric, similar to flow distribution, allows you to rebalance workloads by prioritizing tasks that contribute directly to project success. 

Monitoring issue type time investment also helps reduce bottlenecks and ensures alignment with broader business goals because you can focus your team on activities that drive meaningful progress.

What Software Development Metrics to Avoid

Certain metrics can be misleading and ineffective, which can hinder your project’s progress. 

Some of them are:

1. Story Points

Story points are often used as an estimation tool in Agile development to measure the complexity or effort required for tasks. However, relying on them can lead to inaccuracies and waste of time as the cycle time between 3 points and 6 points is often the same in reality. 

Contrarily, throughput, which counts the actual number of tasks completed, offers a more consistent and measurable approach. This data enables you to predict future work more accurately by improving cycle time predictability.

2. Lines of Code

Counting lines of code (LOC) as a measure of productivity is outdated and misleading. More code doesn’t necessarily mean better software quality. In fact, simpler code generally results in fewer bugs, greater code stability, and faster development cycles. Plus, it reduces cyclomatic complexity.

But overly depending on this metric can create a counterproductive focus on quantity over quality, which leads to complex code that’s harder to maintain and optimize. Instead, you should prioritize KPIs like code coverage percentage to gain more insight into code quality and maintainability.

3. Number of Pull Requests

While pull requests can be a useful indicator of collaboration, counting them alone doesn’t provide actionable insights into team productivity or software quality. Not all pull requests are equal in complexity or importance, and using them as a key metric can overlook the distinction of each task. 

Instead, monitoring software metrics like pull request approval time and deployment frequency can provide a clearer view of development efficiency. In addition, you should also focus on the frequency of code changes to understand whether your team is moving toward more stable code and a streamlined delivery process.

Common Mistakes in Software Development Metrics Tracking

The following mistakes in tracking software development KPIs can reduce the overall effectiveness of your efforts:

1. Focusing Solely on Development Activities

A common error that many team leaders make is equating development productivity with only the completion of development tasks, such as generating more pull requests or lines of code. While these metrics might indicate activity, they don't reflect the efficacy of the work. 

Instead, allocate some time to process optimization as well so you can increase customer satisfaction and, therefore, your ROI.

2. Measuring Individual Performances Over Teams or Systems

If you emphasize the performance metrics of individual members, it can create competition rather than collaboration within your development team. Since effective software development requires team alignment and optimized systems, this step is a big no. 

For this, your focus should be on tracking collaborative KPIs like flow efficiency, deployment frequency, and team velocity to get actionable insights for continuous improvement at the system level.

3. Neglecting Customer-Focused KPIs

Metrics that focus only on internal processes overlook the customer experience. Therefore, you must consider incorporating customer satisfaction or feedback KPIs alongside them so your team can see the impact of their work from the user’s perspective. 

This helps align development efforts with customer needs and achieve long-term business success.

Conclusion: Start Tracking Software Development KPIs with Axify

Effective tracking of software development KPIs is essential for understanding every aspect of the software development process and achieving business goals. They support data-driven decisions that enhance team productivity, streamline the software development lifecycle, and maintain code simplicity and stability. 

However, accurately measuring all these KPIs can get overwhelming due to the complexity of managing multiple available metrics. 

That’s where Axify comes in with an intuitive platform that consolidates essential metrics into a single dashboard.

Ready to simplify your KPIs tracking process? 

Sign up with Axify today and get a 14-day free trial to see how we can elevate your development process!