11 Software Development KPIs To Track in 2024

11 Software Development KPIs To Track in 2024

This recent Google report proves that data-driven organizations are getting larger profits – a claim you may consider trivial in 2024. Less trivial is a question of how to be data-driven in areas like project management – and how to use quantitative data to organize software development teams. 

Software development KPIs are designed to help you do just that – use statistics to deal with problems, make informed changes, and set realistic goals. 

Here is a list of KPIs you can start using today – and a couple of those you should approach with caution. 

What are software development KPIs? 

Software development KPIs are metrics used by product managers to evaluate the productivity of development and testing teams. They can help measure progress, identify bottlenecks, reallocate resources, and plan future work. 

Types of KPIs for software development

Each software development KPI measures a particular aspect of your team’s productivity. It’s useful to divide them into four types. 

Productivity and performance metrics

These software engineering KPI metrics measure how effective your workflow is, how quickly your team completes tasks, and how much time is spent on activities like fixing code, reviews and approvals, etc. They provide you with insights that can be used to improve organizational workflow. 

Code quality metrics

These software KPIs measure the quality of code written by developers. They show how well the code performs after deployment and how effectively the team maintains it. Code quality metrics can be used to troubleshoot bottlenecks and improve the quality of final output. 

Testing metrics

These software engineering KPIs measure the effectiveness of QA and testing processes. Getting this information will help you analyze the work of QA specialists and determine if changes have to be made. 

Incident metrics

These KPIs for software engineers measure how often incidents occur and how quickly your team responds to them. They can be used to assess the reliability of your software and improve incident response strategies. 

types of software development KPIs

11 Software development KPIs to track: productivity metrics

Cycle time

What is it? It’s an Agile methodology metric that shows how much time on average your team needs to complete a single task. It measures the time spent on coding, review, pickup, and deployment of code. 

Why is it important? It lets you know the average productivity of your team, which allows you to plan future tasks realistically. It also helps you to identify exact processes that cause delays and idle time. 

How to measure it? You can manually track the number of days it takes to complete a task. More frequently, managers use work management apps, cumulative flow charts, or Kanban boards to track cycle time along with other KPIs. 

What if cycle time is long? Long cycle time indicates bottlenecks in your processes and slow time-to-delivery. Look at your results, figure out which process takes too much time, and reach out to people responsible. More often than not, PR size is one of the main issues causing long cycle times. 

Deployment frequency

What is it? It’s a DevOps Research and Assessment (DORA) metric that shows how frequently you deploy changes to production – such as bug fixes and product updates. 

Why is it important? DORA recommends avoiding large deployments, since they carry unnecessary risks. This metric incentivizes you to deploy code in small chunks, which allows your team to get more feedback and make quick iterations. 

How to measure it? This software KPI is easy to measure – just count the number of deployments per period of time – a day, week, or month. You can also use analytics tools like Gitlab and Jenkins.

What if deployment frequency is low? According to the DORA team, low deployment frequency is when your team makes less than one deployment in 6 months. There might be various reasons for that – sometimes deployment frequency isn’t high because of project complexity. If you’re not satisfied with the results, look into other metrics to figure out the causes. 

Flow efficiency

What is it? It’s a metric that measures the proportion between the value-added time and lead time – that is, between time actually spent working on a task, and time it eventually took to complete a task. It shows how much time your team members spent on waiting for something instead of working – for a review to be completed, for example.  

Why is it important? It allows you to spot areas of inefficiency in the workflow and reduce time gaps. This is usually much easier than forcing your team to write code faster. 

How to measure it? To calculate it, divide the total time spent working on a task by total lead time and multiply by 100%. For example, if you needed 6 days to finish a task, but you spent only 1 day actually working on it, the flow efficiency is 17%. Usually, this metric is tracked if you’re working with a Kanban board. It shows when the task is queued, but nobody can pick it up yet.

flow efficiency measurement graph

What if flow efficiency is low? Kanban states that good flow efficiency is about 40%. To improve your flow inefficiency, dive into the issues that cause increased wait times and see what you can do to resolve them. 

Cumulative flow

What is it? It’s an analytics tool in Kanban methodology that gives you a visual overview of your workflow. It shows the number of tasks in each stage of your workflow (“To-Do”, “Work-in-Progress”, and “Done” tasks) in a certain period of time. 

Why is it important? It helps to allocate resources. The bands on the chart show whether your team has more tasks then it can complete over a given period, or, conversely, if there are spare hands to do more work. Adjusting the number of tasks will help you to prevent bottlenecks and maintain the stability of workflows. 

How to measure it? Cumulative flow is a visual chart. Ideally, the bands in the chart should progress in parallel – this means that new tasks are entering the workflow as soon as older tasks are completed.  

What if the bands are not parallel? If the bands are rapidly widening, focus on tasks that are in progress before starting new ones. If they are narrowing, this means you have more capacity than you need, and you should reallocate resources to optimize the flow.

cumulative flow diagram

Sprint burndown

What is it? It’s a chart that shows the rate at which the work is completed and the amount of work that remains to be done. It shows your team’s progress towards the sprint goal – not in terms of time, but in terms of the amount of work that still needs to be done. 

Why is it important? This software development KPI allows you to see how quickly the team is moving towards the goal. The chart makes it easy to spot if you start to deviate from the planned schedule. You can also see how specific tasks added during the sprint affect the progress, and predict how much time it will take to complete the work based on estimates from past sprints. 

How to measure it? Sprint burndown charts differ depending on the project management tool you use. Jira, for instance, wrote a tutorial that explains how to use their Sprint burndown charts. 

What if my sprint burndown chart isn’t good? A perfect sprint burndown line gradually moves down as the time progresses. Different types of deviation from the chart can indicate issues like bottlenecks, overly large tasks, underestimation of difficulty of work, and others. 

sprint burndown graph example

Software development KPIs: code quality metrics

Change failure rate

What is it? It’s a metric that determines the percentage of changes that lead to failures after the code is released to production or to end-to-end users. 

Why is it important? It shows the quality and stability of code. You can also use it to estimate financial losses from failed deployment, as well as costs spent on fixing the issues that led to failures. 

How to measure it? First, define what counts as a failure. This can include failed tests, triggers of incident management tools, and rollbacks of changes. Then, divide the number of failed deployments by the total number of product deployments over a given period. If, for example, 2 deployments out of 10 failed, your change failure rate is 20%. 

What if the change failure rate is high? Google estimates that 10-15% failure rate is a norm even among the very best development teams. If your CFR is high, this means that your team spends a lot of time and resources on fixing the broken code. Evaluate the quality of your testing to see why the tests fail to detect issues before release. 

Bug rate

What is it? It’s a software engineering KPI that calculates the number of bugs found in a piece of code during the testing. 

Why is it important? It shows the quality of your code. Depending on the way you measure it, you can use it to identify segments of code that need refactoring or additional testing, categorize bugs, and prioritize fixing the most severe issues. It also helps to assess the overall effectiveness of the testing process. 

How to measure it? You can measure the number of bugs per test case, per line of code, per hour of testing, or per severity level. The software used by your QA specialists might help with measurements. 

What if there are a lot of bugs? If your bug rate is overly high, take time to analyze what the problem is. Perhaps your code is overly complex, or your developers don’t review the code well before submitting it to testing. 

Code churn

What is it? It’s a metric that shows how often a part of code such as a file, a class, or function – gets edited. High code churn shows that the developer is struggling to write well-functioning code. 

Why is it important? It can indirectly point to multiple issues in the team. Your developer may lack necessary skills or be working in a rush without fully understanding the domain. It might also indicate issues with testing. 

How to measure it? Code churn is measured with specialized tools such as Azure DevOps server from Microsoft. 

What if code churn is high? Normal code churn is around 25%. However, it might differ depending on the stage of the project and your team’s working style. A good practice is to track the average level of code churn and reach out to someone who seems struggling if you notice strong deviations. 

Software development KPIs: testing metrics

Code coverage

What is it? It’s a metric that calculates the percentage of your code that was exercised during testing. 

Why is it important? It shows how thorough your testing processes are. If the tests made by your QA team fail to test important parts of your software, you risk releasing buggy software that will leave your customers dissatisfied. 

How to measure it? Code coverage is calculated by specialized tools like Atlassian Clover, Coverage.py, SimpleCov, and others. These tools provide you with reports that describe the number of functions, statements, and lines of code that were executed. 

What if code coverage is low? Businesses should aim for 80% code coverage. Having code coverage above that may not necessarily be beneficial. Aim to gradually increase code coverage, while encouraging your testing team to focus on the user’s perspective when writing the tests. That is more important than the number of the lines of code that were covered. 

KPIs for software development: incident metrics

Mean time between failures

What is it? It’s a metric that calculates average time between repairable failures of your software. 

Why is it important? It helps to understand how reliable the product is. The longer the time, the more reliable the product is. 

How to measure it? Gather data about the total operational time of the product and the total downtime in a certain period. For example, if in 48 hours there were 2 hours of downtime, the total uptime is 46 hours. Divide that by two, and you’ll get 23 hours – your MBTF. 

What if your MTBF is low? If the MTBF is low, this means that your software lacks reliability. This may significantly affect customer satisfaction. Dive into the causes of failures and try to find solutions that would make your system more reliable. 

Mean time to recovery

What is it? It’s a metric that calculates the average time it takes for your team to recover from a system failure. 

Why is it important? It’s important for assessing how effective your team is at responding to failures. It can help to isolate problems with alert systems, diagnostics, or maintenance. 

How to measure it? Add up all downtime for a specific time period and divide it by the number of failures. For example, if there were two incidents due to which your system was down for 60 minutes, divide 60 by 2. 30 is your MTTR. 

What if your MTTR is long? Long MTTR can indicate various issues. Dive into the data to find out whether your alert system isn’t working properly, whether it takes too long for someone specifically to respond to a request, or whether it’s something else that’s blocking your team from resolving issues promptly. 

Software KPIs to avoid in 2024

Some software engineering KPIs are vague and may cause more problems than help in most cases. 

Development velocity

What is it? It’s a metric used to estimate the amount of work your team can complete during the sprint. 

What’s the problem? Velocity should be used to estimate how accurately your team can predict the amount of time it will take to complete story points – it’s a tool for prediction and calibration. 

However, many product managers use it as a performance tool – trying to aim for higher and higher velocity. This forces developer teams to skip code reviews or stop writing tests, which decreases code quality and accumulates technical debt. 

Number of test cases

What is it? It’s exactly what it says – the number of test cases that were executed by your QA and testing team. 

What’s the problem? The number of tests doesn’t show their quality. To evaluate the quality of app performance testing, use more precise metrics, such as code coverage. 

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What are the benefits of software engineering KPIs?

Software development KPIs tell you how effectively the development team is meeting your business goals. A low score on each metric can point out hidden problems – lackluster testing, bottlenecks in the review process, or a growing risk to miss the final deadline. KPIs show you the symptoms of internal issues within your team and direct you towards investigating them. KPIs can also help to: 

  • Set realistic productivity goals for future projects 
  • Reallocate resources when capacity is lacking – or the opposite 
  • Improve the quality of code
  • Increase the effectiveness of communication
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Software development KPIs are essential for managing engineering teams. Without tracking the relevant metrics, you risk accumulating issues that are not immediately visible – and which will later turn into missed deadlines and less-than-ideal quality of final output. 

It's important to correctly understand the meaning and purpose of each KPI – as the example with development velocity shows, treating KPIs as goals-in-themselves can often lead to worse outcomes than not tracking them at all. Remember that each KPI only tells you the numerical data, and you’ll need to figure out the causes of problems by communicating and collaborating with your development team. 

If you’d like to know more about how to manage an outsourcing team, read our blog on IT vendor management – or just book a call with us. We are always ready to provide you with a professional consultation.

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