KPI in software projects – how to plan them?

Whenever you work on a software project, you will likely come into contact with the subject of KPIs. As with any metrics, they only are effective if planned thoughtfully. We have some tips that will help you with that.

KPIs are present across industries in companies of various sizes and structures. They may be related to particular projects, but that’s not always the case – sometimes, they come as a part of seasonal company strategy.

What is KPI in business?

Regardless of all these factors, the objective is always the same. Key Performance Indicators are a tool that allows you to measure how effectively the key objectives of the project or a company are fulfilled. You can use them to evaluate your success in reaching the specified goals. Contrary to typical metrics, KPIs usually are time-bound and contain specific objectives. They do not just demonstrate a particular value, but define an expected one.  

You may be wondering what are KPI examples worth getting inspired by. KPIs may adopt a very different shape depending on a project, but there are some common ones in software development that you may have already encountered, like sprint burndown, cycle time, or code coverage.

How to plan the KPIs?

Throughout our professional experiences, we have learned a few significant lessons regarding software KPIs. We will share them all with you below!

#1 Don’t postpone KPI planning

The earlier you define them, the better. The KPIs should be ready before the end of the first phase of software development. They help you stay on top of things, becoming a signpost for your software team. Whenever the results do not reflect the desired metrics, you know something’s up. If you define KPIs too late, you may miss important red flags, letting the problems escalate unnecessarily.

#2 Define the KPIs for your own specific case

Don’t just borrow them from other successful projects. The fact that they helped others succeed does not mean they will do the same for you. Analyze your project and try to understand it at its core, treating these insights as a starting point. Think about the outcomes you want to achieve and why you want them, and use this as a basis for your KPI planning.

How to get there? There are many possible paths, but if you want something that already worked in practice, here’s how we approach the KPI definition.

First, we ask ourselves: what do we want to achieve? Let’s say the answer is we want to keep our cycle times shorter than in the previous project.

Then, it’s time to define why we want to achieve it. Here, we may assume it’s delivering the software faster since the competition is developing a similar product to ours. 

Once we know it, it is crucial to establish the person responsible for delivering the expected outcome and the result that will prove that we succeeded. We could say it is 7 business days.

#3 Stay SMART

How to verify whether your KPI for IT development is good enough? You can reach out for a good old SMART rule. It serves for evaluating goals in general, but it will work perfectly for KPIs. Whenever you come up with a Key Performance Indicator that seems suitable for your project, verify whether it is Specific, Measurable, Attainable, Relevant, and Time-Bound. If it fulfills all these criteria, it is likely that it will serve you as a good metric.

#4 Review the progress often

From our experience, the KPIs often do not lead the teams to success not because they are not relevant or difficult to measure. The reason may be more prosaic – you review the progress too rarely. As a result, you lack the big picture and realize that something’s not right with the project way after you should. Try to find a middle ground in this aspect, determining review deadlines as often to keep things under control, but not too often, as it may demotivate the team members.

If you follow these tips, you will likely end up satisfied with your KPIs! If drafted thoughtfully, they are a wonderful tool that can help you achieve business success, regardless of your niche.

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