Engineering KPIs give leaders signals about how their organization is progressing towards goals. Key performance indicators are typically used for reporting and can help track the overall efficiency, effectiveness, and impact of your engineering teams and software development systems.
But which ones should you track, and why are they important?
This guide delves into the types of engineering KPIs and when to use each. We focus on three categories of KPIs: business impact, system performance, and developer effectiveness. Then, we let you know our top 20 engineering KPIs to track. We also explore additional metrics companies find valuable and how you can track these in an engineering KPI dashboard.
Table of Contents:
Engineering key performance Indicators (KPIs) are quantifiable metrics that tell engineering team leaders about the performance, operational efficiency, or impact of engineering. Each key performance indicator is often called a “North Star metric” and is typically used for reporting purposes or to help teams track progress along their strategy.
There are two main reasons software development teams use KPIs:
CEOs and executives often ask engineering leaders to report on metrics to understand the effectiveness of their investment. To do this, engineering team leaders use KPIs to represent their organization’s impact, quality, and effectiveness.
To make sure your strategy is working, you should track its progress using KPIs. For example, a DevEx team might use KPIs to measure and improve developer experience by tracking speed, ease of delivery, quality, and satisfaction. KPIs help the team prioritize their goals and understand how their efforts are impacting the organization.
We recommend three buckets of engineering KPIs to ensure clarity on what impact each metric has: business impact, system performance and developer effectiveness
Business metrics KPIs measure the impact of software development efforts on the business. These include current and planned project roadmaps, business rationale and success metrics, and project status (e.g., delivered, on track, at-risk).
Business impact KPIs demonstrate how engineering aligns with business goals, justifies resource allocation, and assures stakeholders about the ROI of software engineering initiatives.
System performance KPIs are used to evaluate the health and performance of software systems. They measure important factors such as application latency, uptime, and the number of incidents.
These metrics are crucial as they provide insights into the reliability, speed, and user satisfaction of software systems and software development. Such insights are essential for ensuring the best possible software delivery performance, resulting in a superior user experience and business success.
Developer effectiveness KPIs are tools to assess developer productivity. These metrics help us see the advantages of investing in software engineering talent and identify areas where developers and engineering managers can improve. If you have a team focused on development and product or developer experience, they track metrics in this category, like SPACE, DORA, and the DevEx framework.
To measure these KPIs, use a combination of qualitative (surveys) and quantitative (systems) data to measure the dimensions of developer productivity, including speed, ease of delivery, quality, and developer satisfaction.
There are hundreds of possible combinations of software development key results to track. Start with a metric or two in each category that can be easily measured, tied to activities, and iteratively improved over time.
For organizations to enhance their performance by effectively utilizing engineering key performance indicators (KPIs), they should:
Start by defining your goals or strategy at a high level without specific measurement references. If the goal is to improve developer productivity, then we can work backward from that goal to select KPIs to help us understand whether we’re making improvements.
For each of the three categories of software engineering key performance indicators, leaders should combine qualitative and quantitative data for a more complete view. This is especially true for developer effectiveness: a common misconception is that metrics from tools like GitHub and Jira alone can provide a complete view of developer productivity.
However, combining quantitative and qualitative engineering metrics, a mixed-method approach is necessary to gain comprehensive insights into code quality, collaboration, and software engineering team culture.
Establish a routine for monitoring KPIs and sharing reports with stakeholders to ensure transparency and alignment.
Companies that prioritize developer experience, infrastructure, or platform engineering require engineering KPIs to ensure that they deliver value. These specialized areas demand a profound comprehension of the complexities involved in designing, managing, and quantifying technical systems that support a company’s software development organization.
Here’s why engineering key performance indicators are particularly important for developer experience teams.
Software engineering metrics encompass not only the quantity of output but also the developer experience within a company. The helpfulness of instructions (documentation), the ease of onboarding for new hires, and the overall satisfaction of developers are all factors that can be measured. Both quantitative and qualitative engineering metrics can be improved through initiatives aimed at enhancing the developer experience.
Moving beyond using metrics as mere benchmarks, developer experience leaders can understand the underlying reasons behind the success. Instead of just observing that an engineering metric is improving or declining, they are able to analyze why it is moving that way, and how it can be improved. This enables them to make informed decisions tailored to the specific requirements of their team and foster an environment conducive to innovation and success.
Developer Experience strategically links concrete, real-world impact with engineering KPIs. Instead of just chasing numbers, DevEx digs into the stories behind the data, ensuring that metrics aren’t just abstract benchmarks.
For instance, if the code deployment frequency increases, DevEx examines whether it results in a happier development team or potential burnout. This approach turns KPIs into practical insights, shaping a workplace that not only hits performance targets but also nurtures healthy and sustainable work. In connecting the dots between numbers and outcomes, DevEx ensures that the engineering team not only performs well on paper but also experiences positive day-to-day impacts.
To gain a comprehensive understanding of their development processes, most organizations use an engineering KPI dashboard to monitor their selected metrics’ progress using data analytics.
A proficient dashboard not only uses data science to align and predict future metrics but also provides actionable insights for improved decision-making. When evaluating dashboard options, focus on those that offer a comprehensive approach, encompassing both qualitative and quantitative measures.
A robust solution should not only present effective KPIs but also guide in pinpointing valuable insight for enhancing developer productivity. Look for features that facilitate real-time data capture and periodic assessments, ensuring a dynamic and responsive understanding of your engineering landscape, with clear next stesps for an engineering leader or engineering manager.
DX, a developer insights platform conceived by the visionaries behind DORA and SPACE, combines qualitative and quantitative measures, enabling developer productivity leaders to identify key opportunities and translate them into tangible outcomes.
Engineering organizations use DX to implement a holistic measurement program to understand and improve developer effectiveness, one of the three types of engineering KPIs.
DX’s core measurement framework, DX25, captures both drivers and KPIs so leaders can track progress along their strategy and diagnose exactly what factors are affecting speed, quality, or satisfaction.
Request a demo to learn how DX can transform your organization and help you maximize developer effectiveness.