Every software company in the world has one outstanding concern – delivering high quality software in a short time and at significantly lower costs. They are constantly challenged with quantifying the investment made in following an Agile development process because it is such a key factor in determining the overall ROI (Return on Investment) of a software development project.
We have gathered up 5 key metrics that will help you measure your software performance. Analytics is a key component of software development because improving software performance is heavily dependent on optimizing as the project progresses. There are two main aspects to measuring an agile team’s performance:
- The first step should be to identify an area to improve on and track that for a few iterations to identify the right tweaks required
- The second step would be to move to the next level once things start to improve. You can then stop the tracking process by moving to the next pain point.
You can choose from different metrics, but the results may vary depending on the methods you implement in your Scrum process. Metrics should be used in a meaningful context and not in a random manner. Even before you start, the first question any team lead should ask him/herself is – what I am trying to achieve and what is the complexity of the product? The size of the Agile team and experience of the developers should also be kept in mind in order to get a comprehensive analysis. These questions will not only help you decide the right metric, but also put your analysis of the metrics in the right context.
Let’s take a quick look at 5 valuable metrics you can start tracking immediately to drastically improve the performance of your Agile team.
1. Velocity – Velocity, a vital component in iterative planning, is widely accepted as an important metric to measure team performance. Velocity helps the team understand how much they can deliver and in what duration, as the release date draws closer. If a team has a high velocity, it implies that it is delivering more in each sprint. It helps the team assess how quickly they can complete the assigned tasks and release the product for the end-user/ customers. In most cases, the velocity is calculated using mathematical equations, where the work done by the team during previous sprints is reviewed.
2. Story point and completion ratio – This metric is used to estimate the complexities involved in implementing a given story. In an Agile project development, a story relates to a specific business requirement that has to be completed by a team of software developers. Usually, story points are conveyed in a numerical range, similar to a Fibonacci sequence. Managing backlog becomes easy with story points, as it aligns the team’s work with the business value that has been promised to the customer.
3. ROI – ROI is an undeniably important metric for any software organizations. ROI holds special significance in an Agile project because it has the potential to start generating income from the first release and generate further profit margins with every subsequent release. Measuring ROI helps analyse the ongoing value of an agile project and justifies project effort from the primary stages of development. It allows companies to financially support projects based on ROI potential and enables software companies to track individual projects and performance of the organization as a whole.
4. Tracking defects – It’s hard to imagine a project with zero defects. Agile methodology helps development teams reduce defects to a considerable extent by incorporating the use of defect tracking metrics to stay prepared in the event of software failure. Especially when release timelines are short, defect tracking metrics provide an objective picture of the agility of the product team. This metric is effective in measuring the test team's effort and the turnaround time to remove a bug.
5. Measuring team turnover – This is a very important component of measuring scrum team performance. If your development team is healthy, it would reflect through a low team turnover. High turnovers in scrum teams indicate major issues with the project such as incompatibility, burnout rates, and even a scrum master failing to remove obstacles. Before the project can progress further, these issues need to be dealt with upfront.
While there are multiple metrics in the market to measure your team’s performance, individual ISVs should prudently consider which ones are most relevant to their specific business needs and goals. During the measurement process, consider involving the whole development team and analyze data collected from regular metrics reports to generate more ideas for improvement. It should be noted, however, that no matter how many valuable metrics being used, an agile team’s performance always comes right back to hiring an optimal resource mix. Once you are sure you have built the right team, start thinking about how you can incorporate and align your measurement system with your development team.