Setting KPIs for your team is always a great idea because not only is it exciting and engaging, it also helps with focusing on the most important things the team should work on. With that in mind, picking the wrong KPIs means that you won’t be able to learn and adapt properly or even worse make the team focus on things thant don’t matter. Which brings you the question, what best practices should you focus on when setting team KPIs? Each team is different therefore instead of answering this question in general practice, this time let’s focus this article on IT teams.
What best practices are there for setting KPIs for your IT team?
Let’s start with the basics:
- Before you start tracking your KPIs make sure that you have set the right goals for your team. The more planned and focused your goals are, the higher the success rate. Don’t rely on luck, your team’s ‘muscle’ in coding, or what is a available in your project tool. Your team will do great if you will set out the right outlines and right goals. When that’s done, you are ready to start tracking the KPIs to ensure that you are getting closer to your goal with the phase you wish to do.
- Always focus on setting KPIs that are in line with your company’s strategic objectives. Have a meeting or two where you discuss the overall bussinness objectives and what goals and metrics your team should have to align with the strategy. Also beware of the difference between process goals and product goals. The first once are related to how you work and the second is connected to the things you work on. A sprint goal is a common example of product goals.
- Make sure that the goals you choose are SMART. That makes it easier for you to adapt and implement everything adequately.
- Accuracy is key when you pick KPIs. That’s why you want to ensure you choose only the best possible KPIs and that your data sources are correct, consident, and updates frequently at a pace that fits your chosen KPIs.
- Put some time in the planning phase of setting your KPIs. KPIs only work if they are relevant for the team and shows progress quickly after a change has been made.
- Your KPIs should be attainable, and they should have actionable data.
But what are the best KPIs to track in IT teams?
IT is getting tied in the organisation much more than it used to be. Nowadays all departments are way more connected with IT and it is no longer just one department. That means that IT in many places, in software developments especially, will be very closely related to strategic objectives because more and more of the business is related to it. This also means that IT is working with so many different aspects of the business that the KPIs will very between teams.
As the teams are different it is important to remember that the type of IT team you handle is going to influence what KPIs you need to focus on. There are plenty of KPIs out there for you to track like Average cycle time, % completed of planned, Active bugs per story in test, Average deviation from estimate, Burn-down and Burn-up.
Other KPIs include things like Realized Value, Idle time of stories/tasks, Stories left, The total sum of estimates and Average number of active tasks per developer. You can find full catalog of KPIs and read more about each of them here.
Different areas= different KPI needs
Let’s have a look at an operations or DevOps team. One of the first things that comes to mind when talking KPIs in those kinds of teams would be up time. Keeping the applications and servers alive is the most important things for those teams after all. But here comes the tricky part. If you wanna improve team effort then ‘up time’ is not that important, because once the server goes down it goes down- you can’t really change that. You can look at average up time, mean time to repair, incident response time or alike since that’s something that you can affect- how fast is your team to act on an incident. The idea here is that for the sake of KPIs you want to track something that your team can improve.
For development teams it is a different story. Most development IT teams could focus on things like velocity, ability to innovate and throughput rate – how fast you are capable of executing things. Are there things that are staying in your way to move forward? That could be the case when you have stages in the process that are taking way more time than anticipated.
If you have many things that are sitting in backlog for a long time and it is not really moving forward you can measure the average time from when a the new thing enters the backlog and till it is deployed. That is a good KPI to measure to find out if you are understaffed or if there is something in the way, for example maybe your code base is way too old and gives you trouble when it comes to developing new features.
If you are working more agile you would like to make more agile KPIs that are not focused as much on the costs. Since team costs are pretty fixed, it is more relevant to have KPIs in place that optimises the process. Meanwhile remembering that it is the team that decides on things when it comes to process optimisation. They are part of the decision process since they are taking ownership when it comes to setting the goals. While being the part of the process itself they will also know what actually needs to be measured.
Track KPIs to find out which are the parts that give your team the most effort and struggle. By doing that you can be more realistic next time when planning your sprint or it gives you the opportunity to adjust your project’s timeline and budget in real time.
That’s where you monitor Average time in ‘testing’, Average time in ‘todo’ and other average time KPIs. In that way you can find the bottlenecks- if one thing is faster than the other. It can be beneficial when you have internal testing to do for/ by a customer for instance.
Three big concerns
When setting KPIs in an IT team it can be narrowed down to three big concerns. Phase, quality and financial aspects.
Phase related KPIs could be for example: Average cycle time, Average time in ‘todo’/‘in progress’/‘testing’ etc.or Time spent.
Cost KPIs are usually only relevant for reporting dashboards as the one we have on the IT project page – that would show if you are ahead or behind on estimates. Often projects have a specific budget therefore you might wanna keep a track of Time spent on the stories, since time is money – but in the ideal world that shouldn’t be the concern of the team. By tracking the KPIs related to time, it can help form better decisions on which features you should prioritise and which you don’t have the budget to invest in.
Using these best practices and following the right KPIs can have a positive impact on your business. It’s important to assess every KPI and see exactly what it can do for your business. Is it the right IT KPI you want to follow and what benefits does it provide? Doing that can help bring in great value and results for your company in the long term as well as get you closer to your goal faster.