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Engineering KPIs to Measure In a Down Economy

Most teams are feeling the impact of the current downturn in the economy. Tech companies have experienced layoffs, companies are instituting hiring freezes, and new articles cite team burnout as rising to early pandemic levels. There’s a level of uncertainty in the air, and it’s a critical time for many businesses who were operating to scale aggressively less than a year ago. 

In short, businesses are asking teams to turn the ship, slow hiring, and re-prioritize work, focusing only on what matters most. If 2021 was the year of growth, 2023 is looking like the year of efficiency. And as leaders of engineering teams, it’s important to adapt to this shift in priorities in order to address the needs of the business, your customers, and your teams. 

As business objectives change, leaders are also re-examining what KPIs to track in order gauge progress toward achieving revised business objectives. In this post, we’ll examine what KPIs leaders should consider during an economic downturn. With the right metrics and KPIs, it’s easier to instill confidence in engineering to executive leadership, make better informed strategic decisions, and manage team health and burnout. Let’s dive in.

Metric #1: Allocation

As priorities shift, it’s important to instill confidence in your executive leadership that the engineering team is working on only the highest priorities. Allocation is –  hands down – the best metric for ensuring your engineering team is focusing on the most impactful work to the business. Allocation is a way of visualizing what your team is working on by breaking down the work they do across axes that matter to the business. For example, with Allocation, leaders can see how much work is currently going into new marketable features vs. managing infrastructure or tech debt vs. fixing bugs or customer support issues, etc. 

In short, Allocation informs decisions about where to invest limited engineering resources. With fewer resources, trade-offs need to be made, and Allocation allows for those conversations to be data-driven, transparent, and productive. 

Metric #2: Issue Cycle Time

Issue Cycle Time is a staple engineering productivity metric. In the era of efficiency, it takes on even greater importance. It’s important to have metrics that ensure to your peers that your team is moving work through the software development life cycle as quickly and efficiently as possible. 

However, many factors feed into issue cycle time. Are teams collaborating effectively? Is there too much work in progress? Are we right-sizing work and breaking down PRs into smaller chunks? For this reason, issue cycle time is a great first metric to reference, as a general barometer, if work is moving through the pipeline at a decent tempo. If this trends high, it’s important to look across operational metrics, as well as ask for feedback from the team to understand where processes could be improved. If your team is able to measure it, Lead Time is also a great metric to measure and communicate to your stakeholders in order to truly communicate how long it takes to deliver value to your customer, from initiation of change request through when the change is in production.

Metric #3: Predicted Ship Date

With teams supporting fewer initiatives and projects, it’s even more important that engineering is able to effectively communicate when the projects that they’re supporting are predicted to ship. 

Predicted ship date helps GTM teams plan around the work that they need to support the business. GTM teams have launches to plan, features to sell, and customers to delight. In many companies, predictions can be handwavy, especially when they are done by intuition and experience alone. But it’s better to provide an estimate and need to change it than to provide nothing at all, and your predictions don’t need to be based on guesswork.

By using other complimentary metrics such as burndown rate to inform predicted ship date, you can get better over time at providing accurate forecasts to your peers. Using a data-driven approach, and tools like Engineering Management Platforms, you can incorporate insights about growing scope creep to better update forecasts. 

Metrics #4 and #5: Uptime and Time to Resolution

In tough economic times, your current customer base is the ship that keeps your company afloat. It’s not the easiest time for trying to acquire customers in a new target market; it’s the time for ensuring your customers feel supported and loved. It’s only fair that if they’re advocating to their Finance team why your product is essential, your teams should be able to respond quickly to any issues that your customers face.

Uptime and Time to Resolution are two metrics to consider in order to gauge the overall quality of your team’s work. Your business might be focusing heavily on efficiency, but it’s important not to sacrifice customer satisfaction for the sake of speed. Quality metrics as a metric category are a key part of ensuring a balanced engineering metrics approach, regardless of the macroeconomic environment.

Measure What Matters, While Achieving Balance 

As the engineering organization adapts to changing business objectives, the importance of measuring and aligning only grows. A balanced approach to engineering metrics ensures that your teams are able to pivot as required by the business. The KPIs reviewed in this post are not an exhaustive list of all the metrics that can be beneficial during this time. These are only a subset of the metrics engineering teams can and should be measuring. But we hope that they will help guide your decision-making process and drive more effective conversations and alignment within your executive team and your business.

For a more detailed list of metrics to consider, download the 10 KPIs That Leaders Should Track eBook today.