Unlocking Agile Velocity Metrics: 8 Essential KPIs

Agile projects are like self-contained jigsaw puzzles. You can’t solve the entire puzzle with just one piece. 

Velocity is one of the most widely-used agile metrics for measuring team output. But without the right context, it’s often misunderstood and misused. For example, not only is it a terrible way to appraise staff performance, but it can also set your team up for failure if you don’t have a large enough dataset. 

Thankfully, there’s no shortage of complimentary metrics that you can use to add context to your velocity charts. In this guide to velocity metrics for agile teams, we’ll highlight some of the most important ones that we use to track performance and develop estimates here at 7pace.

What Is Agile Velocity?

Agile velocity is a metric used by software teams to measure their progress and performance over time. It is determined by measuring the number of points or story points that the team can complete in a sprint, iteration, or any other given period of time. 

Agile velocity allows SCRUM teams to track their progress, compare their performance against prior sprints, and set achievable goals for future sprints. It’s also a useful tool for product owners as it helps them plan, prioritize, and budget for software development.

Why Velocity Needs Context

Velocity is an estimate of the rate at which teams can build features. It is determined by the number of story points completed in a sprint.

While it provides an approximation of the amount of work that teams are putting in, velocity does not factor in the qualitative nature of the work produced. For example, a team may complete a new feature or functionality in a sprint, but there may be escaped defects attached to it or it may not be able to hold its own against customer feedback. Moreover, the amount of effort required to complete a story point also differs from feature to feature. 

All of these are important considerations for an agile project, but looking only at velocity paints a one-sided picture of progress made that can be dangerous for agile teams. That’s why you need to add context to your velocity reports with qualitative metrics such as development hours, code coverage, escaped defects, and customer feedback.

8 Agile Velocity Metrics that Every Product Manager Should Track

Agile velocity is a quantitative metric. It’s useful for developing an overview of effort required for future forecasts, but says nothing about the qualitative aspect of that effort. That’s why you need to correlate agile velocity with qualitative KPIs, such as these ones we use here at 7pace:

Development Hours

This is the amount of time per task or sprint that is spent on developmental activities. If the agile development team is consistently taking more time to complete tasks, that is an indication that there may be a problem with the process, such as an incorrect estimation of project complexity. It can also serve as an early warning sign of an impending bottleneck. 

Code Coverage

Code coverage is a metric which measures how much of the code is tested. It should be monitored to ensure that the tests are covering as much of the code as possible, and that any new code added to the project is also tested. 

Escaped Defects

Escaped defects are bugs that are discovered once the product is released to the customers. Monitoring the number of escaped defects can tell the team how well the tests are catching bugs. If the number of defects is high, then it may indicate a need to improve the test suite. 

Customer Feedback

Customer feedback can provide valuable insights into the usability of the product. It can be used to identify areas of improvement, and also to gauge customer satisfaction. By monitoring customer feedback, the team can make sure the product is meeting customer expectations. 

Team Satisfaction

Team satisfaction is an important metric which can be used to measure the morale of the team. If team members are generally happy, then that is a sign that the team is working well together and that everyone is collaborating on the project. Team satisfaction surveys are a good way to measure this metric.

Automation Coverage

Automation coverage is a metric which measures how much of the testing process is automated. Automating the tests helps to ensure that the tests are running quickly and accurately. It also helps to reduce the amount of manual effort required to test the code. 

Technical Debt

Technical debt is a metric which measures how much effort will be required to maintain the code. Poorly written code or code that is not well documented can lead to higher technical debt. Monitoring this metric can help the team keep their codebase in a manageable state. 

Code Complexity

Code complexity is a metric which measures how complex the code is. Complex code tends to be difficult to maintain and can lead to bugs. Monitoring this metric can help the team identify areas of the code which need to be refactored or rewritten. 

Understanding How Time Tracking Compliments Agile Velocity

Time tracking can help you get a better understanding of how many development hours you’re spending on tasks and what areas of your process could use improvement. 

Whereas velocity is just an abstract measure of the effort required to burn through a backlog, time tracking offers a way to finitely quantify and qualify that effort. It helps you, as a product owner, get a full picture of your team dynamics and identify bottlenecks in the process.

7pace: The Developer-Friendly Time Tracker for Agile Teams

7pace is a time-tracking tool that integrates natively to your existing development environment, such as Azure DevOps or GitHub, providing detailed information on team performance directly inside your preferred platform. 

We’re developers first and foremost here at 7pace, which is why we have built a time tracker that helps software teams achieve the most without getting in their way. That means rethinking our entire approach to time management.

Whereas time trackers are often built into a tech stack as an afterthought for micromanagement, 7pace is based on the idea that this data should be used not to scrutinize staff performance but to develop better estimates as a product manager. 

With 7pace, you can actually see the amount of time spent by each member of the team on each user story or project iteration — as granularly as you please. That way, you can improve the accuracy of your estimates by measuring your “pace,” a metric we invented by dividing the number of development hours tracked by the total number of work items for a sprint or iteration.

Want to learn more about how 7pace can help you get better at project management as a product owner or development lead? Sign up and get started today!