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Evaluating Success: Metrics And KPIs For Measuring The Impact Of Software House Cooperation

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Defining success in software house cooperation

Having common ground is crucial in any cooperation. Your company and the software house you are working with may have a different definition and perception of success, which could affect the project results. It is worth defining your goals and objectives for such a partnership before you even make a final partner choice. 

Some software houses may refuse to use KPIs to evaluate their work since it puts much more pressure on them, but a confident partner will understand their importance. Of course, these initially established KPIs can be renegotiated once you choose to work with a particular company. Try to find the consensus, defining success criteria together. Be realistic, or otherwise, these metrics won’t be useful. That means when establishing the KPIs, take the project scope, market challenges, etc.

How to choose the right Key Performance Indicators (KPIs) for measuring project success? In-house vs. outsourcing software development

Whether you work with your internal team or an external software development company, you will likely establish KPIs to control and evaluate the outcomes of your efforts. However, in the second scenario, you should structure your metrics differently than when working on your own. You will still need the KPIs that relate to the digital product itself, but it is important to also add those that evaluate the collaboration itself.

Business impact and technical metrics for the software house

These metrics are applicable to any project, regardless of whether you are working with a software house. Time-to-Market is a crucial KPI, especially if you are putting product development into the hands of an external team. 

Why is it so important? If you have an innovative idea or concept, you want to bring it to the market first – the longer the process extends, the more chances there are that someone else picks it up, taking away your competitive advantage. It’s important to keep it real – ask the software house about their previous realizations and establish expected time to market based on their experience, too. It’s supposed to be motivating, not terrifying!

Other KPIs in this area may include:

  • Return on Investment (ROI) – software projects are often unpredictable, and their success depends on many factors, so likely the software house will not want to use this KPI as a guarantee, which happens 
  • Performance metrics like response time, latency, error rate, etc. They will depend on the character of your project – for instance, if your app is task-intensive and has to handle multiple users, throughput may be another crucial KPI. You can acquire the data on these metrics from crash reports, testing reports, etc.
  • User satisfaction metrics like churn rate, retention rate, and net promoter score (NPS) – while they refer to the selection of the requirements, they may also signal incorrect technical choices or errors in development. You can collect such information through surveys and user feedback.

Collaboration metrics to use when working with the software house

The collaboration metrics will help you make the most out of your partnership – based on the specific KPIs you can point out the areas for improvement through the course of the project and actively contribute to its success even if your team doesn’t directly participate in development. 

These KPIs are harder to establish, but here are the areas to look into when discussing them:

  • frequency and quality of communication – did the software house keep you up to date with the project progress as much as you expected? Did they use suitable tools? Were they available enough?
  • Agile software development metrics (applicable if you work in this methodology) – sprint progress, backlog management 
  • flexibility – was the team capable of adapting to requirement changes and using your feedback to improve the outcomes?

If you use these metrics throughout your cooperation, there is much more chance you will bring a successful product to the market!