How to Set KPIs to Assess the Performance of the Outsourced Software Development Team?

Why are KPIs so important?

  • Manage the project workloads effectively
  • Identify problems on time
  • Prioritize the work accurately
  • Reduce overtime

Key project KPIs for IT outsourcing


  • Actual costs — which will allow you to regulate ongoing expenses;
  • The budget needed to complete — which enables better estimation of all potential budget deviations.


  • Cycle time — the number of hours/days required to complete the task;
  • Lead time — time in which the task will be completed, taking into account other tasks the team is working on;
  • Team execution speed — which will help estimate the number of iterations the team needs to complete each task (in this case, we recommend using code churn — a measure that shows the rate at which code is evolving);
  • Deployment frequency — that is how often new functionalities are added into production. This metric should be maintained at a similar level for the project duration)
  • Schedule compliance — allows measuring the ability to schedule and complete work on time.
  • Sprint burndown — showing the speed at which work in a particular sprint is completed and how much work remains to be done.

Customer satisfaction

  • Scheduling (on time/deadlines)
  • Quality (service & deliverable)
  • Satisfaction working with the team (taking into account their willingness to be helpful, proactive and good communication)
  • Transparency (providing feedback)
  • Overall customer satisfaction

Working with the customer

  • Customer engagement — for example, the time spent by the customer in meeting the supplier’s requests.
  • Delay time on the customer side — monitoring this factor helps to explain possible delays in the project.




Marketing Specialist at Next Technology Professionals - IT Recruitment | IT Outsourcing

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Aga Babicz

Aga Babicz

Marketing Specialist at Next Technology Professionals - IT Recruitment | IT Outsourcing

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