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Software Metrics and Indicators Are More than Corporate Statistical Instruments

Software metrics and performance indicators are more than simple mathematical and statistical elements. They are also elements of psychological and behavioral impact on people and organizations since the way in which they are measured strongly determines the reactions of both people and organizations. Metrics and indicators play an essential role in management, whether for statistical analyses or to align people and teams to common visions and objectives.

As children, we learn to monitor grades at school, our bank accounts and gas gauges as teenagers and adults, and cholesterol and triglyceride levels when we get older or face health problems. Amazingly enough, organizations manage to survive, albeit sometimes precariously, with management models that overlook indicators of performance and results. The current corporate culture of the software industry promotes strict financial control, copes with somewhat slack monitoring of commercial processes and, many times, accepts living in the dark regarding software productive processes. Such managerial behavior wastes the great benefits of metrics and performance indicators, some of which include:

  • Identification of productivity and quality levels that allow us to understand and compare organizations and processes. 
  • Identification of process areas that cause failures and problems, in order to pinpoint investment needs and prioritize corrective actions. 
  • Identification of high performance processes and areas, in order to identify aspects that can differentiate an organization and become competitive advantages or key success factors. 
  • Creation of parameters for planning, projections and estimates, which increase the quality of plans, projects, services and the orchestration of corporate activities. 
  • Establishment of criteria and parameters to set clear objectives and goals that allow us to:
    • create mechanisms for performance evaluation of corporate processes;
    • improve communication of corporate strategies and tactics, including the use of scorecards (such as the well-known BSC – Balanced Scorecard);
    • establish a basis for bonuses, awards and profit-sharing for professionals and teams;
    • evaluate suppliers and business partners; and
    • establish service level agreements with clients, suppliers, partners and even internal clients.
  • Identification of results that show the final impact corporate actions have in:
    • the financial results of the organization;
    • the satisfaction of internal and external clients; and
    • the market regarding the established corporate image, the attained market share and the trends regarding competing or substitutive solutions.

While some assure that managing without metrics is impossible and others feel they can do with little available information, one thing is certain in software management processes: metrics and indicators not only greatly simplify management tasks, they are also essential for process evolution and, consequently, fundamental for organizations to reach high levels of quality and productivity.

 

Ernani Ferrari is the chief consultant of the Boston-based firm Mondo Strategies (www.mondostrategies.com) and specializes in business performance in the software industry. He serves many small, medium and large companies (including Microsoft, IBM and Wolters Kluwer), is a frequent international speaker (PMI, AMCHAM, SQE, IBM, etc.) and is the author of several articles and other publications for this market. Contact: ernani.ferrari@mondostrategies.com

 

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