The 5 key software metrics top leaders can no longer ignore

The ouster of Volkswagen’s CEO over buggy software this past summer was a reminder that every company is now a software company—and that senior leaders are being held accountable for the quality of their companies’ code. Just as executives are expected to keep a close eye on revenue and profit, they should pay attention to metrics that show how their software is impacting their users and their business.

Software is central to the customer experience, whether it’s a mobile app, a website, or the software embedded deep inside a Roomba, a Porsche, or a smart TV. Software is core to how people experience and interact with your products and services, and if your software goes down, your sales and your reputation go down with it. 

At the same time, businesses are updating software more frequently to improve performance and stay feature-competitive. With this increased pace of software delivery, errors and performance issues are bound to occur. 

In VW’s case, CEO Herbert Diess was ousted after software problems delayed the launch of new Porsches, Audis, and Bentleys. This followed other problems in which buggy software affected over-the-air updates, forcing customers to visit car dealerships.

But VW is far from alone. In July, a coding error at Canadian telco giant Rogers left millions of customers without phone or internet service. In Kentucky, a whole school district delayed the return to school due to a software issue affecting its buses. And HBO Max was branded a “train wreck” last year for bugs in its streaming app.

By one recent estimate, poor-quality software costs U.S. businesses as much as $2 trillion a year.

Fixing application issues falls to developers, so it’s no wonder so many report feeling burned out and ready to quit. The rise of cloud and microservices has accelerated the pace of software innovation, but those services have also added immense complexity as developers try to deploy and maintain software across multiple platforms and devices.

That’s why senior leaders need to pay attention to what’s happening with their software and its impact on customers. That doesn’t mean immersing yourself in bug reports, but you should know how your software is performing and how it affects customer retention and loyalty. This is especially true when businesses and consumers are watching their spending more closely. In the current economic climate, more than three-quarters of customers say they would switch to a different brand after one poor experience. 

When Twitter blows up with complaints or an important feature is delayed, it’s too late to win those customers back—and senior leaders are being held responsible for the consequences.

Besides heuristics like NPS (Net Promoter Score) and CSAT (Customer Satisfaction) that are broad and fairly prevalent, leadership teams should click a level deeper. Here are five key metrics every leader should be receiving reports on each week:

• Active users of your software, which shows engagement and overall value delivered. This is something that’s often closely tracked for consumer applications, but its relevance extends to B2B software as well.
• The cadence of major new features added over time. Users these days expect constant updates and improvements to keep them engaged. How does your pace of innovation compare to that of other companies in your market? 
• Engagement with new features added. If you’re investing in new capabilities, what proportion of customers are using those features and in turn deriving value from them? If engagement is low, you’re either releasing the wrong features or not marketing them effectively.
• How many times did your product or application crash in the latest update, and is that metric improving over time? This is a strong indicator of the quality of user experience. 
• Speed to resolution: How long is it taking your software team to resolve serious issues when they arise? Downtime is directly connected to lost revenue and churn. 

Software is no longer an adjunct to your business; it’s core to how customers experience your brand and closely aligned to revenue growth and customer attrition. If you’re taking a ride from the airport and your Uber app hangs for more than a few seconds, most people open Lyft instead. Application performance matters. 

Most business leaders will tell you nowadays that they are proudly data driven. They study charts and graphs to understand their P&L, their customers, and the economy. They would be very wise to add software metrics to the data points they study.

Milin Desai is CEO of Sentry, a developer tools company, and the former general manager of cloud services platform VMware.