Top 25 Engineering KPIs You Should Be Measuring This Year

Engineering KPIs List

Engineering KPIs are metrics that track and measure the R&D engineering team, software engineering industry, and consulting engineering team or company’s core operational efficiencies over time. The engineering team (or company) plays a key role in many different industries. Therefore, it is critical to ensure that engineers meet their key performance objectives all the time.

Research and Development Engineering Objectives

The Research and Development engineering objectives or KPIs are designed to track and measure the R&D engineering team’s operational efficiencies, including improving the existing product support cost, the engineering team’s effectiveness, the outsourcing rate, and the payback period over time; the higher these metrics, the greater the team’s operational efficiencies.

  • Improve the existing product support cost – This engineering KPI tracks how much it costs your company to support existing product lines relative to how much revenue they generate each year. The higher this cost, the greater the risk of needing to retire the product line.
  • Improve the engineering effectiveness – This engineering KPI tracks and measures how much the engineering team costs relative to the number of projects they support or the number of products sold. The higher this metric, the greater the engineering team’s operational efficiencies over time.

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  • Improve the R&D Cost/Benefit ratio – This KPI tracks and measures the extent to which the engineering team is able to improve the R&D Cost/Benefit ratio over time and compares it to the potential financial gain the project will bring. The higher this metric, the greater the engineering team’s operational efficiencies.
  • Improve (reduce) the payback period – The payback period KPI is used to determine how long it would take to pay off the efforts of your engineering team or the engineering team’s operational efficiencies. The higher this metric, the shorter the engineering team’s payback period over time.
  • Improve the outsourcing rate – This KPI tracks and measures how much of your engineering work is outsourced versus being completed in-house. It measures the total number of external staff to the number of in-house employees. Currently, outsourcing is preferred over the full-time staff that might not be needed all the time.
  • Improve Engineering-on-Time delivery – The Engineering-on-Time delivery KPI tracks and measures the extent to which the engineering team completes projects on time. The. higher this metric, the greater the engineering team’s ability to meets its deliverables on time.
  • Improve the Cost Performance Indicator (CPI) – The Cost-Performance Indicator (CPI) is designed to determine how well a project went from an engineering cost perspective. The CPI takes the budgeted cost of work performed and divides it by the actual cost of work performed. The higher this metric, the greater the engineering team’s operational efficiencies.
  • Improve the Schedule Performance Indicator (SPI) – The Schedule Performance Indicator (SPI) tracks and measures the budgeted cost of work performed by the budgeted cost of work scheduled. The higher this metric, the greater the engineering team’s operational efficiencies over time.

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Consulting Engineering Objectives

The consulting engineering objectives or KPIs are designed to track and measure the consulting engineering company or team’s operational efficiencies, including aspects such as improving the number of clients and new clients, improving the utilization rate and the average rate per hour, and the repeat business rate over time.

  • Improve the number of clients – One of the critical components of consulting engineering is clients. This KPI tracks and measures the number of active clients a firm has over time. The higher this metric, the greater the consulting engineer’s operational efficiencies.
  • Improve the number of new clients – It is important to differentiate revenue streams from new and existing clients. This KPI tracks and measures the extent to which the consulting engineer can increase the number of new clients over time. The higher this metric, the greater the consulting engineer’s operational efficiencies.

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  • Improve the percentage of revenue from existing clients – The revenue from existing clients is generally a lot cheaper than revenue from new clients. Working with existing clients can also be more efficient, as you already know how they function, leading to further financial gain. This KPI measures the consulting engineer’s ability to increase revenue levels from existing clients.
  • Improve the repeat business rate – The repeat business rate KPI is designed to determine how many times a client will come back to you for work after the initial relationship has been established. The higher this metric, the greater the consulting engineer’s operational efficiencies over time.
  • Improve billings – The billings KPI is designed to track and measure how much the consulting engineering firm is able to bill clients over time. The higher this metric, the greater the consulting engineering firm’s ability to bill clients over time.
  • Improve the project margin – Each project that a consulting firm works on will have a certain level of assumed profit built into the fees. The project margin KPI tracks and measures a specific project’s margin relative to its revenue. There needs to be a healthy profit, but not too much that clients are overcharged.
  • Improve the utilization rate – The consulting engineering firm must achieve a reasonable utilization rate, which measures the amount of time billed toward a client versus the total working time. This KPI tracks and measures the consulting engineering firm’s utilization rate over time. The higher this metric, the greater the firm’s operational efficiencies.
  • Improve the average fee per hour – When working on projects with other engineers of different experience levels, some billing rates might be different. This KPI combines the rates of all the consultants on the job to determine what the job’s hourly rate is. The higher this metric, the greater the consulting engineering firm’s operational efficiencies.

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Software Engineering Industry Objectives

The software engineering industry objectives or KPIs track and measure the software engineering team or company’s operational efficiencies, including reducing downtime, reducing running costs, increasing the number of releases, reducing the developer delta, and reducing the number of software bugs over time.

  • Improve the number of productive developers – Increasing the number of developers in a team or organization without paying attention to their productivity metrics is not ideal. This KPI tracks and measures the extent to which the software engineering team is able to improve the number of productive developers over time.
  • Improve the number of releases – This KPI tracks and measures the extent to which the software engineering team is able to improve the number of software releases over time. The higher this metric, the greater the software engineering team’s ability to increase the number of software releases over time.

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  • Improve (reduce) the developer delta – The developer delta is the rate of change in the developer team over time. This KPI tracks and measures the extent to which the software engineering team or company can improve or reduce the developer delta over time. The lower this rate, the lower the employee turnover metrics are.
  • Improve the number of comments per pull request – This KPI tracks and measures the software engineering team’s ability to improve the number of comments per pull request to ensure that the optimal number of comments are added over time. The higher this metric, the greater the software engineering team’s operational efficiencies over time.
  • Improve (reduce) the number of software bugs – This KPI tracks and measures the extent to which the software engineering team is able to improve or reduce the number of software bugs over time. The highest this metric, the greater the software engineering team’s ability to improve or reduce the number of software bugs over time.
  • Improve (reduce) the running costs – This KPI tracks and measures the extent to which the software engineering team or company is able to improve or reduce the operational running costs over time. The higher this metric, the greater the software engineering team’s ability to reduce its running costs over time.
  • Improve (reduce) the average downtime – This KPI tracks and measures the extent to which the software engineering team is able to reduce the software application’s downtime over time. The higher this metric, the greater the software engineering team’s ability to reduce downtime in all software applications.

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These engineering KPIs form an integral part of ensuring that the different engineering teams, including R&D engineers, consulting engineers, and software engineers, meet their critical organizational capabilities. In addition, the successful implementation of a robust engineering strategy plays a vital role in ensuring that the organization meets its stated targets and goals, both long and short-term. Consequently, measuring these objectives is key to organizational success. They focus on tracking metrics grouped in three result areas: R&D engineers, consulting engineers, and software engineers.

It is imperative to track and measure these KPIs over time because they offer insight into the organization’s engineering teams’ efficiencies and where improvements are needed. Metrics such as improving the existing product support cost, improving the engineering team’s effectiveness, reducing the payback period, improving the number of clients and new clients, as well as improving the repeat business rate are all integral to ensuring organizational success.

Implementing R&D engineering, consulting engineering, and software engineering objectives or KPIs solves the challenge of ensuring consistency over time. High-performing metrics are valued, translating into an effective engineering team and company strategy and the application by the risk management team. On the other hand, low-performing metrics must be revisited as they indicate poor performance and detract from operational and organizational success metrics.

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