

Journal of the Technical University – Sofia

Plovdiv branch, Bulgaria
“Fundamental Sciences and Applications” Vol. 21, 2015
International Conference on Engineering, Technologies and Systems
TECHSYS 2015
BULGARIA

ISO 22400 KEY PERFORMANCE INDICATORS

FOR SOFTWARE INDUSTRY
PLAMEN VASILEV
Abstract: The importance of Metric-driven approach of Management in Software Industry
can be explained by finding the necessary indicators showing the execution of set goals and
allocation of opportunities for improvement. These indicators can be introduced following
industrial standards ANSI/ISA 95, ISO 22400, and the application of Manufacturing
Operations Management (MES/MOM) system for the purposes of Software Industry. The
Key Performance Indicators described in the standard have to be transformed in order to
be meaningful to the needs of Software Industry processes.

Key words: ISA-95, ISO 22400, MES/MOM, MOM4, KPI, Software Industry

Copyright  2015 by Technical University - Sofia, Plovdiv branch, Bulgaria ISSN 1310 - 8271
1. Introduction
 The software industry is one of the fastest
growing industries worldwide. Characteristic of the 2. ISO 22400
software industry is that it goes through the stages
of development through which passed the The standard ISO 22400 Automation
traditional manufacturing industry, but within a few systems and integration - Key performance
decades, the emergence of software companies from indicators (KPIs) for manufacturing operations
only a few people to large international companies management, comes as a natural extension of the
with multiple centers around the world and standard ANSI/ISA-95 (IEC 62264) [5, 6]. Since
hundreds of thousands of employees and customers. the standard ANSI/ISA-95 can be applied for the
Each company aims to compete with global purpose of the software industry [8], the
companies to ensure same or rapidly increasing information collected from an ANSI/ISA-95 based
quality at lower prices (Outsourcing), with an MES/MOM system should be analyzed and
increasing level of standard of living. [1,2] presented in a meaningful manner with the help of
This requires the introduction of new methods of specific KPIs for the software industry.
management of the software industry, ensuring the To realize the intended benefits for the software
achievement of high efficiency and reducing losses industry, the information about the process,
as their main source of raising the price of the final employees, used documentation and equipment,
product. [7] collected by the system must be efficiently used in
Since the software development has become a fast- order to improve productivity of the company’s
developing industry in which every company has its resources.
own Business Process Model, a conclusion can be Following ANSI/ISA-95, Figure 1 illustrates the
made that for the modeling of the software kinds of data that are presented in the Key
development process an industrial standard such as Performance Indicators generated at Level 3.
ANSI/ISA-95 can be used.
ISA-95 is the international standard for integration
of enterprise and control systems. ISA-95 consists
of models and terminology for covering all the
activities of for production, maintenance, inventory
and quality. These can be used to determine which
information has to be exchanged between systems
for sales, finance, and logistics and systems for
production, maintenance, and quality. This
information is structured in UML models that cover
all objects in the industry such as Personnel,
Equipment, Material and Process Segment used for
scheduling, execution and analysis tasks.[3]
Key Performance Indicators may also be considered
as economic indicators used to assess the progress
or degree of compliance with regard to important Fig. 1. KPIs in MES/MOM systems
objectives or critical success factors within an
organization. An economic indicator serves as a The Key Performance Indicators can be grouped
basis for decisions (problem identification, in the following categories:
presentation, information extraction), for control
 Temporal Key Performance Indicators
(target / actual comparison), for documentation
and/or for coordination (behavior management) of  Key Performance Indicators by Order
important facts and relationships within the  Key Performance Indicators by
company. Production Unit
KPIs alone are not sufficient factors to perform the
necessary management and execution operations for
an enterprise. For many of the indicators, the actual
threshold may have to be defined as company-
specific. If the value of the indicator exceeds or falls
below the limit, actions are intended to be initiated
to improve efficiency. It is necessary to define
warning and action limits. Warning limits help to
detect the trends in process and equipment changes
before enterprise-defined thresholds are violated.[4]
 Fig.2. Time lines for order processing
Fig. 3. Time lines for Production Unit
3. Key Performance Indicators For
Software Industry
The calculation of Key Performance
Indicators only makes sense if it is a part of an
overall system which includes Resource
Management, Planning and Scheduling, Execution
and Calendar Management. In such system all the
objects must have the needed properties and
behavior which can be realized by the means of
state transitions of these objects (i.e. Production
Order, Work Order, etc.). The following examples
of state transitions are taken from ANSI/ISA-95
based MES/MOM system MOM4 of the company
NearSoft Europe GmbH.[9]
Fig. 4. State transitions of Production Order and
Work Order
Example of state transition for Production Order:
• DRAFT – The Production Order (PO) enters in
state "DRAFT" by default when created in the
system. PO can be edited and deleted, and is open to
group additional Customer Orders.
• ACK - capable of handling PO, PO is accepted for
planning and closed for grouping of new Customer
Orders (if there are such objects in the system). The
PO can be deleted.
• OPO - "Open Production Order" in this state for
the PO are added production rules, a routing with
Work Orders and material lots in state "Virtual" is
built. PO can be rescheduled.
• FPO - "Freeze Production Order" in this state the
PO is removed from any further rescheduling, any
editing operations are not allowed. The PO takes
capacity in the calendar.
• RELEASE - shows that the PO is ready for
production and the WOs can be sent for execution.
• INPROC - "In Process" is taken automatically
when the first lot of the first WO enters in state
"InProcess"
• FINISHED - shows that all relevant lots to last
WO are completed. Information from PO is
recorded and archived for further reporting and
analysis.
• STOP – The PO passes at a standstill, when a WO
is stopped.
Example of state transition for Work Orders:
• DRAFT – Work Order (WO) accepts state
"DRAFT" when entered manually. WO information
can be entered and edited.
• READY – The WO accepts state "Ready" when it
is ready to be sent for execution. The PO should be
in state "RELEASE".
• RELEASE – The WO enters in state "Release"
when physical consumed batch of materials enters
in state "Reserved".
• PROD or InProcess – The WO accepts state "In
Process" when the first batch of consumed physical
materials enters instate "InProcess".
• FINISHED – The WO enters in state "Finished"
when the last batch of physical material produced
and consumed goes into state "Finished". When the
WO is the last one for a PO, the PO changes its
state to "Finished". The PO is archived for
subsequent reports and analyzes.
• STOP – The WO passes at a standstill, when a task
is stopped. [10]
The following Key Performance Indicators will be
presented for the purpose of Software Industry:
A) Temporal Key Performance Indicators
for Production Order
Time to accept PO for planning (TAPO) [hr] =
EnterACK - DateCreated
This indicator shows the time span between the date
of creation of the Production Order and the time
that the Production Order is accepted
(ACKNOWLEDGED) for Planning.
Time to schedule a PO (SPO) [hr] = EnterEXE -
EnterACK
Shows the time span for planning the Production
Order up to the time it is sent for execution.
Planned Order duration PO (POT) [hr] = Process Time (PCT, BAZ) = SUM (LOT
ExpectedEndDate –Expected StartDate
Shows the scheduled time span for execution of
Production Order.
Execution time (TPT) [hr] = ActualEndTime -
ActualStartTime
Shows the actual time span for execution of the
Production Order.
PO OTIF = RecommendedFinishDate -
ActualEndTime
Shows the Production Orders delivered on time (if
possitive).
PO Standard Busy Time (pBT) = SUM (WO
Standard Busy Time)
It is calculated as a sum of Standard Busy Times of
the Work Orders included in the Production Orders.
PO Busy Time (eBT) = SUM (WO Busy Time)
It is calculated as a sum of Actual Busy Times of
the Work Orders included in the Production Orders.
Process Time (PCT, BAZ) = BT – DeT SUM (WO
TimeInProcess)
It is calculated as a difference between Busy
Time and the Delays of all Work Orders.
Delay Time (DeT, SU) = SUM (WO Preparation
Time)
The Delay Time is the sum of the preparation times
of all Work Orders
Down Time (DoT, SZ) = SUM (WO DownTime)
Shows the sum of Downtimes in one Production
Order
B) Temporal Key Performance Indicators
for Work Order
WO Standard Busy Time (pBT) = SUM (LOT
StdTime)
Shows the sum of Standard Times for production of
lot (in Software Industry a lot may be a document or
a program code).
WO Busy Time ( eBT) = SUM (LOT Split Consumed
Time)
Shows the sum of times for consuming a lot
(reading a specification or a design document)
WO Transport and Waiting Time (TT) = first Lot
(EnterAvailable – EnterRelease)
Shows the time between the finalization of a lot
(preparation of a document or a program) to its
approval. Includes the meetings and discussions.
TimeInProcess) It is calculated as a sum of times
for processing a lot.
WO Delay Time (DeT, SU) = WO EnterFinished -
WO LatestEndTime
The Delay Time of Work Orders is calculated as a
difference between the times of finishing a task
(WO) and the scheduled latest end time for this
task.
WO Down Time (DoT, SZ)
It is calculated as a sum of the durations of all
Downtimes
C) Key Performance Indicators by Order
Efficiency = SUM (Standard Time/Split Consumed
Time)
Efficiency is calculated as a sum of ratios between
Standard Time for “consuming” a lot and the Actual
Time for it.
Reworks = SUM (Reworks)
It is an important indicator, showing the sum of the
durations of reworked lots (i.e. bug found and sent
back for development or unclear specification, etc.).
PO Allocation Degree = BT (Busy
Time)/TPT(Execution (Lead) Time)[%]
It is calculated as a ratio between the actual Busy
Time for a Production Order and the Lead Time (the
time between receiving the order up to its
finishing). The Allocation Degree is an important
indicator, showing the “density” of the process and
the load of every workplace.
PO Throughput = PQ (Produced Quantity) / TPT
(Execution Time) [units/hour]
The Throughput is a major indicator that shows the
ratio between produced units (documents,
programs, etc.) and the Execution Time. The
tracking of this indicator may lead to correction of
the standard times for execution of a product
(version, release, etc.)
Operational Time (OT) = SUM (Shift Time) Shift
Duration
This indicator represents the operational time in
which the employees can be used.
Planned Allocation Time (PBT) = OT – planned
stops (Total Expected Stoppages)
It is calculated as a difference of the Operational
Time and the sum of all planned stoppages (i.e.
lunch breaks, office administration work, etc.). This
is the time that can be used for execution of tasks.
Busy Time (BT) = PBT – SUM (downtimes with
mainType = SetUp and subtype != Installation II
Configuration (preparation times))
It is calculated as a difference between Planned
Allocation Time and the sum of all Downtimes with
Main Type – Setup and Sub Types that are not
Installation or Configuration (strictly for Software
Industry).
Processing Time= BT – SUM (DownTimes with
Main Type != SetUp)
It is calculated as the difference between the Busy
Time and the sum of Downtimes which Main Type
is not Setup.
Main Usage Time (PDT) = TimeInProcess (PCT)
= PCT – SUM (Setup Times)
It is calculated as a difference between the Time in
Process and the sum of all Setup Times
SetUpTimes (DeT) = SUM (Downtimes with
MainType = SetUp and SubType = Installation &&
Configuration)
It represents the sum of all Downtimes with Main
Type Setup and Sub Type – Installation and
Configuration
D) Key Performance Indicators by
Production Unit (Workplace)
Allocation Efficiency = BT (Busy Time)/ PBT
(Planned Allocation Time) [%]
The allocation efficiency is the ratio between the
real allocation time of a workplace and planned
time for allocating the workplace.
Efficiency = PDT / BT [%]
The efficiency is the portion of the main usage time
of the entire allocation time, thus it is a measure for
the productivity of the workplace. Since only the
operating time is value-adding and is remunerated
by the market, for a company it must be the goal to
increase this portion drastically.
It is calculated as a ratio between Main Usage Time
and Busy Time.
Availability = PDT/PBT [%]
It is calculated as a ratio between Main Usage Time
and Effectiveness = Total Standard Time / Time In
process and Planned Allocation Time
Effectiveness = Total Standard Time / Time In
process
It represents the ratio between Total Standard Time
for execution of some activity and the actual Time
in Process of the Work Order for that activity.
Quality Rate = GQ (Good Quantity Prime MLs) /
PQ (Produced Quantity) [%]
It is calculated as a ratio of the produced lots with
no quality issues and the whole produced lots.
OEE index = Availability*Effectiveness*Quality
Rate [%]
In the conventional manufacturing industry Overall
Equipment Effectiveness (OEE) is a measure for
the efficiency of machines and/or plants,
manufacturing cells with several machines or an
entire assembly line. The OEE Index forms the
basis for improvements by better production
information, identification of production losses,
and improvement of the product quality by
optimized processes.
The OEE Index represents the used availability, the
effectiveness of the production unit, and their
quality rate summarized in a characteristic number.
For the purpose of Software development the OEE
Index will be calculated for each workplace.
Reworking Ratio = Rework Quantity / Produced
Quantity
An important indicator that shows the relevant
reworked quantity of lots is:
Time Utilization = Time In Process / Shift Duration
Actually this is the ratio between the “InProcess”
time spans of all WO and the shift duration.
Standard Time Utilization = Total Standard Time /
Shift Duration
Represents the aim of the performance indicator and
it is calculated as a ratio between the standard time
and the shift duration. [6,10]
4. Conclusions
All these Key Performance Indicators aim
to better visualize the process of software
development by accentuating on temporal and
workplace metrics. Based on these calculations and
measurements, the company management is
responsible to find the opportunities for
improvement and to take the necessary actions to
gain advantages and to update the set goals. For this
purpose, additional embedded Statistical Process
Control (SPC) tools can be used to determine
averages, standard deviations, normal distributions,
correlations, norms, etc. for tasks grouped by
similar characteristics and their calculated KPIs.
each request is estimated by Story Points or other
tangible indexes in terms of size and complexity
and usually measured in man-hours (mhrs). The
request is decomposed to tasks (Work Orders) that
have to be time-estimated by some Standard Time.
This Standard Time may be approximately set by
executing a spectral analysis on a Task backlog (for
requests with similar characteristics). The Lead
Time then can be calculated by using Standard Time
and OEE index (if OEE index is given in %) as:
Lead Time = Standard Time / OEE index / 100
Fig. 5 illustrates some of the described KPIs by
workplace. The first two charts visualize the OEE
index as Normal Distribution and its trend by shift
for a given period of time. The rest two charts
represent performance and quality indicators for the
given period.

Fig. 5. Examples of Software Development KPIs in

MOM4

Using fully operational MES/MOM system, such as

MOM4, where additional custom specific KPIs can
be easily configured and calculated, enables the
adoption of “Management and Control by KPIs”
concept (Metric-driven management), where a
feedback information from the whole software
development process is available and can be used
for goals revision on every workplace
(automatically or manually by the manager),
pinpointing reserves and optimizing the standards in
the company.

An example of using Key Performance Indicators

may be given for calculation of Lead Time for each
task in the scheduling phase, where depending on
the person assigned (Workplace) for a given task,
the Lead Time can vary. In the scheduling phase
 REFERENCES
1. http://computerworld.bg/41567_softuernata_in
dustriya_u_nas_generira_oborot_ot_okolo_750
_mln_lv_godishno
2. Стратегически изисквания на софтуерната
индустрия за реформа на образователната
система, БАСКОМ, 2012
3. ANSI/ISA-95.00.01-2000, Enterprise-Control
System Integration Part 1: Models and
Terminology
4. D. Parmenter, Key Performance Indicators
Developing, Implementing, and Using Winning
KPIs, John Wiley & Sons, Inc., 2007
5. B. Miller, "Key Performance Indicators
Measurement for Web Development,"
CSPreston, 2010.,
6. ISO Standards, IEC/ISO 22400: Automation
systems and integration - Key performance
indicators (KPIs) for manufacturing operations
management
7. H. Kerzner, Project Management Metrics,
KPIs, and Dashboards, A Guide to Measuring
and Monitoring Project Performance, John
Wiley & Sons, Inc., 2011
8. P. Vasilev, WASTE REDUCTION IN THE
SOFTWARE INDUSTRY USING ANSI/ISA-
S95 STANDARD, AUTOMATICS AND
INFORMATICS, prepared to be published
9. http://nearsoft.eu/wp-
content/uploads/2013/09/MOM4Flyer-EN.pdf
10. NearSoft MOM4 Functional Documentation
Authors’ Contacts
Address: University of Chemical
Technology and Metallurgy
Department of Industrial Automation
8 Kl. Ohridski, 1756 Sofia, Bulgaria
E-mail:
PLAMENVASILEV2@GMAIL.COM