In software development, lead time is a measure of how long it will take a team to produce a new feature from the time the request is made (when it enters the backlog) to the time it ships.
This metric is helpful to the team and company leadership to get an idea of when a new feature request might ship. Lead times are calculated on a feature-by-feature basis and then averaged out among all features over a given time period. Thus, the term lead time is often used when referring to average lead time.
While lead time is sometimes used synonymously with cycle time, the two terms have important differences:
- Lead time measures how long a customer will typically have to wait for a feature, if the feature doesn’t receive special priority. Lead times are often highly correlated with customer satisfaction (why else do the sales and customer experience teams beg for special priority?). So, it is in an organization’s best interest to reduce lead times.
- Cycle time is a measure of the work-in-process, or WIP, time of a feature. It measures how long a feature takes to ship once work is started. Cycle time is helpful in identifying bottlenecks in the development cycle by looking at features that are outliers, time-wise. Reducing cycle time in turn reduces lead time.