ABSTRACT Software development productivity is one of the major and vital aspects that impacts software industry and time to market of many software products. Although many studies have been conducted to improve the productivity measurements within software engineering research domain, productivity is still an issue in current software development industry because not all impacting factors and their relationships are known. This paper sheds a light on some of these factors and assesses their impacts as seen by random sample of industrial software SMEs. It also elaborates the main best practices that help in improve the software productivity based on real industrial projects. The resulting list of factors and best practices can be utilized to guide further productivity analysis and be taken as basis for building improved and more optimized productivity models. Paper also identifies some of the productivity measurements challenges and recommends set of best practices that can be utilized as basis for productivity measurements and estimation models.