Key performance indicator

Key Performance Indicator (often abbreviated as KPI) is a type of performance measurement that evaluates the success of an organization or of a particular activity in which it engages.

Definition

A Key Performance Indicator (KPI) is a measurable value that demonstrates how effectively a company is achieving key business objectives. Organizations use KPIs at multiple levels to evaluate their success at reaching targets. High-level KPIs may focus on the overall performance of the enterprise, while low-level KPIs may focus on processes in departments such as sales, marketing, HR, support and others.

Types of KPIs

There are two types of KPIs: high-level and low-level. High-level KPIs focus on the overall performance of the enterprise, while low-level KPIs focus on performance in departments such as sales, marketing, HR, support and others.

Importance of KPIs

KPIs are important in business as they provide an objective measure of progress towards a defined goal. They provide a focus for strategic and operational improvement, create an analytical basis for decision making and help focus attention on what matters most.

See Also

• Performance Indicator
• Business Metrics
• Business Intelligence
• Management Information System