Ameasurablevaluethat shows how well a business is fulfilling key business goals is called a Key Performance Indicator (KPI). KPIs serve as the basis for operational and strategic improvement, providing an analytical foundation for decision-making and assisting in focusing attention on the most important issues. Businesses apply KPIs at many levels to assess their progress toward their goals.
KPIs are considered as a set of quantifiable measurements used to assess a company’s overall long-term performance. Low-level KPIs could focus on procedures in departments such as human resources, sales, support, marketing, and others, whereas high-level KPIs could focus upon the overall success of the business.
KPIs are used to determine a company’s operational, strategic, and financial accomplishments, particularly in comparison to those of other companies in the same industry.KPIs vary by company and industry and are based on performance priorities or criteria. KPIs should be set and tracked based on the specificity of a company’s goals, as some KPIs support certain goals while may be irrelevant for others.
Profit margins and revenue are usually the focus of financial key performance indicators. Per-customer efficiency, customer happiness, and customer happiness are common customer-focused KPIs. Lastly, process metrics are used to track and measure operational performance within a company.
A good KPI…
- Allows you to track your progress over time.
- Makes it easier to make better informed decisions.
- Shows accurate and clear data on performance toward a specific goal.