Key Performance Indicator

What is the Key Performance Indicator?

Key Performance Indicator (KPI) – Performance measurement that stems from your primary metric or what is most important to a particular business’s success. For example, conversions and cost-per-acquisition can be popular KPIs for many PPC advertisers.

A Key Performance Indicator 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 business, while low-level KPIs may focus on processes in departments such as sales, marketing, HR, support and others.

KPI is the critical (key) indicators of progress toward an intended result. KPIs provide a focus for strategic and operational improvement, create an analytical basis for decision making and help focus attention on what matters most.

Managing with the use of KPIs includes setting targets (the desired level of performance) and tracking progress against that target. Managing with KPIs often means working to improve leading indicators that will later drive lagging benefits. Leading indicators are precursors of future success; lagging indicators show how successful the organization was at achieving results in the past.
Good Key Performance Indicator :

• Provide objective evidence of progress towards achieving the desired result
• Measure what is intended to be measured to help inform better decision making
• Offer a comparison that gauges the degree of performance change over time
• Can track efficiency, effectiveness, quality, timeliness, governance, compliance, behaviors, economics, project performance, personnel performance or resource utilization
• Are balanced between leading and lagging indicators

Conclusion

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Refer: KPI.ORG