Key Performance Indicator (KPI)

A Key Performance Indicator (KPI) is a measurable value that demonstrates how effectively a company, organization, team, or individual is achieving key business objectives. KPIs are used to evaluate success at reaching targets and are crucial in helping organizations assess their progress toward predefined goals.

KPIs vary between companies and industries, depending on their priorities or performance criteria. For instance, a business might measure growth through revenue or market share, while a non-profit organization might consider the number of people helped. Characteristics of a good KPI include being clear, relevant, quantifiable, and directly linked to strategic objectives.

KPIs can be high-level, focusing on the overall performance of the business, or low-level, focusing on processes in departments such as sales, marketing, HR, support, and others. Regular monitoring of these indicators helps in strategic decision-making and in steering the organization towards fulfilling its long-term goals. Effective use of KPIs is a cornerstone of business analytics and performance management.