Key Performance Indicator (KPI)

What is a Key Performance Indicator (KPI)?

A Key Performance Indicator (KPI) is a measurable value that demonstrates how effectively a company is achieving its key business objectives. KPIs are used to evaluate the success of an organization, a particular activity, or an initiative. They can be financial, customer-focused, process-oriented, or growth-related metrics, helping companies track their progress toward specific goals.

Types of KPIs

• Financial KPIs: Metrics such as revenue growth, profit margins, or return on investment (ROI).
• Customer KPIs: Customer satisfaction, retention rates, or Net Promoter Score (NPS).
• Operational KPIs: Measures like production efficiency, cycle time, or quality control.

Related Terms and Concepts

Performance metrics, goal setting, balanced scorecard, business intelligence