Definition of Key Performance Indicators (KPIs)

KPIs are the key performance indicators that provide a quantitative indicator of performance measured over the long term in the context of a specific target.

How could a company be benefited from KPIs?

  1. KPIs measure the degree of success of a company based on the goals that the company has set and intends to achieve.
  2. KPIs can have a financial character and can measure the revenues and expenses of a company.
  3. KPIs also focus on the degree of customer satisfaction and customer loyalty to that company.
  4. KPIs also focus on the operational process of the whole organization.

Characteristics of KPIs

Business managers must constantly monitor the progress of company-wide goals in order to stay competitive. Below the qualities of successful KPIs in a company are presented:

  1. Alignment
  2. Ownership
  3. Predict
  4. Usable
  5. Limited
  1. Easy to understand
  2. Balanced and mutually connected
  3. Activating changes
  4. Formalized
  5. In-context

Differentiations of KPIs

  • Different KPIs will be set between a business and a start-up company
  • Entrepreneurs in the same industry may have set different performance indicators because each of them may have different purpose and goals that want to achieve.
  • KPIs set and monitored by two different individuals from the same organization appear to have differentiations depending on the roles and needs of the individuals who set them
  • The different departments within a company typically set their own performance indicators
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