What are Key Performance Indicators (KPI)?

by Investing School on January 10, 2011

The term “Key Performance Indicators”, also known either as “KPI” or “KSI” for “Key Success Indicators” refers to specific indicators that can be used by a business organization in order to determine and quantify its advancement toward the company goals and aspirations. A business with a clearly delineated mission, identified stakeholders, and goals must be able to measure its progress, and KPIs are the best way to manage this task.

Key Performance Indicators need to be quantifiable measurements that are determined in advance, and they may differ from organization to organization. For example, a business may have as a KPI the percent of its annual income that is generated through repeat customers. On the other hand, a school may have the graduation rate of students as a KPI. Regardless of the KPIs selected for an organization, they need to reflect its goals, they need to be inherent to its success, and they need to be measurable. Most KPIs are longer term results that do not change frequently.

However, if a KPI is actually going to be of value, it needs to be something that can be accurately measured. It is likewise important that KPIs remain the same over time, because otherwise it is almost impossible to determine success from year to year. With the correct set of KPIs a company will be well-positioned to get a good overview of how it is performing within its own parameters for success and growth.

Promote or Save This Article

If you like this article, please consider bookmarking or helping us promote it!

Print It | Email This | Del.icio.us | Stumble it! | Reddit |

Related Posts

{ 0 comments… add one now }

Leave a Comment

Previous post:

Next post: