What is Key Performance Indicator (KPI)?
Key Performance Indicator (KPI) is defined as a measurable value that businesses and organisations use to evaluate and track their progress toward specific goals or objectives. KPIs are important because they provide a clear and quantifiable way to assess the success or performance of a particular aspect of a business. KPIs can vary widely depending on the industry, organisation, and goals, but they should always be:
- Relevant: KPIs should be directly related to the specific goals or objectives of the organisation or a particular project.
- Measurable: KPIs should be quantifiable and based on data or metrics that can be tracked and analysed.
- Time-bound: They should have a defined time frame or period for measurement, allowing for comparison over time.
- Actionable: KPIs should provide meaningful insights that can guide decision-making and actions to improve performances.
Difference between KPI and KRI
Measurement is useful when it is expressed in numerical terms, so as to compare the actual performance and the targeted performance. Moreover, the measurement of both the positive things and negative things is important for the success of the business. For this purpose, KPI and KRI come into the picture. Key Performance Indicator (KPI) is defined as a measurable value that businesses and organisations use to evaluate and track their progress toward specific goals or objectives. Key Risk Indicator (KRI) is defined as the measurable metrics or indicators used by organisations to assess and monitor potential risks and vulnerabilities that could affect the organisationâs performance.
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