KPI-Key Performance Indicator

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A Key Performance Indicator (KPI) is a measurable value that demonstrates how effectively a company is achieving key business objectives. Organizations use KPIs to evaluate their success at reaching targets. Learn more: What is a key performance indicator (KPI)?
Selecting the right KPIs will depend on your industry and which part of the business you are looking to track. Each department will use different KPI types to measure success based on specific business goals and targets. Find out what types of key performance indicators are relevant to your department, industry, or role: Types of KPIs.
Once you’ve selected your key business metrics, you will want to track these KPIs in a real-time reporting tool. KPI tracking can be done using dashboard software, giving your entire organization insights into your current performance.

KPI Best Practices

Measuring and monitoring business performance is critical, but focusing on the wrong key performance indicators can be detrimental. So can be poorly structured KPIs, or KPIs that are too difficult, costly to obtain, or to monitor on a regular basis.
So what makes business performance indicators “key” and how should a business owner, executive or manager select them? There are six factors that separate effective, value creating KPIs from detrimental, value diminishing KPIs. The right KPIs for your business should follow these KPI best practices:
  1. Aligned - Make sure the KPIs your are choosing align with the strategic goals and objectives of your organization. 
  2. Attainable - The KPIs you choose to measure should have data that can be easily obtained.
  3. Acute - KPIs should keep everyone on the same page and moving in the same direction.
  4. Accurate - The data flowing into the KPI should be reliable and accurate.
  5. Actionable - Does the KPI give you insight into the business that is actionable?
  6. Alive - Your business is always growing and changing. Your KPIs should evolve as well.

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