Key Performance Indicators
The term KPI has become one of the most over-used and little
understood terms in business development and management. In
theory it provides a series of measures against which internal
managers and external investors can judge the business and how
it is likely to perform over the medium and long term. Regrettably
it has become confused with metrics – if we can measure
it, it is a KPI. Against the growing background of noise created
by a welter of such KPI concepts, the true value of the core
KPI becomes lost.
The KPI when properly developed should provide all staff
with clear goals and objectives, coupled with an understanding
of how they relate to the overall success of the organisation.
Published internally and continually referred to, they will
also strengthen shared values and create common goals.
Key Performance Indicators (KPI) are financial and non-financial
measures or metrics used to help an organization define and
evaluate how successful it is, typically in terms of making
progress towards its long-term organizational goals. KPIs can
be specified by answering the question, "What is really
important to different stakeholders?". KPIs may be monitored
using Business Intelligence techniques to assess the present
state of the business and to assist in prescribing a course
of action. The act of monitoring KPIs in real-time is known
as business activity monitoring (BAM). KPIs are frequently used
to "value" difficult to measure activities such as
the benefits of leadership development, engagement, service,
and satisfaction. KPIs are typically tied to an organization's
strategy using concepts or techniques such as the Balanced Scorecard).
The KPIs differ depending on the nature of the organization
and the organization's strategy. They help to evaluate the
progress of an organization towards its vision and long-term
goals, especially toward difficult to quantify knowledge-based
goals.
Source: Wikipedia
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