A KPI or Key Performance Indicator is a metric that helps evaluate the progress of a business against the various goals and objectives that it has set for itself. KPIs are used not only at the highest levels measuring the overall performance of the business but also at the departmental levels such as sales, HR, finance, etc. KPIs may differ based on the nature of the business or even the function that it is assigned to. A lot of times companies seem to believe that there is a failure in the functions performed by their company because of a low KPI value however this may very well be due to the wrong choice of KPIs which are crucial in arriving at the right conclusions and improving performance.
How to identify the right KPIs
- Ensure that your KPIs and Business Goals work in tandem
- The word “Key” is Key when choosing KPIs
- Consider the Business Life Cycle
- Recognize both lagging and leading performance indicators.