Key Performance Indicators (KPIs)






Business metrics that are used by corporate executives and managers in order to track and analyze factors that are deemed crucial to an organization’s success is called as Key Performance Indicators or KPIs. An effective KPI is said to focus on the processes and functions of a business that senior management sees as most important for measuring progress towards meeting performance targets and strategic goals.
It differs from one organization to another based on the priorities of a business. For instance, one of the KPIs for a public company would likely be its stock price whereas for a privately held startup, the KPI may be the number of new customers added to each quarter. Even the direct competitors in an industry can monitor the KPIs which are tailored according to their individual business strategies and management philosophies.

The significance of KPIs is that it shows how well a business is performing. Without this metric, it would have been difficult to evaluate the performance in a meaningful way by the company’s leaders and also to make certain operational changes which address problems related to the business’ performance. Reinforcing the importance and value of activities performed by employees to achieve organizational success is highlighted. Also, it can point out future outcomes by giving early warnings or possible business problems to executives or even give guidance on opportunities in advance to maximize return on investment.


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