Overview of Key Performance Indicators (KPIs)

KPIs are metrics that an organization can use to monitor their performances. Every KPI should be linked directly to a business goal. If the variables within a metric are performing successfully, a business goal can be attained for a company. Likewise, if certain variables within the metric are not performing successfully, a company may fall short of its business goal. By closely tracking the variables within a KPI, the problem areas can be assessed and targeted, and efficient areas can continue to improve.

The first step to establishing an efficient KPI monitoring process is developing KPIs. After KPIs are developed, they can be tracked and monitored on a continual basis. When developing KPIs, you must focus on:

Developing a set of metrics that reflect the objectives of the company in delivering outputs. These metrics will be aligned with business unit objectives and KPIs within each relevant perspective.
Developing indicators of processes and activities that measure drivers and enablers of performance and point to action.