What is a KPI (Key performance Indicator)?

Understanding Key Performance Indicators (KPIs) in Simple Terms

KPIs, or Key Performance Indicators, serve as the guiding star for your organization when it comes to measuring and improving performance. They originate from the long-term goals formulated on the basis of your strategy.

However, to ensure that the goals are actionable, we apply the SMART criteria.

Specific: Is the goal defined explicitly? Who is participating, what needs to be achieved, and for what reason? Quantifiable – How many exactly?

Measurable: Can we assess it? What exactly is it, and how would we measure it?

Acceptable: Is the target suitable for everyone and accepted by all appropriate?

Realistic: Can this be achieved? What is the value of how we accomplish it?

Time-bound: Within what time will we finally complete our objectives? How would we get it?

KPIs are the yardstick or the measure of your targets. To help put this measure into context, KPIs allow you to determine if the entire organization is hitting its strategic goals. Here are some key features to remember:

• They must always link to your organization’s mission, vision, or objectives.
• They must also be SMART, or specific, measurable, acceptable or achievable, realistic, and time-bound.
• Each KPI should have a base, plan, and target.
• They have to be credible and owned.
• Now, let’s clear up a common question. Finally, do you know the distinction between a KPI and a Critical to Quality metric?
• KPI is a connection to your company’s high development aspirations, Vision and Mission, and goals.
• CTQ is connected to meeting and satisfying the customer.

By understanding these two, your company will benefit from a balanced strategy that will advance your business and concentrate on the administration and your clients.