Importance of Key Performance Indicators

Save

Key performance indicators (KPI) are "critical success factors" that are crucial for the continued success of a business or any organization, according to Rémy de Bernardy's visitask.com. Sales revenue is almost always one of the main KPI variables.

Significance

  • Key performance indicators must be aligned with the specific goals and objectives of an organization. For example, a large university would likely consider the number of students who graduate one of its primary KPIs.

Function

  • A key performance indicator must be quantifiable. The goal must be stated in concise terms and capable of being measured. A time frame must also be established for all key performance indicators, with key checkpoints at various intervals.

Types

  • Companies or organizations usually create key performance indicators for the various departments within their establishment. For example, overdue accounts may be a KPI for the finance department, while market share is a more germane KPI for marketing.

Other Types

  • Other types of key performance indicators are productivity among workers, customer satisfaction, lead conversion rates, stock performance, employee turnover, budget performance and virtually any other variable that is crucial to the organization's success.

Benefits

  • The main benefit of keeping tabs on key performance indicators is that it keeps the entire organization working toward common goals. People work only on meaningful projects and eliminate useless activity. A company is also more likely to accomplish its objectives if it has clearly defined them.

References

  • Photo Credit Jupiterimages/Creatas/Getty Images
Promoted By Zergnet

Comments

Resources

You May Also Like

  • Why a Performance Management System Is Important

    Managing employees’ performance can increase an organization’s competitiveness and maximize its productivity. Not only that, it can also increase morale and create...

  • How to Monitor Internal Controls

    Internal controls are an important consideration in business success. This is especially so when the economy is in a recession. While internal...

  • How to Track KPI

    Key performance indicators (KPI), series of data, tell a story by measuring performance of processes within a firm. The tracking of a...

  • How to Implement KPI

    Maximizing performance is a critical factor in a company seeking an edge over its competition. KPI is one way in which a...

  • The Best Key Performance Indicators

    Running any organization is a complex undertaking. Success depends on recognizing and then measuring the simpler tasks that make up the whole....

  • KPI Procedures

    In business, what gets measured gets done. Key performance indicators (KPIs) help a team, department or organization focus on important success factors....

Related Searches

Check It Out

Are You Really Getting A Deal From Discount Stores?

M
Is DIY in your DNA? Become part of our maker community.
Submit Your Work!