Key Performance Indicators

Topics: Management, Strategic management, Performance management Pages: 3 (1045 words) Published: January 21, 2014
KPIs – The Metrics that Drive Performance Management
Although selection of the appropriate visuals and graphs contribute to the effectiveness of a business performance management (BPM) dashboard, the true "soul" of the dashboard is the key performance indicators (KPIs). KPIs measure the business health of the enterprise and ensure that all individuals at all levels are "marching in step" to the same goals and strategies. They also provide the focal point for enterprise-wide standardization, collaboration and coordination. In this column and in subsequent months, we will discuss the important role of KPIs in the performance management process, provide guidelines for choosing the most appropriate and meaningful KPIs, and leverage Six Sigma techniques to facilitate KPI development and prioritization. A key performance indicator (KPI) is a business metric used to evaluate factors that are crucial to the success of an organization. KPIs differ per organization; business KPIs may be net revenue or a customer loyalty metric, while government might consider unemployment rates.

HPIs Definitions
KPIs are applied in business intelligence (BI) to gauge business trends and advise tactical courses of action. Before KPIs can be identified, the following requirements must be met:

A predefined organizational process.
Clear business objectives for the process.
Quantitative and qualitative measurements.
An active approach to finding and remedying enterprise variances. KPIs are above all else, a set of indicators to measure data against, a sort-of enterprise success gauge. Ultimately, they help an organization assess progress toward declared goals.

Indicators include quantitative metrics such as process tracking and progress measurement.

What is a KPI?
Wikipedia states that “KPIs are commonly used by an organization to evaluate its success or the success of a particular activity in which it is engaged. Sometimes success is defined in terms of making progress toward...
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