Friday, February 5, 2010
A performance indicator or key performance indicator (KPI) is a gauge of performance. Such measures are generally used to help an organization define and assess how successful it is, typically in terms of making progress towards its long-term directorial goals. KPIs can be specified by answering the question, "What is a really important to different stakeholder?" KPIs may be monitored using Business Intelligence techniques to assess the present state of the business and to assist in prescribing a course of action. The act of monitoring KPIs in real-time is known as business activity monitoring (BAM). KPIs are frequently used to "value" difficult to measure activities such as the benefits of leadership development, appointment, service, and satisfaction. KPIs are typically tied to an organization's strategy using concepts or techniques such as the Balanced Scorecard.The KPIs differ depending on the nature of the association and the organization's strategy. They help to evaluate the progress of an organization towards its vision and long-term goals; especially toward difficult to quantify knowledge-based goals. A KPI is a key part of a measurable objective, which is made up of a direction, KPI, benchmark, target, and time frame. For example: "Increase Average Revenue per Customer from £10 to £15 by EOY 2008". In this case, 'Average Revenue per Customer' is the KPI.
KPIs should not be confused with a Critical Success Factor. For the example above, a critical success factor would be something that needs to be in place to achieve that objective; for example, an attractive new product.
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@ 4:28 AM
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