Key performance indicator

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Key Performance Indicator (KPI)

Key Performance Indicator (KPI) (/kiː pɜːrˈfɔːrməns ɪnˈdɪkeɪtər/), is a type of performance measurement used to evaluate the success of an organization or of a particular activity in which it engages.

Etymology

The term "Key Performance Indicator" originated in the field of business management, where it was used to measure the performance of different aspects of a business. The term is composed of three words: "Key", which signifies importance; "Performance", which refers to the act of performing or accomplishing a task; and "Indicator", which denotes a thing that indicates the state or level of something.

Definition

A Key Performance Indicator is a measurable value that demonstrates how effectively a company is achieving key business objectives. Organizations use KPIs at multiple levels to evaluate their success at reaching targets.

Types of KPIs

There are two types of KPIs: high-level and low-level. High-level KPIs focus on the overall performance of the enterprise, while low-level KPIs focus on processes in departments such as sales, marketing, HR, support and others.

Related Terms

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