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Key Performance Indicator (KPI)

Key Performance Indicator (KPI) is a measurable value that demonstrates how effectively a company or organization is achieving key business objectives.

KPIs are used at multiple levels to evaluate the success of reaching targets. 

  • Performance Measurement: KPIs help businesses measure progress towards their strategic and operational goals. By tracking KPIs, companies can gauge their performance and make informed decisions.

  • Specific and Quantifiable Metrics: KPIs are specific metrics that are ideally quantifiable, making them effective tools for measuring success against predefined criteria.

  • Vary by Industry and Department: Different industries and departments within a company will have different KPIs. For example, a sales department might track monthly sales growth, while a customer service team might measure average call handling time.

  • Alignment with Business Goals: Effective KPIs are closely aligned with the organization's strategic goals and objectives. They should be relevant, clear, and contribute to overall business success.

  • Types of KPIs: There are different types of KPIs, including financial indicators (like revenue growth rate), customer indicators (like customer satisfaction scores), process indicators (like production efficiency), and people indicators (like employee turnover rate).

KPIs are essential tools for business management, providing a clear focus for strategic and operational improvement and a measurable means to gauge the effectiveness of implemented strategies.

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