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Key Performance Indicators, commonly referred to as KPIs, are a list of measurements that are identified as critical factors in achieving the organizational goals or mission. KPIs are often identified in a business to help them drive a business towards its success and are associated with a number of business activities like Customer Relationship Management(CRM), Supply Chain Analytics or any other activity that is happening within the organization.

Requirements of a good KPI:

There can be a number of factors related with the success of a company; All of these factors cannot be chosen as the indicators; Only those that are mission critical, strictly adhering to the organizational goals and accurately measurable should be selected as the company’s KPIs. It is always better to keep the number of KPIs to a minimum to make sure that greater focus can be given to each of these indicators. So the important factors to be considered in selecting a KPI are as follows:

  • Measurable: A KPI should be quantifiable in terms of numbers.
  • Reflect the organizational Goals: A KPI should drive a business towards success.
  • Actionable: It should help the managers to initiate some business action as a result of all the analysis and measures lead by KPI.

Examples of KPIs:

A KPI may reflect regional sales by sales person, supply chain statistics by supplier, productivity by units, customer satisfaction, customer growth or it may reflect employee turnover. In either case, it should give a high-level, real time information to the top level managers enabling them to concentrate in the company’s success.

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