Why are key performance indicators vital signs that clearly display whether your business is performing or failing? Key performance indicators (KPIs) are the gauges on the dashboard of your business. They provide the information necessary to identify changes or problems that can impact the business’s performance.
Key performance indicators are quantifiable measurements which should reflect the critical success factors of your business. Many facets of your business are measurable; however, because an area can be measured does not define that specific area as a KPI.
Areas can be delineated as KPIs if, and only if, they qualify as having the single most important attribute of a KPI—they can be directly linked to the success of the organization. It may be necessary to limit the number of KPIs in order to ensure that everyone within the organization remains focused on achieving the same goals and objectives. There are established industry-specific KPIs which are designed to provide leading information pertaining to operational performance and capacity utilization.
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