Many people in the marketing carrier,for example employees, executives, or business owners, must know the term “KPI”. Yet some people still don’t know and don’t understand the true meaning of KPI. What is KPI? Why is it so important in business? Today, AFbrother will help you understand the meaning of KPI.
KPI stands for “Key Performance Indicator”.
– Key: main point, main topic or main goal
– Performance: Efficiency, effectiveness, of the outcome.
– Indicator: Unit of measurement for performance
The definition of a KPI, or a key performance indicator, is “a measurable value used to evaluate how successful a person or organization is at reaching a target.” This can also improve the operational efficiency of the organization as well, therefore KPIs are very important to the organization.
In most companies, KPIs are automatically tracked via business analytics and reporting tools that collect relevant data from operational systems and create reports on the measured performance levels.However, in order to make KPIs effective, the performance indicator criteria should be appropriate. The data it produces should clearly show the results of a particular plan, employee or product. A good KPI should use data that is quantifiable, readily available, and should reflect the mission of the organization’s goals. Depending on what is being assessed, the data can be changed to review different job roles, the development of employees and determine if they are suitable for that position. For example, sales department may set a KPI based on the of revenue or number of sales where as customer service may measure KPIs via customer satisfaction questionnaires after interactions.
KPIs are one of the most widely used forms of measurement in a business. Companies understand that these are used to evaluate personnel and products and strategies. The information produced will not only help develop your business and employees but can show the potential of the organization as well as the path forwards.
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