Need of KPI for business

Hello guys,

If you are working for any industry all across the globe, I am sure that the main target of any organization to generate revenue.  To measure the performance of an organization we need few benchmark or factors on the basis of which we can identify the health of business. A KPI is quantifiable and measureable unit to measure the health of business.


  • Stands for Key Performance Indicator
  • It is a quantifiable measurement to measure and analyze the performance or health of your business
  • It is Critical Performance Indicator
  • It indicates that the strategy we chose are in right path to achieve your organization goal

Why do we need a KPI?

  • KPI will be aligned with your strategic business goal.
  • Result will show the progress and success of business strategies defined
  • Carry out business analysis and help us to gain knowledge by taking decision for the benefit of our organization
  • KPI is also used for Competitive Analysis
  • It helps us to focus on business actions on strategic goals
  • Through these Indicators you can measure success rather than result.
  • Will help you to take decision based on the KPI

How to choose effective KPI?

Below are few benchmarks/factors which will help you to decide your KPI for your business.

  • You should Adapt KPI as per your business need and strategic goals
  • You should be able to measure strategic success through KPI
  • KPI should be transparent across the organization
  • Should be measureable, relevant and easy to interpret
  • Should bring overall benefit to your business
  • Should answer your questions regarding your business (growth)
  • We should be able to make analysis on the KPI

How to define KPI?

Below steps we must consider in mind before defining the KPI for your business:

  • Strategic Goals/ Success Indicator: Identify critical success factors and actions and set a target for your business.
  • Measurement Period: There must a measurement period to review health of your business based on KPI
  • Measurement Unit: Unit of measurement must be along with benchmark value/figure
  • Result Interpretation: It should be Readable, Standardized and Relevant

Looking for your feedback.


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