Business KPI: What Is It?
Business KPI is yet another one of many terms characteristic of business jargon. Business jargon is often a foreign language to anyone on the “outside,” but the exact meaning can even vary among companies or individuals. Sometimes a term refers to a broad category or concept that everyone understands and recognizes, while the specific details or aspects under that category differ, depending on to whom you talk. Because the world of business is often relevant to people on the outside because of things like investment decisions, it is to everyone’s benefit to learn more about the terms that are most common.
The Basics of Business KPI
Business KPI specifically refers to Key Performance Indicators, which are essentially measures of how well a company is performing. However, what is interesting and unique about KPI is that these indicators can vary from company to company, depending on what the executives and company president feel best report their performance. The selection of the KPI generally stems from the company’s main business goals and their key drivers, which are the components of the company that have the greatest impact on success or performance.
Business KPI can be customer turnover in companies like restaurants, employee turnover in companies that have a goal of being the best employer, customer satisfaction, etc. Although companies can have broad KPI, like customer satisfaction, that refer to the company as a whole, many companies choose to break this overall KPI down into smaller KPI for each individual department in order to better monitor progress and effect change.
Business KPI is obviously of utmost importance to the companies because it is a reflection on how well they are succeeding with their particular business goal. However, the KPI can also be meaningful to a consumer or investor because it reveals what a company focuses on, what they believe is important, and what their primary emphasis is.
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