In business performance measurement, what does KPI stand for?

In business performance measurement, KPI stands for key performance indicator.

A KPI is a measurable value used to evaluate progress toward a specific organizational objective. A company might track revenue growth, customer retention, delivery time, employee turnover, or website conversion rate as KPIs, depending on its strategy.

The term is broader than a financial result. A KPI can measure an outcome, such as profit, or an activity that supports an outcome, such as the percentage of orders shipped on time. Effective KPIs are linked to goals and reviewed over a defined period.

A common mix-up is treating every business metric as a KPI. Metrics become key performance indicators only when an organization considers them especially important for decision-making. The related term KRI, or key risk indicator, focuses instead on warning signs of increasing risk.