Editing Performance indicator (section)

==Identifying indicators==
Performance indicators differ from business drivers and aims (or goals). A school might consider the failure rate of its students as a key performance indicator which might help the school understand its position in the educational community, whereas a business might consider the percentage of income from returning customers as a potential KPI.

The key stages in identifying KPIs are:
* Having a pre-defined business process (BP).
* Having requirements for the BPs.
* Having a quantitative/qualitative measurement of the results and comparison with set goals.
* Investigating variances and tweaking processes or resources to achieve short-term goals.

Key performance indicators (KPIs) are ways to periodically assess the performances of organizations, business units, and their division, departments and employees. Accordingly, KPIs are most commonly defined in a way that is understandable, meaningful, and measurable. They are rarely defined in such a way that their fulfillment would be hampered by factors seen as non-controllable by the organizations or individuals responsible. Such KPIs are usually ignored by organizations.{{Citation needed|date=October 2010}}

KPIs should follow the [[SMART criteria]]. This means the measure has a specific purpose for the business, it is measurable to really get a value of the KPI, the defined norms have to be achievable, the improvement of a KPI has to be relevant to the success of the organization, and finally it must be time phased, which means the value or outcomes are shown for a predefined and relevant period.<ref name=":0" />

KPIs should be set at a senior level within an organization and cascaded through all levels of management.<ref name=eck>Eckerson, W., [https://www.bpmpartners.com/2016/07/17/characteristics-of-a-good-kpi Ten Characteristics of a Good KPI], ''BPM Partners'', published 17 July 2016, accessed 24 November 2022</ref> In order to be evaluated, KPIs are linked to target values, so that the value of the measure can be assessed as meeting expectations or not.

Key performance indicators are mostly the non-financial measures of a company's performance <ref name=eck /> – they do not have a monetary value but in a business context they do contribute to the company's profitability.<ref>{{cite book |last1=Palffy |first1=Georgina |title=How Business Works |publisher=DK Publishing |isbn=978-1-46542-979-7 |page=146 |edition=1st |date=2015-04-14 }}</ref>