– key performance indicators.

KPIs can generally be defined as “specific measures of the

performance of an individual, team or department. They reflect critical success or failure that can
be used to understand current performance and better prepare for future performance. KPIs are
usually a metric (number, percentage, scale, etc.) reflecting that status of an entity in a point in
time. An entity in this context can be anything starting from an organisation, a process, a piece of
machinery or any other type of system. In other words, a KPI quantifies the status quo of a
particular thing. It is a metric that helps identify, measure, report and manage key developments.
In business, this is incredibly useful: KPIs reduce the complexity of many different processes and
boil down what is happening into a single number. This can shed light on past developments and
future directions[1].

Benefits of key performance indicators:

1. KPIs help understand complex statuses: There are two things many organizations can
probably agree on: efficiency is crucial, and time is money. KPIs are incredibly useful for
assessing the many intertwining processes and activities going on in organizations. They can
help save time and increase efficiency in management[2].
2. KPIs increase communication efficiency: Communication takes time, particularly in
complex and unpredictable situations. KPIs can boost efficiency in communication. In other
words, when groups share understandings and visions of how to achieve certain tasks, agreeing
on KPIs can boost teamwork, morale and output[2].
3. KPIs provide a sound basis for decision-making: One of the biggest issues in decision-
making is bias. This is particularly evident in the area of management. When properly
formulated, KPIs can help minimise bias and focus on facts and figures. This form of evidence-
based management helps increase the quality of decisions and reduces uncertainty by managing
risks. 
4. KPIs are easy to formulate and devise: KPIs are not complex in themselves they are easy to
create and to “set up”. A brief analysis of the situation at hand is the starting point to creating a
key performance indicator