As Peter Drucker famously said, “What gets measured gets done.”
The definition of KPI from few sources are as below:
- Oxford’s Dictionary definition of KPI: A quantifiable measure used to evaluate the success of an organization, employee, etc. in meeting objectives for performance.
- Investopedia’s definition of KPI: A set of quantifiable measures that a company uses to gauge its performance over time.
- Macmillan’s Dictionary definition of KPI: A way of measuring the effectiveness of an organization and its progress towards achieving its goals.
- Wikipedia: is a type of performance measurement. KPIs evaluate the success of an organization or of a particular activity (such as projects, programs, products and other initiatives) in which it engages.
A Key Performance Indicator is a measurable value that demonstrates how effectively a company is achieving key business objectives.
Organizations use KPIs at multiple levels to evaluate their success at reaching targets:
- High-level KPIs may focus on the overall performance of the business,
- while low-level KPIs may focus on processes in departments such as sales, marketing, HR, support, and others.
Few examples of KPI are as below:
Accounts
- Percentage of overdue invoices
- Percentage of purchase orders raised in advance
- Number of retrospectively raised purchase orders
- Finance report error rate (measures the quality of the report)
- Average cycle time of workflow
- Number of duplicate payments
Customer KPIs
- Number of Customers Retained
- Percentage of Market Share
- Net Promotor Score
- Average Ticket/Support Resolution Time
- Call Handling Time
- Average Response Time
- Peak Call Time Traffic
- Average On-Hold Time
- Customer Service Agent Utilization
Financial KPIs
- Growth in Revenue
- Net Profit Margin
- Gross Profit Margin
- Operational Cash Flow
- Current Accounts Receivable
- Inventory Turnover
- EBITDA
- Stock Value
- Days in Accounts Receivable
- Quick Ratio/Acid Test
- Debt-to-Equity Ratio
- Accounts Payable Turnover
- Accounts Receivable Turnover
- Cost of Goods Sold
Human Resource KPIs
- Organization Headcount
- Average Number of Job Vacancies
- Applications Received Per Job Vacancy
- Job Offer Acceptance Rate
- Cost Per New Hire
- Average Salary
- Average Employee Satisfaction
- Employee Turnover Rate
- New Hire Training Effectiveness
- Involuntary Turnover Rate
- Employee Engagement Rate
Healthcare KPIs
- Bed or Room Turnover
- Average Patient Wait Time
- Average Treatment Charge
- Average Insurance Claim Cost
- Medical Error Rate
- Patient-to-Staff Ratio
- Medication Errors
- Average Emergency Room Wait Times
- Average Insurance Processing Time
- Billing Code Error Rates
- Average Hospital Stay
- Patient Satisfaction Rate
Marketing KPIs
- Monthly Website Traffic
- Number of Qualified Leads
- Conversion Rate for Call-To-Action Content
- Keywords in Top 10 Search Engine Results
- Blog Articles Published This Month
- E-Books Published This Month
- Marketing Qualified Leads Acquired (MQL)
- Sales Qualified Leads Acquired (SQL)
- Customer Acquisition Cost
- Advertising Cost Per Thousand Impressions (CPM)
- Advertising Cost Per Click (CPC)
- Return on Marketing Investment (ROI)
- Average Funnel Conversion Rate
- Number of Earned Media Placements Gained
Manufacturing
- OEE = availability x performance x quality
- Availability = run time / total time, by definition this is the percentage of the actual amount of production time the machine is running to the production time the machine is available.
- Performance = total count / target counter, by definition this is the percentage of total parts produced on the machine to the production rate of machine.
- Quality = good count / total count, by definition, this is the percentage of good parts out of the total parts produced on the machine.
- Cycle time ratio (CTR) = standard cycle time / real cycle time
- Capacity utilization
- Rejection rate
Professional Services
- Utilization rate = the percentage of time employees spend generating revenue
- Project profitability = the difference between the revenue generated by a project and the cost of delivering the work
- Project success rate = the percentage of projects delivered on time and under budget
Project execution
- Earned value
- Cost variance
- Schedule variance
- Estimate to complete
- Manpower spent / month
- Money spent / month
- Planned spend / month
- Planned manpower / month
- Average time to delivery
- Tasks / staff
- Project overhead / ROI
- Planned delivery date vs actual delivery date
Supply Chain KPIs
- Number of On-Time Deliveries
- Inventory Carry Rate
- Months of Supply On Hand
- Inventory-to-Sales Ratio (ISR)
- Carrying Cost of Inventory
- Inventory Turnover Rate
- Perfect Order Rate
- Inventory Accuracy
- Fill Rate
- Inventory Days of Supply
- Freight Bill Accuracy
- Freight Cost Per Unit
- Inventory Velocity
Social Media KPIs
- Average Engagement
- % Growth in Following
- Traffic Conversions
- Social Interactions
- Website Traffic from Social Media
- Number of Post Shares
- Social Visitor Conversion Rates
- Mentions
- Issues Resolved Using Social Channels
Sales KPIs
- Number of New Contracts Signed
- Dollar Value for New Contracts
- Number of Engaged Qualified
- Hours of Resources Spent on
- Average Time for Conversion
- Net Sales – Dollar or Percentage
- Customer Lifetime Value
- New and Expansion Monthly
- Number of Sales Calls Held
- Number of Sales Calls Scheduled
- Number of Customers Onboarded
- Number of Sales Calls per Representative
- Average Purchase Value
- Sales by Department
- Same Store Sales Growth
- Sales Per Area – Geography
- Sales Per Area – Square Feet
- Average Purchase Value
System operations
- Availability / uptime
- Mean time between failure
- Mean time to repair
- Unplanned availability
- Average time to repair