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You are here: Home / Definitions / K / Key Performance Indicator (KPI)

Key Performance Indicator (KPI)

Key Performance Indicators (KPI) are often referred to in the world of consultants, sometimes they are used as typical buzzwords in almost every industry. Using the term “buzzword” means that, while KPIs are important, project managers should make sure that their KPIs measure metrics that reflect the project’s progress towards a successful closure and not only those metrics that are easy to obtain.

KPIs, not only in project management, are used to measure the performance of a specific parameter in a company or a system, and because of their importance, they are key indicators. If you want to drive from New York City to San Francisco, then speed obviously is a KPI whereas the HP is not.

A KPI should not be misinterpreted to be the same as a goal. A goal is where you want to go, and a KPI tells you where you are towards that goal. An example of the world of project management: The To-Complete Performance Index is a KPI as it reflects the efficiency in terms of cost that is required to meet the constraints by the end of the project.

Further information is provided in this article about the importance of defining goals and KPIs on our blog.

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