KPI
Definition
A KPI (key performance indicator) is a metric an organization has agreed to watch as evidence of whether a specific part of the business is healthy. What separates a KPI from an ordinary number is the agreement around it: a KPI has a named owner, a target, a fixed review rhythm, and an expectation that someone acts when it moves the wrong way.
KPIs attach to a function or a role rather than to a project, which is why they outlive any single quarter. Most companies carry somewhere between five and fifteen at company level, each with an owner, a source system, and a stated review cadence. The definition has to be precise enough that two people calculating it separately land on the same figure — 'active customers' means very little until someone writes down whether trials count and what happens to accounts that paused.
The usual failure is accumulation. Indicators get added whenever something goes wrong and almost never removed once it is fixed, so a review that started with eight numbers carries forty within two years and nobody can say which three would actually change a decision. A number that would produce no action at any value is a statistic, not an indicator.
Example
A support function tracks four KPIs weekly: median first-response time (target under 2h, actual 3.4h), resolution within 24 hours (target 85%, actual 71%), CSAT (target 4.5, actual 4.3), and tickets per 100 accounts (target 12, actual 18).
See also: scorecard software