What do key performance indicators (KPIs) measure in an organization?

Key performance indicators (KPIs) are specifically designed to measure the effectiveness and success of an organization or particular activities within it. They provide quantifiable metrics that help organizations assess their performance against strategic objectives and key goals. By evaluating these indicators, organizations can determine how well they are doing in various areas, which can include financial performance, operational efficiency, customer satisfaction, and other critical success factors.

In this context, measuring success through KPIs allows organizations to make informed decisions based on data, align resources effectively, and set actionable targets for improvement. It encompasses a broader perspective beyond just financial metrics or specific aspects like customer satisfaction or supplier engagement. Thus, while other options may touch on aspects of performance, only measuring the overall success through identified KPIs captures the full scope of what these indicators are intended to analyze.