A key performance indicator (KPI) is a number a business tracks to see whether it is meeting a goal. Managers choose different KPIs depending on the company’s mission, industry, and strategy. Finance might watch profit or cash flow. Marketing might watch customer acquisition cost or market share. Operations might watch on-time delivery or per-unit cost. A KPI only helps when someone compares it to a target or benchmark and then acts.

Related Lessons:

• Click Here for our lesson on Operations and Supply Chain Management
• Click Here for our lesson on How To Check a Business’s Financial Health
• Click Here for our lesson on Build Your First Marketing Plan