Definition
A Key Performance Indicator KPI is a measurable value that demonstrates how effectively a company or project is achieving key business objectives. KPIs are used to evaluate the success of an organization or a particular activity in relation to its strategic goals. In practice, KPIs are tracked over time to monitor progress and identify areas needing improvement. They matter because they provide objective data to guide decision making and resource allocation. For instance, a software development team might track bug resolution time as a KPI to measure their efficiency. Unlike a target, which is a specific desired outcome, a KPI is a metric used to assess performance against that target. KPIs are frequently encountered in project management domains and are relevant for certifications like PMP, CAPM, and PMI-ACP.