Key Performance Indicator (KPI)

Key Performance Indicator (KPI) is a calculated value that quantifies the success of an organization, project or product. It indicates how effective the organization is at achieving key objectives. This means that KPI measures the organization’s output against its targets, objectives or competition.

There are different kinds of KPI. Financial KPIs are, for example, profit, cost, sales by region and liquidity. There are also KPIs that analyse customer-related data (e.g., value, number), process (e.g., number of support tickets) and also data related to employees (e.g., satisfaction, retirement rate).

Choosing which Key Performance Indicator to use depends on the objectives of the organization. Usually, companies use KPIs at multiple levels. High-level KPIs focus on the overall performance of the company (usually financial metrics). At the same time, lower-level KPIs can be related to only one department or project. In the car rental industry, companies usually use the total number of bookings as one of their KPIs.