What is a key performance indicator

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Strategic KPIs help organizations see the "big picture" of overall performance. If an organization wants to view the most critical aspects of its overall business model, strategic KPIs help move the company in the right direction. They align the organization's mission, values, and vision. Through viewing the critical aspects of a company, the strategic KPIs help monitor progress and long-term goals. When analyzing a company, executives rely on strategic KPIs because they help monitor progress and make informed strategic choices. These indicators range from return on investments (ROI), profit margin, employee satisfaction, and sustainability metrics.

Operational KPIs offer essential metrics that are in charge of effectiveness and efficiency in day-to-day operations. For example, the operating cash flow aspect is a part of an operational KPI. This reflects the cash flow from day-to-day operations. If this displays a positive cash flow, it demonstrates that the organization can cover expenses and invest in growth. Operational KPIs assess performance metrics to determine how efficient an organization is. For example, productivity relates output relative to input.

Customer-focused KPIs are critical to ensuring that customer retention rates stay high while implementing new ways to earn new customers' trust. An aspect of this is first response time (FRT). This measures the time between a customer support ticket and an agent's response. Reducing this time is essential to running a quality business because customers value their time, especially in a situation that demands a support ticket. Another aspect of customer-focused KPIs is the average resolution time. This ensures the resolution aspect of response time is adequate to each other. When there is a response by an agent, that agent is seeking a resolution between the customer and the organization. Constant resolutions are critical to an organization's success and strengthen its mission, value, and vision statements.

Business Intelligence Key Performance Indicators (KPIs) with Examples. (2019, May 14).

What is a Key Performance Indicator (KPI)? Explanation and Examples. (n.d.).

Reference no: EM133696624

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