Key Performance Indicators
Key Performance Indicators, Metrics, Key Risk Indicators.
Description
KPIs are important because it gives you a value to compare against your current performance. KPIs clearly illustrate whether you are reaching your goals. Implementing KPIs in your company means you can set goals, devise a strategy to reach your goals, and evaluate your performance along the way. The course is designed to Study KPI in a brief, the students will also learn about Metrics and Key risk indicators.
Why are KPIs important?
Here are four additional reasons that KPIs are important for businesses.
- KPIs strengthen employee morale
- KPIs support and influence business objectives
- KPIs foster personal growth
- KPIs are critical for performance management
What is a key risk indictor (KRI)?
A key risk indicator (KRI) is a metric for measuring the likelihood that the combined probability of an event and its consequences will exceed the organization’s risk appetite and have a profoundly negative impact on an organization’s ability to be successful.
Key risk indicators play an important role in enterprise risk management programs. Benefits of KRIs include the following:
- advance notice of potential risks that could damage the organization;
- insight into possible weaknesses in an organization’s monitoring and control tools; and
- ongoing risk monitoring between risk assessments
KRIs and KPIs: What’s the difference?
Key risk indicators are often confused with key performance indicators (KPIs), which are metrics that help an organization assess progress toward declared goals.
The two terms are functionally the inverse of each other. While they may be separate and distinct for some issues, the creation of one often results in the creation of the other as its complement.
As stated above, KRIs provide metrics regarding risks and their potential impact on business performance. They function as an early warning capability for monitoring, analyzing, managing and mitigating key risks.
By contrast, KPIs demonstrate how well the organization is performing against its goals and objectives -e.g., sales, revenues and customer satisfaction. Like KRIs, key performance indicators can be applied to the people, processes and technologies that are critical to an organization’s success.
