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Performance Measurement: Key Performance Indicators (KPIs)

 
  Arthur F. Rothberg, Managing Director, CFO Edge, LLC  
  Chase Morrison, Managing Director, Resource Planning Solutions Corporation  
   
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  Article Summary  
This article on key performance indicators (KPIs) is the second in a series on four elements of performance measurement and performance management.

KPIs are measurements that quantify objectives, thus making it possible to assess performance and gauge success. While critical success factors (addressed in the first article) are defined specifically as activities or elements, key performance indicators are measurements that support critical success factors.

This article explores multiple aspects of key performance indicators including why they are necessary, what their benefits are, and how they are developed. The article also builds on examples presented in the first article on critical success factors to show how KPIs are integrated with them.

Through the application of key performance indicators, executives can properly assess the performance of their critical success factors and apply necessary corrective action. Without them, it is nearly impossible to translate high-level company objectives into day-to-day operations.

Los Angeles executives who don’t have the internal expertise or resource bandwidth to develop key performance indicators should consider engaging with an outsourced CFO services firm. A resource of this nature brings expertise in developing, integrating and making operational the entire range of performance management strategies from critical success factors, to key performance indicators, dashboards and balanced scorecards.

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