Key performance indicator (KPI)
A metric a team chooses to monitor as a sign of progress toward an intended result.
Operations glossary
A KPI is a measure a team chooses to watch over time.
This definition explains key performance indicators, metrics, and targets—and why those words do not choose a measure, set a threshold, or decide what a business should do.
Key performance indicator (KPI) is a metric used to measure progress toward intended results. A KPI can make a discussion more specific; it does not decide which result matters, what target is appropriate, or what action should follow. Read the NIST definition.
Three related terms
The words are related, but they do different jobs.
Knowing the difference can make a performance conversation clearer without selecting a measurement system, target, or business action.
Metric
A measurement used to describe or track something. A metric is not automatically a KPI.
Target
A stated level, range, or direction a team may use in a particular context. A target is not supplied by the term KPI itself.
Why the distinction matters
A KPI can describe progress. It does not decide the next move.
The important distinction
A glossary explains the label. It does not set the measure.
A KPI is meaningful only in a particular context. The term itself cannot tell a team what to measure, what a number means, or what action to take.
Context matters
One measure can appear in different conversations.
Teams may discuss revenue, service, quality, inventory, production, cost, customer activity, or another topic. The same label does not establish a definition, data source, time frame, target, or decision for every business.
A source note
Common language helps a team describe a question.
Different teams can use the same word while working with different goals, definitions, data, limits, and trade-offs.
Keep the term and the decision separate.
NIST defines a KPI as a metric of progress toward intended results. That definition explains the term; it does not select the result, metric, target, threshold, data, reviewer, or action for a particular team.
Glossary boundary: This page does not provide a KPI framework, scorecard, dashboard, target, benchmark, calculation, recommendation, prediction, or business decision.
What this glossary does not decide
This educational definition does not collect, connect, clean, combine, process, analyze, calculate, score, validate, compare, interpret, visualize, report on, or model a business’s data; select metrics, KPIs, targets, thresholds, dashboards, reports, systems, sources, actions, plans, prices, forecasts, suppliers, inventory, production, or customer decisions; determine data completeness, accuracy, quality, relevance, privacy, security, compliance, financial condition, profitability, demand, capacity, cost, risk, performance, outcome, or readiness; generate an insight, recommendation, forecast, report, dashboard, answer, trend, anomaly, or action plan; or provide financial, accounting, tax, legal, regulatory, privacy, security, data-governance, procurement, quality, food-safety, personnel, marketing, sales, inventory, supply-chain, retailer, or operational advice.
Source note
Reference for this definition
This source supports the terminology on this page. It is not a substitute for a business’s own qualified reviewers, data, records, or applicable authorities.
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