What is the main purpose of a key performance indicator (KPI)?

The main purpose of a key performance indicator (KPI) is to measure progress towards specific goals. KPIs are quantifiable metrics used to evaluate the success of an organization or a particular activity in which it engages. They help in assessing how well the organization is achieving its strategic and operational objectives. By defining clear, measurable goals, KPIs enable organizations to track performance over time, adjust strategies as needed, and focus on areas that require improvement.

Focusing on specific goals allows organizations to gauge the effectiveness of their strategies in achieving desired outcomes, making KPIs essential for informed decision-making. They provide clarity and direction, and by regularly monitoring these indicators, organizations can ensure alignment with their overarching goals.