Key performance indicator
A key performance indicator is a selected measure of progress towards an important objective or critical success factor. Key means prioritised, not every available statistic. Define the numerator, denominator, frequency, owner, target and data source, and assess whether the measure is leading or lagging, controllable and resistant to manipulation. A KPI should help a user decide or act rather than simply decorate a report.
Worked example
For a critical success factor of reliable delivery, define on-time delivery as orders arriving by the promised customer date divided by eligible orders, with exclusions disclosed.
Common mistake
A target is the desired level of a KPI, not the KPI itself. An undefined percentage can give a misleading comparison.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | APM | Direct | September 2026–June 2027 |
| ACCA | FR | Supporting | September 2026–June 2027 |
| ACCA | MA | Direct | September 2026–June 2027 |
| ACCA | PM | Direct | September 2026–June 2027 |
| FIA | FMA | Direct | September 2026–June 2027 |