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While Key Performance Indicators (KPI) offer a rational basis for judging performance, there are two main challenges. The first challenge is selecting the right key performance indicators for your business. How do you know which are the best KPIs for your needs? The standard solution is to monitor several KPIs simulataneously. This can lead to data overload and become a barrier for effective communication of business performance to executives.
The term KPI, for Key performance indicator is a widely used catch-all phrase in many industries today. This is of course, a very healthy trend because it indicates that businesses are rightly placing emphasis on measuring performance objectively. There are many important facts to consider while selecting or forming a KPI and one KPI does not fit all functions within a company, and in the same way one KPI does not fit all industries.