What is Key Performance Indicator?
A key performance indicator (KPI) is a quantifiable measure used by a business to track progress toward its strategic and operational objectives. KPIs translate strategy into concrete numbers that managers can monitor.
How It Works
- Define the strategic objective the KPI must support.
- Choose a specific, measurable, and time-bound metric.
- Set a baseline and a target.
- Assign an owner accountable for the result.
- Review the KPI on a recurring cadence and trigger corrective action when off-target.
Saudi Context
Vision 2030 transformation offices and Saudi public sector entities operate KPI dashboards that align ministerial and program goals with national objectives. Listed companies on Tadawul disclose selected operating and financial KPIs in their annual and quarterly reports.
Example
A SaaS company sets a KPI of ‘monthly recurring revenue growth ≥ 10% month-over-month’. The dashboard tracks the actual growth and turns red when it falls below 7%, triggering a sales review.