To clear up the confusion, a KPI is a metric, but metrics are used to measure units in KPIs. These two terms are often used interchangeably, so it is important to know the difference between the two. Are you doing a KPI or deciding which metric to use? How are units measured in KPIs? What is a KPI anyway?

You have to understand, first of all, what a KPI is first. In business terminology, KPIs, as the name suggests, are a way for companies and organizations to measure their performance using metrics. However, to measure units in KPIs, you need to determine which form of metric you want to use for easier evaluation and understanding and, of course, relevant to your goal. Once you have decided, keep in mind that you need to know what metric system you want to use to measure the units in KPIs. Numbers and color coding systems are just some of the most commonly used units when measuring KPIs.

To know what to measure in KPIs, you should try to evaluate the following and prioritize them:

– What do customers say is important?
– What are the areas of your organization that you would like to solve?
– What are the business goals you want your organization to achieve?

You may be wondering, why is it so important to measure performance? There are 8 different reasons why it is necessary to measure units in KPIs to measure performance and they are all listed below:

1. Evaluation
2.Control
3. Budget
4. Motivation
5. Celebration
6. Promotion
7. Learning and Development
8. Improvement

If you look at all those reasons, they are all self explanatory. However, all of them are crucial to developing a successful business that can last over time. When you measure units on KPIs for evaluation and comparison, you’ll often notice that not all KPIs are created equal. This is because different companies have different goals, so they use different indicators that are fed through the system for analysis.

These raw values ​​can be Quantitative (presentation of numbers, used mainly for sales), Practical (comparison of processes already existing in the company), Directional (specifies if the company is going up or down in terms of success rate), Actionable Indicators ( actions and methods to apply) or financial (value added to the company). For each and every category, there are different metrics that are used to measure the units in the KPIs. You will be able to analyze which one is the most applicable. It could be a color-coded graph or a numbered presentation of data, but either way, it all boils down to one thing: measurement.

The bottom line, therefore, is that it doesn’t matter what you use to measure the units in KPIs, but what metric you choose. For a better understanding, it is often recommended that organizations and individuals go through a KPI training program to get answers to all their questions regarding creating an efficient KPI.