What is KPI and how does a Business Analyst use it?

Question

Accepted Answer

**KPI** — Key Performance Indicator. Measurable value showing effectiveness.

**Purpose:**
- Measure success of objectives.
- Track progress over time.
- Support data-driven decisions.

**KPI characteristics (SMART):**
- **S**pecific — clear definition.
- **M**easurable — quantifiable.
- **A**chievable — realistic.
- **R**elevant — aligned with goals.
- **T**ime-bound — has deadline.

**Examples by category:**
```
Financial: Revenue, profit margin, ROI
Customer: Satisfaction score, retention rate
Process: Cycle time, error rate
Employee: Productivity, turnover rate
```

**BA use:**
- Define KPIs for requirements.
- Measure project success.
- Track post-implementation benefits.
- Report to stakeholders.

Business Analyst: What is KPI and how does a Business Analyst use it?