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4.2 Key Performance Indicators

4.2 Key Performance Indicators


  • Performance indicators operate in the same way as risk indicators with only difference is the risk indicator is to measure and monitor the risk whereas performance indicator is to measure and monitor the performance. Performance indicators measure how well a process is doing in terms of its goals and objectives.


  • For example, a KPI may indicate that an error rate of 10 percent is within limit however anything above 10 percent requires escalation with some form of response.


  • Following are the characteristics of a good KPI metrics:


  • KPI should have a feature of SMART i.e. smart, measurable, achievable, reliable and timeliness.

  • KPI should provide value to the business.

  • KPI should be linked to a specific business goal.

  • KPI should be measurable and comparable over a period of time.


  • With the use of key performance indicators, organizations can measure and monitor a performance change indication.


  • Key Performance Indicators and Key Risk Indicators are mostly used in combination with one another to measure performance and mitigate risk.


Key aspects from CRISC exam perspective


CRISC Questions

Possible Answer 

What is the primary objective of key performance indicators ?

To determine how well a process is doing in terms of its goals and objectives.


 

   


Self-Assessment Questions


Flashcards - 4.2 Key Performance Indicators


Practice Questions - 4.2 Key Performance Indicators




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