Metric and KPI are related but distinct terms in performance management. A metric is any quantifiable measure used to track a business activity or process — metrics can include any measurable attribute of operations, whether or not it is strategically significant. A KPI (Key Performance Indicator) is a metric that has been specifically selected because it directly measures performance against a strategic or critical operational objective; KPIs are a subset of metrics, distinguished by their direct link to outcomes that matter for organisational decision-making.
Why This Matters
Conflating metrics and KPIs leads to bloated reporting sets where everything is treated as equally important. When organisations distinguish clearly between KPIs — the small number of measures that directly indicate whether strategic objectives are being achieved — and supporting metrics, they can focus management attention on what matters most while retaining the broader measurement data for diagnostic purposes.
Where This Fits
This term sits within the Reporting area of Performance & Control.
Related Terms
Related Knowledge
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