Define Key Performance Indicators? How it help companies to manage existing risks?
Performance measurement is a crucial aspect in companies since it demonstrates the effectiveness and efficiency of achieving business goals. Key Performance Indicators (KPI’s) are quantifiable, measurable values in the performance process that convey information used to monitor, estimate, analyze, and optimize a company’s objectives in a given period (Ramesh, Nadu, Manimegalai, & Valsan, 2019). KPI’s can be financial or consumer-focused and differ across companies since they are based on needs and priorities. Operational cash flows and consumer safety are examples of financial and consumer-based KPI’s, respectively. KPI’s help in risk management by providing transparent information on a company’s activities that is used in decision making to mitigate the risks. KPI’s are quantifiable, measurable values that indicate a company’s performance efficiency and are used in risk management to provide activities visibility and transparency, which are crucial in decision-making to mitigate risks.(653words)
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