KPI – or Key Performance Indicator – is a very commonly used term in Business Performance Management. You can read more about them here – http://en.wikipedia.org/wiki/Key_performance_in....

In terms of scorecards (which is the framework for this series of articles), an indicator is a graphical representation of the success/failure of the KPI. Which is, if I understand correctly, what you are getting at.

As to where the term KPI came from, that I can't take reponsibility for, you'd need to point the finger at whoever first came up with it many many eons ago

So, I am not really satisfied with this conversion of the word “indicator” into “measure” from a language viewpoint. In addition, an indicator as I understand the term is a bit 'vague' and 'general' while the word 'measure' or 'measurement' is very specific and very precise that it can be measured.

If I take the speedometer in the car.

The measurement is the actual speed which is measured very precisely using the rpm of the engine, the gearing ratios, and the diameter of the tire.

The indicator in this example is really the speed ranges in the background of the diameter showing green up to 100 Kmph, yellow between 100 and 120 Kmph, and red above and beyond 120 Kmph (all for example).

If I go for a medical check-up, and they measure my blood pressure, heart beat, the minerals and salts in the kidney, blood glucose, Vitamin B12, and all hormones and enzymes, …. etc.. These are all 'mesurements' which are supposedly specific and precise. The overall sum/net result/conclusion of all these measurements may be the 'health indicator' which again my be coded as green (all OK), yellow (marginally OK) or Red (not OK) !

I hope I made my point clear !