KPI and CPI are both types of Service Levels.
According to the provided reference, there are two primary types of Service Levels: Critical Performance Indicator (CPI) and Key Performance Indicator (KPI).
In the context of service levels and performance management:
- Service Levels: These define the quality, speed, or other characteristics of a service that must be met.
- Metric/Measurement: This describes how the Service Level is measured or the specific performance criterion.
- Calculation Definition: This sets forth the specific formula used to calculate the Service Level based on the metric or measurement.
Let's break down KPI and CPI based on this structure:
Key Performance Indicator (KPI)
KPIs are widely used metrics that help measure the performance of a business, project, or individual activity against strategic goals. They are "key" because they are considered the most important indicators of success or progress towards objectives.
- Role: Often used to track overall health, strategic progress, and efficiency.
- Focus: Can cover various areas like sales, marketing, operations, finance, etc.
- Example (General): Customer satisfaction rate, sales growth percentage, website conversion rate.
Critical Performance Indicator (CPI)
Based on the reference, CPI is presented as another type of Service Level, distinct from but alongside KPI. While the reference doesn't explicitly define CPI beyond classifying it as a Service Level type, in a service level context, Critical Performance Indicators typically represent metrics that are absolutely essential or non-negotiable for the service to be considered operational or successful. Failure to meet a CPI might have significant consequences.
- Role: Typically used to track performance elements that are critical to core functionality or contractual obligations.
- Focus: Often on essential operational metrics, availability, or fundamental quality requirements.
- Example (Contextual): System uptime percentage (e.g., 99.9% availability), response time for critical support tickets (e.g., within 1 hour), data processing accuracy rate (e.g., 99.99%).
KPI vs. CPI: A Simple Comparison
While both are Service Levels used to measure performance, their distinction often lies in their criticality and scope.
| Feature | Key Performance Indicator (KPI) | Critical Performance Indicator (CPI) |
|---|---|---|
| Type of Service Level | Yes | Yes |
| Importance | Key indicators of success or progress | Absolutely essential/critical performance metrics |
| Focus | Broader strategic or operational goals | Core functionality or critical requirements |
| Impact of Failure | May indicate areas for improvement | Can indicate severe issues or contract breach |
In summary, within the framework described by the reference, KPI and CPI are specific categories of Service Levels, each defined by a Metric/Measurement and a Calculation Definition. KPIs tend to monitor overall performance and strategic goals, while CPIs focus on performance aspects deemed critical for the service's fundamental operation or success.
