Primary Requirement for Choosing Key Performance Indicators

D.

Key Performance Indicators is a set of measures that a company or industry uses to measure and/or compare performance in terms of meeting their strategic and operational goals.

KPIs vary with company to company, depending on their priorities or performance criteria.

A company must establish its strategic and operational goals and then choose their KPIs which can best reflect those goals.

For example, if a software company's goal is to have the fastest growth in its industry, its main performance indicator may be the measure of its annual revenue growth.

Incorrect Answers: A: Determination of size and complexity of the enterprise is the selection criteria of the KRI, not KPI.

KPI does not have any relevancy with size and complexity of the enterprise.

B: This is not the valid answer.

C: Type of market in which the enterprise is operating do not affect the selection of KPIs.

The primary requirement before choosing key performance indicators (KPIs) of an enterprise is to establish its strategic and operational goals. Option D is the correct answer.

KPIs are metrics used to measure the performance of an organization against its goals and objectives. KPIs are crucial for assessing the success of an enterprise and making data-driven decisions to improve its performance. However, before selecting KPIs, an organization needs to establish its strategic and operational goals.

Strategic goals are long-term goals that guide an organization's overall direction, while operational goals are short-term goals that focus on day-to-day activities. KPIs should be aligned with the organization's goals and objectives. Therefore, an organization must first identify its goals and objectives before choosing KPIs.

Option A, determining the size and complexity of the enterprise, may help in identifying the appropriate KPIs to measure the performance of the enterprise, but it is not the primary requirement. Option B, prioritizing various enterprise processes, is also not the primary requirement as it focuses on processes rather than goals. Option C, determining the type of market in which the enterprise operates, may provide insights into the external environment, but it is not the primary requirement as it does not directly relate to the organization's goals and objectives.

In summary, before choosing KPIs, an enterprise must establish its strategic and operational goals. KPIs should be aligned with these goals and objectives to measure the performance of the organization and track progress towards achieving its goals.