What is KPI?
A KPI is a measurable value that shows how well you are achieving an important business goal.
KPI explained
A metric becomes a KPI when it is tied to an objective and a target: 'monthly recurring revenue' is a metric, 'reach a given MRR by the end of the year' makes it a KPI.
Good KPIs have a clear definition, an owner and a data source people agree on. Too many KPIs dilute attention; a handful per team is easier to act on.
Example
A support team's KPIs might be first response time, resolution time and customer satisfaction, each with a target and a named owner.
How it differs from similar terms
A metric is any measurement; a KPI is a metric chosen to track a goal.