Key Performance Indicator (KPI)

01 Feb 2024 By: Michael Kansky


A Key Performance Indicator (KPI) is a measurable value that demonstrates how effectively a company is achieving key business objectives. Organizations use KPIs at multiple levels to evaluate their success at reaching targets. High-level KPIs may focus on the overall performance of the enterprise, while low-level KPIs might focus on processes in departments such as sales, marketing, HR, support and others.

Key Performance Indicator (KPI)

In the context of Best BPO (Business Process Outsourcing) Companies, KPIs are crucial for measuring the efficiency and effectiveness of the services provided. They serve as a quantifiable measure of the performance, quality of service, and customer satisfaction, among other aspects. This article will delve into the intricacies of KPIs, their importance, types, and how they are used in the BPO industry.

Understanding Key Performance Indicators

Key Performance Indicators are a type of performance measurement that helps organizations define and measure progress towards organizational goals. KPIs are often linked to strategy (they embody strategic objectives), used to measure performance against a target, and are typically quantified.

Understanding KPIs involves comprehending the purpose they serve, which is to measure factors that are pivotal to the success of an organization. KPIs differ from one organization to another, depending on their respective goals, vision, and mission. For instance, a BPO company might have a KPI related to the number of customer queries resolved within a certain timeframe.

Importance of KPIs

KPIs are vital for business growth as they provide an objective measure of progress towards business goals. They help businesses understand if they are on the right track and if not, where the improvements are needed. KPIs also promote accountability within the organization and help in decision-making.

For BPO companies, KPIs are especially important as they directly reflect the quality of services provided. They help in identifying areas of improvement, ensuring customer satisfaction, and maintaining a competitive edge in the market.

Types of KPIs

There are several types of KPIs that companies use to measure their success. Some of the common types include quantitative indicators (which can be presented with a number), qualitative indicators (which can’t be presented as a number), leading indicators (that predict the outcome of a process), and lagging indicators (that present the success or failure post the event).

In the BPO industry, some commonly used KPIs include Average Handle Time (AHT), First Call Resolution (FCR), Customer Satisfaction Score (CSAT), Net Promoter Score (NPS), and Employee Satisfaction Score (ESAT).

Setting KPIs in BPO Companies

Setting KPIs in BPO companies involves identifying the key factors that contribute to the success of the business. These factors could be related to customer service, process efficiency, employee performance, etc. Once these factors are identified, they are quantified into measurable KPIs.

The process of setting KPIs should be a collaborative effort involving both the management and the employees. This ensures that the KPIs are realistic, achievable, and aligned with the company’s goals. The KPIs should also be regularly reviewed and updated to reflect any changes in the business environment or company strategy.

Examples of KPIs in BPO Companies

As mentioned earlier, BPO companies often use KPIs like Average Handle Time (AHT), which measures the average duration of one transaction, or First Call Resolution (FCR), which measures the percentage of calls resolved on the first interaction. Other KPIs include Customer Satisfaction Score (CSAT), which gauges the overall satisfaction of the customer with the service provided, and Net Promoter Score (NPS), which measures the willingness of customers to recommend the company’s services to others.

Employee Satisfaction Score (ESAT) is another important KPI in BPO companies. It measures the satisfaction level of employees, which is crucial as satisfied employees tend to provide better service to customers. Other employee-related KPIs include Employee Turnover Rate and Employee Engagement Level.

Challenges in Setting KPIs

While setting KPIs is crucial for the success of a BPO company especially in multilingual environment, it also comes with its set of challenges. One of the main challenges is identifying the right set of KPIs that truly reflect the performance of the company. With numerous potential KPIs to choose from, selecting the ones that align with the company’s goals can be a daunting task.

Another challenge is ensuring that the KPIs are measurable and data-driven. This requires a robust data collection and analysis system. The KPIs should also be flexible enough to adapt to changes in the business environment or company strategy.

Measuring and Monitoring KPIs

Once the KPIs are set, the next step is to measure and monitor them. This involves collecting data, analyzing it, and then making decisions based on the results. The measurement and monitoring of KPIs should be a continuous process, with regular reviews and updates.

In BPO companies, KPIs can be measured using various tools and software that collect and analyze data. These tools provide real-time insights into the performance of the company, allowing for timely decision-making and improvements.

Tools for Measuring KPIs

There are several tools available in the market for measuring KPIs. These tools help in data collection, data analysis, and visualization of KPIs. Some of the popular tools include Google Analytics, Tableau, Zoho Reports, and Microsoft Power BI.

These tools provide a dashboard view of the KPIs, making it easy for the management to understand the performance of the company at a glance. They also provide features like real-time tracking, trend analysis, and predictive analytics.

Interpreting KPIs

Interpreting KPIs involves understanding what the data is telling about the performance of the company. This requires a deep understanding of the business, the industry, and the KPIs themselves. The interpretation of KPIs should lead to actionable insights that can be used to improve the performance of the company.

For instance, if the Average Handle Time (AHT) in a BPO company is increasing, it could indicate that the agents need more training or there are issues with the process. Similarly, a low Customer Satisfaction Score (CSAT) might indicate that the quality of service needs improvement.

Improving KPIs

Improving KPIs involves taking actions based on the insights derived from the KPI data. These actions could be in the form of process improvements, employee training, system upgrades, etc. The goal is to improve the performance of the company and achieve the set targets.

In a BPO company, improving KPIs could involve actions like implementing a new call handling process to reduce Average Handle Time (AHT), providing additional training to agents to improve First Call Resolution (FCR), or improving the quality of service to increase Customer Satisfaction Score (CSAT).

Strategies for Improving KPIs

There are several strategies that BPO companies can use to improve their KPIs. One strategy is to focus on process improvement. This involves identifying the bottlenecks in the process and finding ways to eliminate them. Another strategy is to invest in employee training and development. This helps in improving the skills and performance of the employees, which in turn improves the KPIs.

Using technology is another strategy for improving KPIs. This could involve implementing new software or tools that improve efficiency, accuracy, and speed of operations. Lastly, continuous monitoring and feedback is crucial for improving KPIs. This helps in identifying issues early and taking corrective action.

Role of Management in Improving KPIs

The management plays a crucial role in improving KPIs. They are responsible for setting the KPIs, ensuring that they are measured and monitored, and taking actions based on the results. The management also needs to ensure that the KPIs are aligned with the company’s goals and that they are realistic and achievable.

Furthermore, the management needs to create a culture of accountability and performance in the organization. This involves setting clear expectations, providing regular feedback, and recognizing and rewarding good performance. All these efforts contribute towards improving the KPIs and the overall performance of the company.


In conclusion, Key Performance Indicators (KPIs) are crucial for the success of any organization, including BPO companies. They provide an objective measure of the performance of the company and help in decision-making. Setting the right KPIs, measuring and monitoring them, and taking actions to improve them are all crucial aspects of managing KPIs.

While setting and managing KPIs can be challenging, it is a critical task that can significantly impact the success of a BPO company. With the right strategies and tools, BPO companies can effectively manage their KPIs and achieve their business goals.

Business Process Outsourcing
Michael Kansky

Michael Kansky, CEO of LiveHelpNow and HelpSquad, has leveraged his 20 years of industry experience and innovative support strategies to revolutionize customer service approaches, making LiveHelpNow a leading customer service software provider, and establishing HelpSquad as a bridge between businesses and customer needs. You may contact Michael on LinkedIn: