What two statements are true about Key Performance Indicators (KPIs)? (Choose two.)

Question

Options

• AA KPI is a quantifiable metric of the performance of essential operations and/or processes in
• BA KPI provides the focal point for identifying how much risk a company can take in trying to
• CA KPI could reflect the performance of Service Providers in achieving their goals and
• DKPIs are based on judgment, and therefore should be used carefully when defining the value

• A
  89% (16)
• B
  6% (1)
• D
  6% (1)

Explanation

A is correct because KPIs are, by definition, quantifiable (measurable) metrics tied to essential business operations and processes - this is the textbook definition of a KPI.

C is correct because KPIs are not limited to internal business performance; they can also measure how well external Service Providers (vendors, outsourced partners) are meeting their agreed-upon goals and objectives - this is common in IT service management (e.g., ITIL).

B is wrong - describing "how much risk a company can take" refers to Risk Appetite, not a KPI. That concept belongs to risk management frameworks, not performance measurement.

D is wrong - KPIs are the opposite of judgment-based; they must be objective and data-driven. Metrics based on subjective judgment are generally poor KPIs precisely because they lack consistency and measurability.

Memory tip: Think of KPIs as a scoreboard - scoreboards show numbers (quantifiable = A), and you can have one scoreboard for your own team and one tracking how well your hired coach is performing (service providers = C). A scoreboard never tells you how risky a play is (that's strategy, not measurement).

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