Key Performance Indicators (KPIs) are measurable values that demonstrate how effectively an organization is achieving its key business objectives.
A KPI is usually a measure that is calculated from other measures.
For example, the KPI Employee Turnover % is based on Total number of leavers in a year divided by Average number of employees per year multiplied by 100.
But a KPI without a target value is meaningless. So a KPI is usually evaluated against a target value that is often decided by management. For example, you would expect that the KPI Lost Sales should have very low target value, ideally zero. Or, the KPI Renewal Rate for Current Subscribers might be set to a target value of 80%. Sometimes there are multiple target values defined to indicate different levels of performance.
With a defined target, a KPI becomes meaningful. Often visual hints are used to provide the business user with an instant indication of performance. Color is often used to indicate the level of severity or success. For example, if a KPI value is displayed in green, all is well. Whereas yellow might mean fair, and red might mean things are not going well.
KPIs are usually filtered using attributes to provide business context. For example, you might apply a filter by country and time period.
SAP S/4HANA embedded analytics includes many predefined KPIs that cover all areas of a business. It is possible to create your own custom KPIs if the predefined ones are not suitable.
KPIs are displayed on tiles. The tiles are organized using the SAP Fiori Launchpad. Business users can choose which KPIs they want to display on their own SAP Fiori Launchpads. They can choose any KPIs that are included in the catalogs that are assigned to them.
The KPIs displayed on tiles provide an at-a-glance view of business performance. Organizing the tiles into Tile Groups, such as Account Payable - Analytics, provides the business user with a cockpit of key performance indicators. If the business users wants to investigate a KPI further, they simply click on the tile to drill-down to the underlying details.