A KRI (Key Risk Indicator) and a KPI (Key Performance Indicator) are two measures used to measure risk and performance within organizations. Both KRIs and KPIs are used by organizations to identify, access, monitor and control the risks associated with their activities. However, as evidenced by their different names, they serve two distinct purposes:
KRI - A Key Risk Indicator is typically used for risk management; it tracks a specific factor or trend in order to alert management about potential risks.
An example of a KRI could be tracking the number of customer complaints received each month in order to identify any potential problems that may require further investigation or action from your business.
KPI - A Key Performance Indicator usually focuses on operational effectiveness; it refers to any measure of activity that relates directly to the success of an organization’s operations. Examples include measuring how quickly customer orders are processed, or how many products are sold during an internal promotional campaign.
Tracking KPIs regularly over time, businesses can have a better understanding of how well their key activities perform against established targets.