What is difference between KPI and PPI?

Answer 1

A few years ago I posted a new method for dealing with KPIs (Key Performance Indicators) from my years of experience in business and advocated for a different approach. Rather than individual metrics which have been traditionally used, I have used an INDEX of metrics.

Why Indexed KPIs are Critical for Business Performance and Success

http://www.r3now.com/why-indexed-kpis-are-critical-for-business-performance-and-success

Using Key Performance Indicators for Building a Strategy Focused Organization

http://www.r3now.com/using-key-performance-indicators-for-building-a-strategy-focused-organization

It would appear that SAP (http://www.sap.com) has adopted the same principals but called them different names. From an internal presentation at SAP by their Business Transformation Group.

KPI - Key Performance Indicator (discrete activity metrics and measurements)

PPI - Process Performance indicator (a process related collection of KPIs)

BPI - Business Performance indicator (a collection of the PPIs aligned to business strategy).

Enterprise Value Architecture - the key for linking Scorecards, value drivers and measurements (2011): Defining Value & Performance Drivers at the right level, pg. 15.

From what I can tell only SAP is using these terms to describe the strategic way of measuring business performance (a form of "KPI") which I have advocated.

The SAP approach, of leaving the KPI as it is understood alone, and defining two new index categories is a more refined and structured approach to achieving the same goals which I have long espoused.

Their approach, again, of using the 3 different hierarchical categories also has some alignment to the balanced scorecard approach. These categories align well with operational, tactical, and strategic business objectives.

Answer 2

Key Performance Indicators (KPIs) are specific, measurable metrics used to evaluate the success of an organization or a particular activity. They are typically used to track progress towards strategic goals. On the other hand, Process Performance Indicators (PPIs) are metrics that focus on the efficiency and effectiveness of specific processes within an organization. PPIs help identify areas for improvement within processes to enhance overall performance. In summary, while KPIs measure overall organizational success, PPIs focus on the performance of individual processes.