According to Microsoft, a Key Performance Indicator (KPI) is a visual cue that communicates the amount of progress made toward a goal. KPIs are a part of Microsoft Office SharePoint Server 2007 and are an out of the box feature. Unfortunately people often get confused as to how to actually implement KPIs in their environment. Below is an example of how to use a KPI. In this example I have a list of Performance Reviews. When a performance review is completed the status of the list will be updated to reflect completed. I then want a KPI to indicate how many reviews are completed based on the goals of 80% and 100%.

First let’s look at my performance reviews list. This is based on the tasks list template.
 

Next we will create the KPI list.

1. Go to View All Site Content
2. Click Create
3. Under Custom Lists, click KPI list
4. Give the list a name and description and click Create

Once the list is created you can populate a KPI

1. Click the New drop down and select Indicator using data in a SharePoint list
2. Enter a name of Performance Review KPI
3. In the Indicator Value section next to the list URL text box, click the Browse button
4. Select the Performance Reviews list and click OK
5. In the value calculation enter the following information

 

Set the Status Icon Rules as follows:

 

Click OK.

Your KPI should look something like this:

Now, when the status is updated in the Performance Reviews Task List the KPI should be automatically updated as well.