Organisations use various types of indicators to measure their performance, mitigate risks, and ensure that controls are in place to manage risks effectively. In this SG Insights, we explain the relationship between Key Performance Indicators (KPIs), Key Risk Indicators (KRIs), and Key Control Indicators (KCIs).

KPIs:
Key Performance Indicators (KPIs) are metrics used to measure an organisation's performance in achieving its strategic objectives and goals. KPIs are often used by management to track progress and identify areas that require improvement.

KPIs can be used in various areas of an organisation, such as finance, marketing, operations, and customer service. For instance, in marketing, KPIs can be used to measure the effectiveness of a marketing campaign, while in finance, KPIs can be used to monitor cash flow and profitability.

KRIs:
Key Risk Indicators (KRIs) are metrics used to identify, assess, and monitor potential risks that could impact an organisation's performance. KRIs are often used in risk management to help identify risks and their likelihood of occurring.

KRIs help organisations to understand the risk landscape and make informed decisions on risk mitigation strategies. For example, in the banking sector, KRIs can be used to monitor the credit risk associated with lending activities.

KCIs:
Key Control Indicators (KCIs) are metrics used to monitor the effectiveness of controls put in place to mitigate risks. KCIs help organisations to ensure that controls are working as intended and that risks are being managed appropriately.

KCIs are used in various areas of an organisation, such as compliance, information technology, and operations. For example, in information technology, KCIs can be used to monitor access controls to ensure that only authorised personnel can access sensitive information.

Relationship between KRIs, KCIs and KPIs:

KRIs and KCIs are used in conjunction with each other to manage risks effectively, while KPIs are used to measure the success of an organisation's goals and objectives.

For instance, if an organisation has a strategic objective to increase sales, a KPI could be used to measure sales growth. However, if the sales growth is associated with increased credit risk, KRIs could be used to monitor the credit risk associated with lending activities, while KCIs could be used to monitor the effectiveness of credit risk controls.

Another example is in the area of information security. If an organisation has a strategic objective to protect sensitive information, a KPI could be used to measure the effectiveness of information security controls. However, if there is a potential for a data breach, KRIs could be used to monitor the likelihood of a data breach occurring, while KCIs could be used to monitor the effectiveness of the controls put in place to prevent a data breach.

In conclusion, KPIs, KRIs, and KCIs are all important indicators used by organisations to measure performance, manage risks, and ensure that controls are in place to mitigate risks. While KPIs are used to measure the success of an organisation's goals and objectives, KRIs and KCIs are used to manage risks and ensure that controls are in place to manage risks effectively.

Organisations need to use these indicators in conjunction with each other to ensure that they have a holistic view of their performance, risks, and controls. By doing so, organisations can make informed decisions on risk mitigation strategies, improve their performance, and achieve their strategic objectives and goals.