Assignment 6 (Due: December 30, 2009, before 01:00pm)

Identify and discuss the steps for "critical success factors" approach?

HAPPY NEW YEAR!


So many important matters can compete for your attention in business that it's often difficult to see the "wood for the trees". What's more, it can be extremely difficult to get everyone in the team pulling in the same direction and focusing on the true essentials.

That's where Critical Success Factors (CSFs) can help. CSFs are the essential areas of activity that must be performed well if you are to achieve the mission, objectives or goals for your business or project.

By identifying your Critical Success Factors, you can create a common point of reference to help you direct and measure the success of your business or project.

As a common point of reference, CSFs help everyone in the team to know exactly what's most important. And this helps people perform their own work in the right context and so pull together towards the same overall aims.



What is s Critical Success Factor(CSF)?Critical Success Factor

(CSF) is the term for an element that is necessary for an organization or project to achieve its mission. It is a critical factor or activity required for ensuring the success of your business. The term was initially used in the world of data analysis,
and business analysis. For example, a CSF for a successful Information Technology (IT) project is user involvement.


Most smaller and more pragmatic businesses can still use CSF’s but we need to take a different, more pragmatic approach.

Critical Success Factors have been used significantly to present or identify a few key factors that organizations should focus on to be successful.

As a definition, critical success factors refer to "the limited number of areas in which satisfactory results will ensure successful competitive performance for the individual, department, or organization”.

As you read this and many other resources on the internet you will discover that there are potentially a confusing variety of definitions and uses of Critical Success Factors.

Before you start the journey looking at CSFs it is important to realise that the specific factors relevant for you will vary from business to business and industry to industry. The key to using CSFs effectively is to ensure that your definition of a factor of your organizations activity which is central to its future will always apply.

Therefore success in determining the CSFs for your organization is to determine what is central to its future and achievement of that future.

This page is primarily written for students of management and business, to keep things simple for application in smaller organizations remember to only have 5-7 critical factors for YOUR organization, and I am sure one of those will be cashflow!


History/Background


The idea of identifying critical success factors as a basis for determining the information needs of managers was proposed by Daniel (1961) but popularized by Rockart (1979). The idea is very simple: in any organization certain factors will be critical to the success of that organization, in the sense that, if objectives associated with the factors are not achieved, the organization will fail - perhaps catastrophically so. Rockart (1979: 85), by referring to Daniel (1961), gives the following as an example of the CSFs: new product development, good distribution, and effective advertising for the food processing industry - factors that remain relevant today for many firms.

As we start to discuss the Critical Success Factors, it is important to realize that the specific factors relevant for you will vary from business to business and industry to industry. The key to using Critical Success Factors effectively is to ensure that your definition of a factor of your organizations activity which is central to its future will always apply.

Therefore success in determining the Critical Success Factors for your organization is to determine what is central to its future and achievement of that future.



Industry CSFs:

Every organization inherits a particular set of operating conditions and challenges that are inherent to the industry (or segment of the industry) in which it chose to do business. This results in a unique set of CSFs that organizations in a particular industry must achieve to maintain or increase their competitive positions, achieve their goals, and accomplish their missions. For example, consider an organization in the airline industry. As a member of this industry, the organization inherits CSFs such as “deliver on-time service” or “move away from the hub-and-spoke system.” Failure to achieve these CSFs may render the organization unable to stay competitive in its industry and may ultimately result in its exit.

Strategic CSFs:

these factors result from the specific competitive strategy chosen by the organization. The way in which the company chooses to position themselves, market themselves, whether they are high volume low cost or low volume high cost producers, etc.

Environmental CSFs:

To be successful, an organization must be mindful of the macro environment in which it op-erates. A closed organization—one that does not fully interact with its external environ-ment—cannot survive in the long term. As a result, an organization must acknowledge the18 CMU/SEI-2004-TR-010environmental factors that can affect its ability to accomplish its mission. Environmental CSFs reflect the environmental factors over which the organization has very little control or ability to actively manage. By making these factors explicit, the organization can at least be mindful of them and actively monitor their performance relative to them.Environmental CSFs describe such conditions as current socio-political issues, the industry’s regulatory environment, and factors such as seasonality. For example, the airline industry has been dramatically affected by terrorist activities, which have forced changes in airport opera-tions and scheduling and have brought about new regulations with which airlines must com-ply. Unfortunately, airlines have very little control over this problem

Temporal CSFs

CSFs are tied to the long-term planning horizon of an organization. Over the strategic plan-ning period the organization’s CSFs may remain fairly constant, adjusted only when the or-ganization makes major changes, such as changing its mission or the industry in which it competes. However, at one time or another, every organization encounters temporary condi-tions or situations that must be managed for a specific period of time, while continuing to maintain its performance in all other areas. These temporary conditions or situations can re-sult in temporal CSFs—areas in which the organization must temporarily perform satisfacto-CMU/SEI-2004-TR-010 19 rily in order to ensure that its ability to accomplish its mission is not impeded.

Things that are measured get done more often than things that are not measured. Each CSF should be measurable and associated with a target goal. You don't need exact measures to manage. Primary measures that should be listed include critical success levels (such as number of transactions per month) or, in cases where specific measurements are more difficult, general goals should be specified (such as moving up in an industry customer service survey.


four steps of CSFs:

Industry CSF's follows from specific industry characteristics.

Different industries have different CSFs. Even within same industry CSFs are not identical from company to company. For example:
Objective: Achieve market share locally of 15%.
CSF: Increasing of customers quantity, increasing of competitiveness versus other local shops.

Strategy CSF's follows from the selected competitive strategy of the business.

It depends on how company positions itself on market, what is the strategy of business and development. Objective: Decrease time of client servicing to 50%. CSF: Install PC-based customer service system.

Environmental CSF's follows from economic or technological changes.

These factors represent environment in which company operates. They include things like the business climate, the economy, competitors, sociopolitical issues, technological improving and so on. Objective: Expand assortment of goods to attract more consumers. CSF: Discovery of new required local suppliers, arrangement of win-win relationship with them.


Temporal CSF's follows from internal organizational needs and changes.



These are temporary conditions or situations in which the organization must achieve success in order to ensure safety of successful accomplishment companies main goals.

A plan should be implemented that considers a platform for growth and profits as well as takes into consideration the following critical success factors:
• Money: positive cash flow, revenue growth, and profit margins.
• Your future: Acquiring new customers and/or distributors.
• Customer satisfaction: How happy they are.
• Quality: How good is your product and service?
• Product or service development: What's new that will increase business with existing customers and attract new ones?
• Intellectual capital: Increasing what you know is profitable.
• Strategic relationships: New sources of business, products and outside revenue.
• Employee attraction and retention: Your ability to extend your reach.
• Sustainability: Your personal ability to keep it all going.



CSFs are used by organisations to give focus on a number of factors that help define its success. They help the organisation and its
personnel to understand the key areas in which to invest their resources and time. Ideally, these CSFs are observable in terms of the impact on the organisation to allow it to have guidance and indications on its achievement of them.

CSFs can be utilised in both the organisation and the individual levels. Their identification is largely qualitative and can result in differing opinions in pinpointing them. Nevertheless, it is an approach that should be pursued as it provides value in giving due focus to a limited set of factors, which are deemed to be the most critical for an organisation or individual.

Thecompany should have a critical success factors in order to know the improvement made by the company from the past up to the present generation. This is possible to every organization even to a smaller unit of business to maintain its progress and limits its capacity. This would show that critical success factors indeed contribute a big help to individuals not only for a certain corporation but also to a person.



REFERENCES:

http://rapidbi.com/created/criticalsuccessfactors.html
http://www.mindtools.com/pages/article/newLDR_80.htm
http://en.wikipedia.org/wiki/Critical_success_factor
http://www.providersedge.com/docs/km_articles/Critical_Success_Factors_of_KM.pdf




MY blog > fujiwarayumi.blogspot.com

Identify and discuss the steps for "critical success factors" approach? (at least 1,500 words)

What is a Critical Success Factor?
Critical Success Factors (CSF’s) are the critical factors or activities required for ensuring the success your business. The term was initially used in the world of data analysis, and business analysis.

The idea of identifying critical success factors as a basis for determining the information needs of managers was proposed by Daniel (1961) but popularized by Rockart (1979). The idea is very simple: in any organization certain factors will be critical to the success of that organization, in the sense that, if objectives associated with the factors are not achieved, the organization will fail - perhaps catastrophically so. Rockart (1979: 85), by referring to Daniel (1961), gives the following as an example of the CSFs: new product development, good distribution, and effective advertising for the food processing industry - factors that remain relevant today for many firms.

Rockart defined CSFs as:
"The limited number of areas in which results, if they are satisfactory, will ensure successful competitive performance for the organization. They are the few key areas where things must go right for the business to flourish. If results in these areas are not adequate, the organization's efforts for the period will be less than desired."

He also concluded that CSFs are "areas of activity that should receive constant and careful attention from management."

Now we are finished with our definition of CSFs, let us know discuss the steps on the CSFs approach

Types of Critical Success Factor
There are four basic types of CSF's
They are:
1. Industry CSF's resulting from specific industry characteristics;
2. Strategy CSF's resulting from the chosen competitive strategy of the business;
3. Environmental CSF's resulting from economic or technological changes; and
4. Temporal CSF's resulting from internal organizational needs and changes.
Things that are measured get done more often than things that are not measured.
Each CSF should be measurable and associated with a target goal. You don't need exact measures to manage. Primary measures that should be listed include critical success levels (such as number of transactions per month) or, in cases where specific measurements are more difficult, general goals should be specified (such as moving up in an industry customer service survey).

STEPS:
Step One: Establish your business's or project's mission and strategic goals

In order to make CSFs, you need to have a basis as to what your CSFs will be. You have to look into the business as to what areas need attention more.

Step Two: For each strategic goal, ask yourself "what area of business or project activity is essential to achieve this goal?" The answers to the question are your candidate CSFs.

This is how you define your candidate CSFs. Candidate CSFs, meaning these are not the real critical success factors, but only the list of probable critical success factors for your company or your organization. From these candidate CSFs, we shall get our true critical success factors.

Tip: How Many CSFs?
To make sure you consider all types of possible CSFs, you can use Rockart's CSF types as a checklist.
• Industry - these factors result from specific industry characteristics. These are the things that the organization must do to remain competitive.
• Environmental - these factors result from macro-environmental influences on an organization. Things like the business climate, the economy, competitors, and technological advancements are included in this category.
• Strategic - these factors result from the specific competitive strategy chosen by the organization. The way in which the company chooses to position themselves, market themselves, whether they are high volume low cost or low volume high cost producers, etc.
• Temporal - these factors result from the organization's internal forces. Specific barriers, challenges, directions, and influences will determine these CSFs.
•
Step Three: Evaluate the list of candidate CSFs to find the absolute essential elements for achieving success - these are your Critical Success Factors.

As you identify and evaluate candidate CSFs, you may uncover some new strategic objectives or more detailed objectives. So you may need to define your mission, objectives and CSFs iteratively.

In this step, you are filtering the candidate CSFs that you made so that only the important ones are left. What is left will be the CSFs for your company.

Step Four: Identify how you will monitor and measure each of the CSFs.
It is not enough to just define your CSFs. After you have found what the CSFs of your organization really are, then you have to constantly monitor it, so that your business will still be on the path to success.

Step Five: Communicate your CSFs along with the other important elements of your business or project's strategy.

Step Six: Keep monitoring and reevaluating your CSFs to ensure you keep moving towards your aims. Indeed, whilst CSFs are sometimes less tangible than measurable goals, it is useful to identify as specifically as possible how you can measure or monitor each one.


Examples of generic Critical Success Factors are new product development, good distribution and effective advertising

Critical Success Factors have been used significantly to present or identify a few key factors that organizations should focus on to be successful.
As a definition, critical success factors refer to "the limited number of areas in which satisfactory results will ensure successful competitive performance for the individual, department, or organization”.


Here is a more complex CSF method that I got from the Internet.

A Critical Success Factor Method
Start with a vision:
 Mission statement
 Develop 5-6 high level goals
 Develop hierarchy of goals and their success factors
 Lists of requirements, problems, and assumptions
 Leads to concrete requirements at the lowest level of decomposition (a single, implementable idea) Along the way, identify the problems being solved and the assumptions being made Cross-reference usage scenarios and problems with requirements
 Analysis matrices
 Problems vs. Requirements matrix
 Usage scenarios vs. Requirements matrix
 Solid usage scenarios
 Relationship to Usage Scenarios
 Usage scenarios or "use cases"; provide a means of determining:
• Are the requirements aligned and self-consistent?
• Are the needs of the user being met as well as those of the enterprise?
• Are the requirements complete
 Results of the Analysis

What you see from above I think is very understandable. The only ones I couldn’t elaborate much further are the matrices there, because they didn’t provide a diagram for that. The method above also requires the use of “use case” diagrams. A use case diagram is a description of sequences of actions performed by a given system to produce a result for an actor. It is usually drawn with ellipses, human stick figures and lines to depict the situation.

Critical Success Factors are essential to a business and to its success. These factors are to guide the business in what they must consider so that their business will be a success.

How to write a good Critical Success Factor - CSF's

In an attempt to write good CSF's, a number of principles could help to guide writers. These principles are:
• Ensure a good understanding of the environment, the industry and the company – It has been shown that CSF's have five primary sources, and it is important to have a good understanding of the environment, the industry and the company in order to be able to write them well. These factors are customized for companies and individuals and the customization results from the uniqueness of the organization.
• Build knowledge of competitors in the industry – While this principle can be encompassed in the previous one, it is worth highlighting separately as it is critical to have a good understanding of competitors as well in identifying an organization's CSF's Knowing where competitors are positioned, what their resources and capabilities are, and what strategies they will pursue can have an impact on an organization's strategy and also resulting CSF's
• Develop CSF's which result in observable differences – A key impetus for the development of CSF's was the notion that factors which get measured are more likely to be achieved versus factors which are not measured. Thus, it is important to write CSF's which are observable or possibly measurable in certain respects such that it would be easier to focus on these factors. These don't have to be factors that are measured quantitatively as this would mimic key performance indicators; however, writing CSF's in observable terms would be helpful.
• Develop CSF's that have a large impact on an organization's performance – By definition, CSF's are the "most critical" factors for organizations or individuals. However, due care should be exercised in identifying them due to the largely qualitative approach to identification, leaving many possible options for the factors and potentially results in discussions and debate. In order to truly have the impact as envisioned when CSF's were developed, it is important to thus identify the actual CSF's, i.e. the ones which would have the largest impact on an organization's (or individual's) performance.

Identify and discuss the steps for "critical success factors" approach? (at least 1,500 words)

Critical Success Factors
Identifying the things that really matter for success

So many important matters can compete for your attention in business that it's often difficult to see the "wood for the trees". What's more, it can be extremely difficult to get everyone in the team pulling in the same direction and focusing on the true essentials.

That's where Critical Success Factors (CSFs) can help. CSFs are the essential areas of activity that must be performed well if you are to achieve the mission, objectives or goals for your business or project.

By identifying your Critical Success Factors, you can create a common point of reference to help you direct and measure the success of your business or project.

As a common point of reference, CSFs help everyone in the team to know exactly what's most important. And this helps people perform their own work in the right context and so pull together towards the same overall aims.

The idea of CSFs was first presented by D. Ronald Daniel in the 1960s. It was then built on and popularized a decade later by John F. Rockart, of MIT's Sloan School of Management, and has since been used extensively to help businesses implement their strategies and projects.

Inevitably, the CSF concept has evolved, and you may have seen it implemented in different ways. This article provides a simple definition and approach based on Rockart's original ideas.

Rockart defined CSFs as:
"The limited number of areas in which results, if they are satisfactory, will ensure successful competitive performance for the organization. They are the few key areas where things must go right for the business to flourish. If results in these areas are not adequate, the organization's efforts for the period will be less than desired."

He also concluded that CSFs are "areas of activity that should receive constant and careful attention from management."

Critical Success Factors are strongly related to the mission and strategic goals of your business or project. Whereas the mission and goals focus on the aims and what is to be achieved, Critical Success Factors focus on the most important areas and get to the very heart of both what is to be achieved and how you will achieve it.

CSFs are best understood by example. Consider a produce store "Farm Fresh Produce", whose mission is:

"To become the number one produce store in Main Street by selling the highest quality, freshest farm produce, from farm to customer in under 24 hours on 75% of our range and with 98% customer satisfaction."

The strategic objectives of Farm Fresh are to:

* Gain market share locally of 25%.
* Achieve fresh supplies of "farm to customer" in 24 hours for 75% of products.
* Sustain a customer satisfaction rate of 98%.
* Expand product range to attract more customers.
* Have sufficient store space to accommodate the range of products that customers want.

In order to identify possible CSFs, we must examine the mission and objectives and see which areas of the business need attention so that they can be achieved. We can start by brainstorming what the Critical Success Factors might be (these are the "Candidate" CSFs.)
Objective Candidate Critical Success Factors
Gain market share locally of 25%

Increase competitiveness versus other local stores
Attract new customers
Achieve fresh supplies from "farm to customer" in 24 hours for 75% of products

Sustain successful relationships with local suppliers
Sustain a customer satisfaction rate of 98%

Retain staff and keep up customer-focused training
Expand product range to attract more customers


Source new products locally
Extend store space to accommodate new products and customers

Secure financing for expansion
Manage building work and any disruption to the business

Once you have a list of Candidate CSFs, it's time to consider what is absolutely essential and so identify the truly Critical Success Factors.

And this is certainly the case for Farm Fresh Produce. One CSF that we identify from the candidate list is "Sustain successful relationships with local suppliers." This is absolutely essential to ensure freshness and to source new products.

Another CSF is to attract new customers. Without new customers, the store will be unable to expand to increase market share.

A third CSF is financing for expansion. The store's objectives cannot be met without the funds to invest in expanding the store space.

Summary Steps

In reality, identifying your CSFs is a very iterative process. Your mission, strategic goals and CSFs are intrinsically linked and each will be refined as you develop them.

Here are the summary steps that, used iteratively, will help you identify the CSFs for your business or project:

Step One: Establish your business's or project's mission and strategic goals

Step Two: For each strategic goal, ask yourself "what area of business or project activity is essential to achieve this goal?" The answers to the question are your candidate CSFs.

To make sure you consider all types of possible CSFs, you can use Rockart's CSF types as a checklist.

* Industry - these factors result from specific industry characteristics. These are the things that the organization must do to remain competitive.
* Environmental - these factors result from macro-environmental influences on an organization. Things like the business climate, the economy, competitors, and technological advancements are included in this category.
* Strategic - these factors result from the specific competitive strategy chosen by the organization. The way in which the company chooses to position themselves, market themselves, whether they are high volume low cost or low volume high cost producers, etc.
* Temporal - these factors result from the organization's internal forces. Specific barriers, challenges, directions, and influences will determine these CSFs.


Step Three: Evaluate the list of candidate CSFs to find the absolute essential elements for achieving success - these are your Criticial Success Factors.

As you identify and evaluate candidate CSFs, you may uncover some new strategic objectives or more detailed objectives. So you may need to define your mission, objectives and CSFs iteratively.

Step Four: Identify how you will monitor and measure each of the CSFs.

Step Five: Communicate your CSFs along with the other important elements of your business or project's strategy.

Step Six: Keep monitoring and reevaluating your CSFs to ensure you keep moving towards your aims. Indeed, whilst CSFs are sometimes less tangible than measurable goals, it is useful to identify as specifically as possible how you can measure or monitor each one.


Key Points

Critical Success Factors are the areas of your business or project that are absolutely essential to its success. By identifying and communicating these CSFs, you can help ensure your business or project is well-focused and avoid wasting effort and resources on less important areas. By making CSFs explicit, and communicating them with everyone involved, you can help keep the business and project on track towards common aims and goals.

Identify and discuss the steps for "critical success factors" approach? (at least 1,500 words)

Critical Success Factor (CSF) is the term for an element that is necessary for an organization or project to achieve its mission. It is a critical factor or activity required for ensuring the success of your business. The term was initially used in the world of data analysis, and business analysis. For example, a CSF for a successful Information Technology (IT) project is user involvement.

A plan should be implemented that considers a platform for growth and profits as well as takes into consideration the following critical success factors:
* Money: positive cash flow, revenue growth, and profit margins.
* Your future: Acquiring new customers and/or distributors.
* Customer satisfaction: How happy they are.
* Quality: How good is your product and service?
* Product or service development: What's new that will increase business with existing customers and attract new ones?
* Intellectual capital: Create assets from the tools you make to run your business.
* Strategic relationships: New sources of business, products and outside revenue.
* Employee attraction and retention: Your ability to find, train, and keep employees and to let go employees that are not a good fit.
* Sustainability: Your personal ability to keep it all going.

Before anything else we should examine first on how to identify CSFs
When a customer gives you business, he does so for many reasons but there are usually a few critical ones. Without those factors, he would not order from you. The rest of the reasons don't make a lot of difference. When you run your business and market it, you give customers many reasons why they should buy from you. You'll say that you give good value, you're reliable, your products are good quality and you have a high level of customer service. Your customers hear the same thing from all their suppliers but they chose you - you need to know exactly why. The reason you need to know this is because you're doing all these different things, many of them quite expensive, and many of them have no effect at all on whether you get that order. You want to concentrate on those activities which your customers find critical and which make them order from you. Your best bet is to periodically discuss your business with your best customers. They will give you feedback and tell you what they would like to see. Is quick delivery important or would they rather see a lower price? Is it important that you keep items in stock? Would they like to see you more often to discuss their orders or is a quick check by telephone enough? What about particular characteristics of your products - should they be lighter, heavier, shinier, different colours etc?
Once you have discussed your business with a number of your best customers you will notice a pattern - groups of customers will value the same things. Now it is time for you to do the selecting and decide which of the things your customer’s value is going to be priorities for you. What you are looking for are things you can do more of and better without increasing your costs and things which you can do better than your competition. If some of your customers value a quick response time and you're the only business of that type in the area, you've got one of your critical success factors. At the same time, this identifies a good target market for you - other businesses similar to those customers in the same area. Now your business strategy is streamlined: for this group of customers you use your proximity to them to give fast service and you tell similar prospects that fast service is one of your strong points. If that is the critical success factor for this group of customers you will be able to concentrate on it and stop doing some of the other things they don't value. You may even be able to charge more.

Critical success factors (CSFs) have been used significantly to present or identify a few key factors that organisations should focus on to be successful. As a definition, critical success factors refer to "the limited number of areas in which satisfactory results will ensure successful competitive performance for the individual, department, or organisation” (Rockart and Bullen, 1981). Identifying CSFs is important as it allows firms to focus their efforts on building their capabilities to meet the CSFs, or even allow firms to decide if they have the capability to build the requirements necessary to meet critical success factors (CSFs). "Critical Success Factors are the areas of your business or project that are absolutely essential to its success. By identifying and communicating these CSFs, you can help ensure your business or project is well-focused and avoid wasting effort and resources on less important areas. By making CSFs explicit, and communicating them with everyone involved, you can help keep the business and project on track towards common aims and goals...
"Identifying your CSFs is a very iterative process. Your mission, strategic goals and CSFs are intrinsically linked and each will be refined as you develop them. Here are the summary steps that, used iteratively, will help you identify the CSFs for your business or project:

First Step: Establish your business's or project's mission and strategic goals...

Second Step: For each strategic goal, ask yourself "what area of business or project activity is essential to achieve this goal?" The answers to the question are your candidate CSFs.

Third Step: Evaluate the list of candidate CSFs to find the absolute essential elements for achieving success - these are your Criticial Success Factors. As you identify and evaluate candidate CSFs, you may uncover some new strategic objectives or more detailed objectives. So you may need to define your mission, objectives and CSFs iteratively.

Fourth Step: Identify how you will monitor and measure each of the CSFs.

Fifth Step: Communicate your CSFs along with the other important elements of your business or project's strategy.

Seventh Step: Keep monitoring and reevaluating your CSFs to ensure you keep moving towards your aims. Indeed, whilst CSFs are sometimes less tangible than measurable goals, it is useful to identify as specifically as possible how you can measure or monitor each one...

To make sure you consider all types of possible CSFs, you can use Rockart's CSF types as a checklist.

Industry - these factors result from specific industry characteristics. These are the things that the organization must do to remain competitive.

Environmental - these factors result from macro-environmental influences on an organization. Things like the business climate, the economy, competitors, and technological advancements are included in this category. These relate to environmental factors that are not in the control of the organisation but which an organisation must consider in developing CSFs. Examples for these are the industry regulation, political development and economic performance of a country, and population trends. For example, Ladbrokes, a UK bookmaker, will be establishing an international business in Italy where it has just acquired a business license, a requirement for foreign sports betting firms prior to establishing a business in the country (Citywire, 2007).

Strategic - these factors result from the specific competitive strategy chosen by the organization. The way in which the company chooses to position themselves, market themselves, whether they are high volume low cost or low volume high cost producers, etc.

Temporal - these factors result from the organization's internal forces. Specific barriers, challenges, directions, and influences will determine these CSFs." Temporal factors are temporary or one-off CSFs resulting from a specific event necessitating their inclusion. Rockart and Bullen (1981) state that typically, a temporal CSF would not exist and they give as an example of a firm which "lost executives as a result of a plane crash requiring a critical success factor of rebuilding the executive group". However, with the evolution and integration of markets globally, one could argue that temporal factors are not temporal anymore as they could exist regularly in organisations. For example, a firm aggressively building its business internationally would have a need for a core group of executives in its new markets. Thus, it would have the CSF of "building the executive group in a specific market" and it could have this every year for different markets.


References:

http://en.wikipedia.org/wiki/Critical_success_factor
http://rapidbi.com/created/criticalsuccessfactors.html
http://www.coursework4you.co.uk/essays-and-dissertations/critical-success-factors.php

Sir Gamboa,

Due to the accident that I had in the school for the past few months, I wasn’t able to pass my assignments on time. In regards to this, our class Mayor, Ms. Marren Joy Pequiro and I had a conformity that allows me to submit and posts my assignments in this forum with consideration.

Critical Success Factor

Identifying the things that really matter for success



So many important matters can compete for your attention in business that it's often difficult to see the "wood for the trees". What's more, it can be extremely difficult to get everyone in the team pulling in the same direction and focusing on the true essentials.


That's where Critical Success Factors (CSFs) can help. CSFs are the essential areas of activity that must be performed well if you are to achieve the mission, objectives or goals for your business or project.
By identifying your Critical Success Factors, you can create a common point of reference to help you direct and measure the success of your business or project.
As a common point of reference, CSFs help everyone in the team to know exactly what's most important. And this helps people perform their own work in the right context and so pull together towards the same overall aims.


The idea of CSFs was first presented by D. Ronald Daniel in the 1960s. It was then built on and popularized a decade later by John F. Rockart, of MIT's Sloan School of Management, and has since been used extensively to help businesses implement their strategies and projects.

Inevitably, the CSF concept has evolved, and you may have seen it implemented in different ways. This article provides a simple definition and approach based on Rockart's original ideas.
Rockart defined CSFs as:


"The limited number of areas in which results, if they are satisfactory, will ensure successful competitive performance for the organization. They are the few key areas where things must go right for the business to flourish. If results in these areas are not adequate, the organization's efforts for the period will be less than desired."

He also concluded that CSFs are "areas of activity that should receive constant and careful attention from management."

Critical Success Factors are strongly related to the mission and strategic goals of your business or project. Whereas the mission and goals focus on the aims and what is to be achieved, Critical Success Factors focus on the most important areas and get to the very heart of both what is to be achieved and how you will achieve it.


Being Practical

As you read this and many other resources on the internet you will discover that there are potentially a confusing variety of definitions and uses of Critical Success Factors.
Before you start the journey looking at CSFs it is important to realise that the specific factors relevant for you will vary from business to business and industry to industry. The key to using CSFs effectively is to ensure that your definition of a factor of your organizations activity which is central to its future will always apply.

Therefore success in determining the CSFs for your organization is to determine what is central to its future and achievement of that future.
This page is primarily written for students of management and business, to keep things simple for application in smaller organizations remember to only have 5-7 critical factors for YOUR organization, and I am sure one of those will be cashflow!


How are they important to your business?

Identifying CSF's is important as it allows firms to focus their efforts on building their capabilities to meet the CSF's, or even allow firms to decide if they have the capability to build the requirements necessary to meet Critical Success Factors (CSF's).


Academic Background/ History

The principle of identifying critical success factors as a basis for determining the information needs of managers was proposed by RH Daniel (1961 Harvard Business Review - HBR) as an interdisciplinary approach with a potential usefulness in the practice of evaluation within library and information units but popularized by F Rockart (1979 Harvard Business Review - HBR). In time many academics have applied the methodology increasingly outside the educational establishment.


The idea is very simple:
in any organization certain factors will be critical to the success of that organization, in the sense that, if objectives associated with the factors are not achieved, the organization will fail - perhaps catastrophically so.

The following as an example of generic CSF's:
• New product development,
• Good distribution, and
• Effective advertising

Types of Critical Success Factor

There are four basic types of CSF's

They are:
1. Industry CSF's resulting from specific industry characteristics;
2. Strategy CSF's resulting from the chosen competitive strategy of the business;
3. Environmental CSF's resulting from economic or technological changes; and
4. Temporal CSF's resulting from internal organizational needs and changes.
Things that are measured get done more often than things that are not measured.

Each CSF should be measurable and associated with a target goal. You don't need exact measures to manage. Primary measures that should be listed include critical success levels (such as number of transactions per month) or, in cases where specific measurements are more difficult, general goals should be specified (such as moving up in an industry customer service survey).

Using the Tool: An Example
CSFs are best understood by example. Consider a produce store "Farm Fresh Produce", whose mission is:

"To become the number one produce store in Main Street by selling the highest quality, freshest farm produce, from farm to customer in under 24 hours on 75% of our range and with 98% customer satisfaction."

(For more on this example, and how to develop your mission statement, see our article on Vision Statements and Mission Statements.)

The strategic objectives of Farm Fresh are to:
• Gain market share locally of 25%.
• Achieve fresh supplies of "farm to customer" in 24 hours for 75% of products.
• Sustain a customer satisfaction rate of 98%.
• Expand product range to attract more customers.
• Have sufficient store space to accommodate the range of products that customers want.

In order to identify possible CSFs, we must examine the mission and objectives and see which areas of the business need attention so that they can be achieved. We can start by brainstorming what the Critical Success Factors might be (these are the "Candidate" CSFs.)




Once you have a list of Candidate CSFs, it's time to consider what is absolutely essential and so identify the truly Critical Success Factors.

And this is certainly the case for Farm Fresh Produce. One CSF that we identify from the candidate list is "Sustain successful relationships with local suppliers." This is absolutely essential to ensure freshness and to source new products.

Another CSF is to attract new customers. Without new customers, the store will be unable to expand to increase market share.

A third CSF is financing for expansion. The store's objectives cannot be met without the funds to invest in expanding the store space.



Tip: How Many CSFs?

Whilst there is no hard and fast rule, it's useful to limit the number of CSFs to five or fewer absolute essentials. This helps you maintain the impact of your CSFs, and so give good direction and prioritization to other elements of your business or project strategy.


Using the Tool: Summary Steps

In reality, identifying your CSFs is a very iterative process. Your mission, strategic goals and CSFs are intrinsically linked and each will be refined as you develop them.

Here are the summary steps that, used iteratively, will help you identify the CSFs for your business or project:

Step One: Establish your business's or project's mission and strategic goals (click here for help doing this.)

Step Two: For each strategic goal, ask yourself "what area of business or project activity is essential to achieve this goal?" The answers to the question are your candidate CSFs.

Tip: How Many CSFs?

To make sure you consider all types of possible CSFs, you can use Rockart's CSF types as a checklist.
• Industry - these factors result from specific industry characteristics. These are the things that the organization must do to remain competitive.
• Environmental - these factors result from macro-environmental influences on an organization. Things like the business climate, the economy, competitors, and technological advancements are included in this category.
• Strategic - these factors result from the specific competitive strategy chosen by the organization. The way in which the company chooses to position themselves, market themselves, whether they are high volume low cost or low volume high cost producers, etc.
• Temporal - these factors result from the organization's internal forces. Specific barriers, challenges, directions, and influences will determine these CSFs.

Step Three: Evaluate the list of candidate CSFs to find the absolute essential elements for achieving success - these are your Criticial Success Factors.

As you identify and evaluate candidate CSFs, you may uncover some new strategic objectives or more detailed objectives. So you may need to define your mission, objectives and CSFs iteratively.

Step Four: Identify how you will monitor and measure each of the CSFs.

Step Five: Communicate your CSFs along with the other important elements of your business or project's strategy.

Step Six: Keep monitoring and reevaluating your CSFs to ensure you keep moving towards your aims. Indeed, whilst CSFs are sometimes less tangible than measurable goals, it is useful to identify as specifically as possible how you can measure or monitor each one.



Key Points

Critical Success Factors are the areas of your business or project that are absolutely essential to its success. By identifying and communicating these CSFs, you can help ensure your business or project is well-focused and avoid wasting effort and resources on less important areas. By making CSFs explicit, and communicating them with everyone involved, you can help keep the business and project on track towards common aims and goals.

REFERENCES:

http://rapidbi.com/created/criticalsuccessfactors.html#WhatareCSFs
http://www.coursework4you.co.uk/essays-and-dissertations/critical-success-factors.php
http://en.wikipedia.org/wiki/Critical_success_factor

VISIT MY BLOG @ http://florenzie-palma.blogspot.com

Identify and discuss the steps for "critical success factors" approach? (at least 1,500 words)

CSFs (Critical Success Factor) are the essential areas of activity that must be performed well if you are to achieve the mission, objectives or goals for your business or project. By identifying your Critical Success Factors, you can create a common point of reference to help you direct and measure the success of your business or project.

Critical Success Factor is the term for an element that is necessary for an organization or project to achieve its mission. It is a critical factor or activity required for ensuring the success of your business. The term was initially used in the world of data analysis, and business analysis. For example, a CSF for a successful Information Technology (IT) project is user involvement.

A critical success factor is not a key performance indicator (KPI). Critical success factors are elements that are vital for a strategy to be successful. KPIs are measures that quantify management objectives and enable the measurement of strategic performance. A critical success factor is what drives the company forward, it is what makes the company or breaks the company. As staff must ask themselves everyday 'Why would customers choose us?' and they will find the answer is the critical success factors.

As a common point of reference, CSFs help everyone in the team to know exactly what's most important. And this helps people perform their own work in the right context and so pull together towards the same overall aims.

The idea of CSFs was first presented by D. Ronald Daniel in the 1960s. It was then built on and popularized a decade later by John F. Rockart, of MIT's Sloan School of Management, and has since been used extensively to help businesses implement their strategies and projects. Inevitably, the CSF concept has evolved, and you may have seen it implemented in different ways. This article provides a simple definition and approach based on Rockart's original ideas.

Rockart defined CSFs as:
"The limited number of areas in which results, if they are satisfactory, will ensure successful competitive performance for the organization. They are the few key areas where things must go right for the business to flourish. If results in these areas are not adequate, the organization's efforts for the period will be less than desired."

He also concluded that CSFs are "areas of activity that should receive constant and careful attention from management." Critical Success Factors are strongly related to the mission and strategic goals of your business or project. Whereas the mission and goals focus on the aims and what is to be achieved, Critical Success Factors focus on the most important areas and get to the very heart of both what is to be achieved and how you will achieve it.

The CSFs approach was applied in case studies carried out in the UK universities (Pellow & Wilson, 1993; Greene et al. 1996; Loughridge 1996). It was applied also as a component of a strategic information management (SIM) methodology put forward by Wilson (1992, 1994b). The CSFs approach was combined with the value chain concept by Porter (1985) in order to form an information audit (e.g. Ellis et al. 1993; Dimond, 1996; Buchanan & Gibb, 1998; see also Goldsmith, 1991). The methodology was tested in two case studies carried out in very knowledge-intensive sectors of Finnish industry. The process was funded by the Academy of Finland.

CRTICICAL SUCCESS FACTORS for Strategic Planning, Thinking, and Doing

1. Paradigm Shift. Shift your paradigm about organizations to one that is the largest and most inclusive by beginning with societal good in
mind. Move out of your comfort zone and consider two bottom lines:
• Positive impact on society through improved quality of life.
• Profit over long term.

2. Results vs. Methods and Means. Distinguish between ends and means. Define and plan results at the Mega, Macro, and Micro levels you desire before choosing how to achieve them.

3. Link Mega, Macro, and Micro. Use all three levels of planning and results, Mega, Macro, and Micro.

4. Measurable Objectives. Develop measurable objectives at the Mega, Macro, and Micro levels of results that are linked systemically as a value added chain. Don’t include methods and means in objectives.

5. Ideal Vision. Use an Ideal Vision as the foundation for strategic thinking and planning. Don’t be limited to your immediate organization or current paradigms.

6. Needs Are Gaps in Results. Define “needs” as a gaps in results, not as insufficient resources, means, or methods.

These critical success factors are now explained in more detail.

Paradigm Shift. Paradigms, like mental models, are the ways in which we perceive and filter reality. When the demands and pressures for
change within the organization intensify beyond just incremental changes, then it’s one indicator that a paradigm shift is imminent.We can and should shift
paradigms, even when previous paradigms are not yet failing us. Thinking about the future is not about “more of the same.” After all, the ways of thinking
that led to success yesterday can become a major barrier to creating future success.

Distinguishing between ends and means. Distinguishing between ends and means is another characteristic of a strategic thinker. Results are ends that define in measurable terms the future we want to create. Means are the methods and tactics we choose to achieve the results. It is also good sense, good logic, and good economics to define
the future desired state before selecting how you will get there. When methods, means, resources, and tactics are chosen before the problem, opportunity, and result
are defined, then we are likely to end up somewhere other than where we desire.

Link Mega, Macro and Micro. Use and link all three levels of planning and results. Each level of results focuses on a different, but related, client category.
The starting point for strategic planning—unless you aren’t concerned with the health, safety, and well-being of your clients and community—is to define the desired results at the Mega level. Planning then proceeds down the chain of results to the Macro and Micro levels. In this way the three levels of results make up a value added chain of high payoff results. After all, we want to plan for useful results before selecting any methods or means for accomplishing those results.

Measurable Objectives. We create the future twice. We achieve it the first time in our mind through imagining and dreaming, and then again through our
external accomplishments. For any useful results to be accomplished in tangible, measurable forms, first someone has to dream them. Since there are three levels of planning and associated results (Mega/Outcomes, Macro/Outputs, Micro/Products), strategic thinkers develop linked objectives for each of these in measurable terms. To
ensure we move out of our present paradigms and break the status quo, we must be bold and audacious when we set and commit to our objectives. These objectives are called Smarter objectives. These are objectives that are not based on past processes; they specify the desired future in terms of results that ought to be accomplished, irrespective of the hindrances of today. They invent in the mind’s eye and commit to action results that have not yet been achieved (nor perhaps even conceived). As such, they don’t include methods and means— the methods and means describe the options for achieving the results, not the results themselves.

Ideal Vision. It is critical that strategic thinking and planning begin by stepping outside the limits of your organization. This step involves representative stakeholders in answering some fundamental questions about the sort of world you would like to create for tomorrow’s child. The Ideal Vision expresses in measurable terms what we wish to accomplish and commit to design and create.3 It describes ends and not means, processes, procedures, resources, or methods. In Chapter Four, Preparing to Plan, the Ideal Vision as the starting place for strategic thinking is described in greater detail.

Needs are gaps in results. Define “needs” as a gap between present results and desired results, not as perceived gaps in inputs and/or processes (which are really wants). By defining needs as gaps in results, we are thinking strategically, because we are designing the long-term future to be accomplished before deciding what methods and means might create it. Terminology should be precise when describing the world to which we will expect to commit many resources.
Typically, critical success factors can be categorized into five primary categories:

1. Leadership plays a key role in ensuring success in almost any initiative within an organization. Its impact is even more pronounced because this is a relatively new discipline. Nothing makes greater impact on an organization than when leaders model the behavior they are trying to promote among employees..when the CEO notices that a particular employee has not had been active within the system, he sends a message that reads: "Dear associate, you haven't been sharing knowledge. How can we help you? All the best, Bob."
Several other best-practice organizations have demonstrated this commitment to KM. At the World Bank, the president's support led to the creation of an infrastructure that promoted and supported the growth of communities of practice (CoPs) not only throughout the organization, but also around the globe.

2. Culture is the combination of shared history, expectations, unwritten rules, and social customs that compel behaviors. It is the set of underlying beliefs that, while rarely exactly articulated, are always there to influence the perception of actions and communications of all employees.
Cultural issues concerning KM initiatives usually arise due to the following factors:
• Lack of time - The goal is not to encourage the employees to work more, but to work more effectively. The processes, technologies, and roles designed during a KM initiative must save employees' time, not burden them with more work. This can only be accomplished if the employees' work patterns are accounted for during the initial design and planning phase of the initiative.
• Unconnected reward systems - Organizations have to maintain a balance between intrinsic and explicit rewards in order to encourage employee behavior. The most effective use of explicit rewards has been to encourage sharing at the onset of a KM initiative. If the attendees don't find value in either the meetings or the information on the system, providing incentives will not sustain their participation. People share because they want to, they like to see their expertise being used, and they like being respected by their peers.
• Lack of common perspectives - Sharing must be inspired by a common vision. The people affected by the new process or technology must all buy in to this vision and believe it will work.
• No formal communication - When designing and implementing KM initiatives, ensure that employees and customers know about the changes occurring in your organization. It has been hypothesized that a person needs to hear the same message at least three times before it registers in the brain. Hence, communication should be pervasive and ingeminating. While implementing KM within your organization, market yourself. Make sure everyone knows what you are attempting to do, and build anticipation for the launch.

If your organization naturally has a tendency to share knowledge, enabling knowledge sharing becomes a little easier. If your organization harbors a knowledge-hoarding culture, don't give in to it. Remove negative consequences to sharing. People want to share their knowledge. They want others to know they are knowledgeable. Break down some of the existing barriers to knowledge sharing, and give people the tools and environment they need. By designing KM initiatives around your culture, you will be initiating a cultural change.


3. Structure, Roles, and Responsibilities
Although there are many ways that organizations structure the governance of their KM initiatives, APQC has found common elements among best-practice partner organizations: a steering committee, a central KM support group, and stewards/owners throughout the organization who are responsible for KM. It is a combination of a centralized and decentralized approach.
The steering committee usually consists of executives at the top level. They promote the concept and provide guidance, direction, and support. The central KM group is typically made up of three to four people who provide the initial support for projects or initiatives, which are usually handed over to the business owners once they are implemented. The central group usually consists of people with advanced project management, facilitation, and communication skills. The stewards, or owners, are responsible for knowledge sharing and acquisition within the business units. Like the core KM group, the stewards are change agents for the organization. They model and teach employees the principles of knowledge sharing using a common vocabulary. All of these participants work as a team to prevent a silo mentality and incorporate resistant employees in the process.
Although the structure is put in place to establish ownership and accountability, if there is no overall ownership of knowledge and learning within the organization and the leadership does not "walk the talk," it will be difficult to sustain any sharing behavior.

4. Information Technology (IT) Infrastructure
Without a solid IT infrastructure, an organization cannot enable its employees to share information on a large scale. Yet the trap that most organizations fall into is not a lack of IT, but rather too much focus on IT. A KM initiative is not a software application; having a platform to share information and to communicate is only part of a KM initiative. Following are some KM success factors related to IT.
• Approach - The people who are charged with implementing KM must take the time to understand their users' needs. Matching the KM system with the KM objectives is essential.
• Content - With a similar focus on users' needs, establishing great content involves having processes in place to acquire, manage, validate, and deliver relevant information, when and where it is needed.
• Common platforms - A standard companywide architecture ensures the sustainability and scalability of KM efforts. By understanding the organization's infrastructure at a high level, the steering committee can guide the KM team in picking the appropriate technology. Sometimes organizations realize that they need a complete overhaul of their IT infrastructure before they can expect their employees to share knowledge. Many organizations have eliminated or are in the process of phasing out customized legacy systems and replacing them with market-standard operating systems. This enables organizations to build on the existing architecture by using off-the-shelf software that was written to support these platforms, thus avoiding costly customized packages.
• Simple technology - If it takes more than three clicks to find knowledge on your system, users will get frustrated. Of course, you have to temper that with the amount of information being delivered and the complexity of information demanded by the user. Another common mistake made in information delivery is the emphasis on explicit knowledge. Although technology is primarily used to deliver explicit knowledge, placing too much emphasis on it causes the user to lose the context in which the information was shared and leads to misunderstanding on how to interpret the knowledge.
• Adequate training - KM is enabled by adequate technology and people who know how to use it. Best-practice examples reveal that the central KM group should spend most of its time (after deployment) teaching, guiding, and coaching users how to use the system to interact, communicate, and share information and knowledge with one another.

5. Measurement
Most people fear measurement because they see it as synonymous with ROI, and they are not sure how to link KM efforts to ROI. Although the ultimate goal of measuring the effectiveness of a KM initiative is to determine some type of ROI, there are many intervening variables that also affect the outcomes.
Because many variables may affect an outcome, it is important to correlate KM activities with business outcomes, while not claiming a pure cause-and-effect relationship. Increased sales may be a result not only of the sales representatives having more information, but also of the market turning, a competitor closing down, or prices dropping 10 percent. Due to the inability to completely isolate knowledge-sharing results, tracking the correlations over time is important.

Five key sources of Critical Success Factors

MAIN ASPECTS OF Critical Success Factors and their use in analysis
CSF's are tailored to a firm's or manager's particular situation as different situations (e.g. industry, division, individual) lead to different critical success factors. Rockart and Bullen presented five key sources of CSF's:

1.The industry,
Industry: There are some CSF's common to all companies operating within the same industry. Different industries will have unique, industry-specific CSF's
An industry's set of characteristics define its own CSF's Different industries will thus have different CSF's, for example research into the CSF's for the Call centre, manufacturing, retail, business services, health care and education sectors showed each to be different after starting with a hypothesis of all sectors having their CSF's as market orientation, learning orientation, entrepreneurial management style and organizational flexibility.
In reality each organization has its own unique goals so while thee may be some industry standard - not all firms in one industry will have identical CSF's.
Some trade associations offer benchmarking across possible common CSF's.

2.Competitive strategy and industry position,
Competitive position or strategy: The nature of position in the marketplace or the adopted strategy to gain market share gives rise to CSF's Differing strategies and positions have different CSF's
Not all firms in an industry will have the same CSF's in a particular industry. A firm's current position in the industry (where it is relative to other competitors in the industry and also the market leader), its strategy, and its resources and capabilities will define its CSF's
The values of an organization, its target market etc will all impact the CSF's that are appropriate for it at a given point in time.

3. Environmental factors,
Environmental changes: Economic, regulatory, political, and demographic changes create CSF's for an organization.
These relate to environmental factors that are not in the control of the organization but which an organization must consider in developing CSF's Examples for these are the industry regulation, political development and economic performance of a country, and population trends.
An example of environmental factors affecting an organization could be a de-merger

4. Temporal factors
Temporal factors: These relate to short-term situations, often crises. These CSF's may be important, but are usually short-lived.
Temporal factors are temporary or one-off CSF's resulting from a specific event necessitating their inclusion.
Theoretically these would include a firm which "lost executives as a result of a plane crash requiring a critical success factor of rebuilding the executive group".
Practically, with the evolution and integration of markets globally, one could argue that temporal factors are not temporal anymore as they could exist regularly in organizations.
For example, a firm aggressively building its business internationally would have a need for a core group of executives in its new markets. Thus, it would have the CSF of "building the executive group in a specific market" and it could have this every year for different markets.

5. Managerial position (if considered from an individual's point of view). Each of these factors is explained in greater detail below.
Managerial role: An individual role may generate CSF's as performance in a specific manager's area of responsibility may be deemed critical to the success of an organization.
Managerial position. This is important if CSF's are considered from an individual's point of view.
For example, manufacturing managers who would typically have the following CSF's: product quality, inventory control and cash control.
In organizations with departments focused on customer relationships, a CSF for managers in these departments may be customer relationship management.
HOW TO WRITE GOOD CSFs

In an attempt to write good CSFs, a number of principles could help guide writers. These principles are:

• Ensure a good understanding of the environment, the industry and the company – It was shown that CSFs have five primary sources, and it is important to have a good understanding of the environment, the industry and the company in order to be able to write them well. These factors are customised for companies and individuals and the customisation results from the peculiarity of the organisation. This peculiarity stems from an organisation's strategy, current position, and resources and capabilities.
• Build knowledge of competitors in the industry – While this principle can be encompassed in the previous one, it is worth highlighting separately as it is critical to have a good understanding of competitors as well in identifying an organisation's CSFs. Knowing where competitors are positioned, what their resources and capabilities are, and what strategies they will pursue can have an impact on an organisation's strategy and also resulting CSFs.
• Develop CSFs which result in observable differences – A key impetus for the development of CSFs was the notion that factors which get measured are more likely to be achieved versus factors which are not measured. Thus, it is important to write CSFs which are observable or possibly measurable in certain respects such that it would be easier to focus on these factors. These don't have to be factors that are measured quantitatively as this would mimic key performance indicators; however, writing CSFs in observable terms would be helpful.
• Develop CSFs that have a large impact on an organisation's performance – By definition, CSFs are the "most critical" factors for organisations or individuals. However, due care should be exercised in identifying them due to the largely qualitative approach to identification, leaving many possible options for the factors and potentially results in discussions and debate. In order to truly have the impact as envisioned when CSFs were developed, it is important to thus identify the actual CSFs, i.e. the ones which would have the largest impact on an organisation's (or individual's) performance.

Critical Success Factors are the areas of your business or project that are absolutely essential to its success. By identifying and communicating these CSFs, you can help ensure your business or project is well-focused and avoid wasting effort and resources on less important areas. By making CSFs explicit, and communicating them with everyone involved, you can help keep the business and project on track towards common aims and goals.


REFERENCES:
http://rapidbi.com/created/criticalsuccessfactors.html
http://media.wiley.com/product_data/excerpt/30/07879650/0787965030.pdf
http://en.wikipedia.org/wiki/Critical_success_factor
http://www.providersedge.com/docs/km_articles/Critical_Success_Factors_of_KM.pdf

Identify and discuss the steps for "critical success factors" approach? (at least 1,500 words)


Review:

In Critical Success Factors (CSF), you may identify the things that really matter for success of your institution.

So, what is a Critical Success Factor? Critical Success Factors (CSF’s) are the critical factors or activities required for ensuring the success your
business. The term was initially used in the world of data analysis, and business analysis.

Most smaller and more pragmatic businesses can still use CSF’s but we need to take a different, more pragmatic approach. Critical Success Factors have been used significantly to present or identify a few key factors that organizations should focus on to be successful.

As a definition, critical success factors refer to "the limited number of areas in which satisfactory results will ensure successful competitive performance for the
individual, department, or organization”.

I have read that so many important matters can compete for your attention in business that it's often difficult to see the "wood for the trees". What's more, it can be extremely difficult to get everyone in the team pulling in the same direction and focusing on the true essentials.

In That's where Critical Success Factors (CSFs) can help. CSFs are the essential areas of activity that must be performed well if you are to achieve the mission, objectives or goals for your business or project.

By identifying your Critical Success Factors, you can create a common point of reference to help you direct and measure the success of your business or project.

As a common point f reference, CSFs help everyone in the team to know exactly what's most important. And this helps people perform their own work in the right context and so pull together towards the same overall aims.


I have read the idea of CSFs that was first presented by D. Ronald Daniel in the 1960s. It was then built on and popularized a decade later by John F. Rockart, of MIT's Sloan School of Management, and has since been used extensively to help businesses implement their strategies and projects.

Inevitably, the CSF concept has evolved, and you may have seen it implemented in different ways. This article provides a simple definition and approach based on Rockart's original ideas.

Rockart defined CSFs as: "The limited number of areas in which results, if they are satisfactory, will ensure successful competitive performance for the organization. They are the few key areas where things must go right for the business to flourish. If results in these areas are not adequate, the organization's efforts for the period will be less than desired."

He also concluded that CSFs are "areas of activity that should receive constant and careful attention from management."

Critical Success Factors are strongly related to the mission and strategic goals of your business or project. Whereas the mission and goals focus on the aims and what is to be achieved, Critical Success Factors focus on the most important areas and get to the very heart of both what is to be achieved and how you will
achieve it. Using the Tool: Summary Steps

In reality, identifying your CSFs is a very iterative process. Your mission, strategic goals and CSFs are intrinsically linked and each will be refined as you developthem. Here are the summary steps that, used iteratively, will help you identify the CSFs for your business or project:
Step One:
Establish your business's or project's mission and strategic goals (click here for help
doing this.)

Step Two:
For each strategic goal, ask yourself "what area of business or project activity is essential to achieve this goal?" The answers to the question are your candidate CSFs.

Step Three: Evaluate the list of candidate CSFs to find the absolute essential elements for achieving success - these are your Criticial Success Factors.
As you identify and evaluate candidate CSFs, you may uncover some new strategic objectives or more detailed objectives. So you may need to define your mission,
objectives and CSFs iteratively.

Step Four:
Identify how you will monitor and measure each of the CSFs.

Step Five:
Communicate your CSFs along with the other important elements of your business or project's strategy.

Step Six:
Keep monitoring and reevaluating your CSFs to ensure you keep moving towards your aims. Indeed, whilst CSFs are sometimes less tangible than measurable
goals, it is useful to identify as specifically as possible how you can measure or monitor each one.

Key Points

Critical Success Factors are the areas of your business or project that are absolutely essential to its success. By identifying and communicating these CSFs, you can help ensure your business or project is well-focused and avoid wasting effort and resources on less important areas. By making CSFs explicit, and communicating them with everyone involved, you can help keep the business and project on track towards common aims and goals.

The following are main aspects of critical success factors and their use in analysis CSF's are tailored to a firm's or manager's particular
situation as different situations.

The Industry Critical success factor	Industry: There are some CSF's common to all companies operating within the same industry. Different industries will have unique, industry-specific CSF's An industry's set of characteristics define its own CSF's Different industries will thus have different CSF's, for example research into the CSF's for the Call centre, manufacturing, retail, business services, health care and education sectors showed each to be different after starting with a hypothesis of all sectors having their CSF's as market orientation, learning orientation, entrepreneurial management style and organizational flexibility. In reality each organization has its own unique goals so while thee may be some industry standard - not all firms in one industry will have identical CSF's. Some trade associations offer benchmarking across possible common CSF s.
Competitive strategy and industry position Critical success factor	Competitive position or strategy: The nature of position in the marketplace or the adopted strategy to gain market share gives rise to CSF's Differing strategies and positions have different CSF's Not all firms in an industry will have the same CSF's in a particular industry. A firm's current position in the industry (where it is relative to other competitors in the industry and also the market leader), its strategy, and its resources and capabilities will define its CSF's The values of an organization, its target market etc will all impact the CSF's that are appropriate for it at a given point in time.
Environmental Factors Critical success factor	Environmental changes: Economic, regulatory, political, and demographic changes create CSF's for an organization. These relate to environmental factors that are not in the control of the organization but which an organization must consider in developing CSF's Examples for these are the industry regulation, political development and economic performance of a country, and population trends. An example of environmental factors affecting an organization could be a de-merger.
Temporal Factors Critical success factor	Temporal factors: These relate to short-term situations, often crises. These CSF's may be important, but are usually short-lived. Temporal factors are temporary or one-off CSF's resulting from a specific event necessitating their inclusion. Theoretically these would include a firm which \"lost executives as a result of a plane crash requiring a critical success factor of rebuilding the executive group\". Practically, with the evolution and integration of markets globally, one could argue that temporal factors are not temporal anymore as they could exist regularly in organizations. For example, a firm aggressively building its business internationally would have a need for a core group of executives in its new markets. Thus, it would have the CSF of \"building the executive group in a specific market\" and it could have this every year for different markets.
Managerial Position Critical success factor	Managerial role: An individual role may generate CSF's as performance in a specific manager's area of responsibility may be deemed critical to the success of an organization. Managerial position. This is important if CSF's are considered from an individual's point of view. For example, manufacturing managers who would typically have the following CSF's: product quality, inventory control and cash control. In organizations with departments focused on customer relationships, a CSF for managers in these departments may be customer relationship management.

A Critical Success Factor Method
Start with a vision:

• Mission statement
  
• Develop 5-6 high level goals
  
• Develop hierarchy of goals
  and their success factors
  
• Lists of requirements,
  problems, and assumptions
  
• Leads to concrete
  requirements at the lowest level of decomposition (a single, implementable idea) Along the way, identify the problems being solved and the
  assumptions being made Cross-reference usage scenarios and problems with requirements
  
• Analysis matrices
  
• Problems vs. Requirements
  matrix
  
• Usage scenarios vs.
  Requirements matrix
  
• Solid usage scenarios
  
• Relationship to Usage
  Scenarios
  
• Usage
  scenarios or "use cases"; provide a means of determining:
  
  
  
  • Are the requirements
    aligned and self-consistent?
    
  • Are the needs of the
    user being met as well as those of the enterprise?
    
  • Are
    the requirements complete
    
  
  
• Results of the Analysis
  

Reference:
http://www.mindtools.com/pages/article/newLDR_80.htm
http://rapidbi.com/created/criticalsuccessfactors.html

Identify and discuss the steps for "critical success factors" approach?

In establishing a goal in every endeavor we have, there are things that should need to be considered. With the different issues and circumstances to occur during the process, it is very important to have focus and well plan to assist the situation in any ways. The doers or actors should be open to any possible happenings, positive or not, to be made and to encounter later on. Problems should have a solution and has always a solution, the only thing is, and at least one should have anticipated the happenings to be able to come up with a better and suitable solution.
Any organization inherently possesses a mission which states why it exists and a vision which states where it is headed. In order to achieve the mission of an organization, all of the members of that particular organization should participate and contribute for the achievement of the goals and objectives of the organization as a whole. As our professor once said, every member should embrace the “one and only game plan” of the organization or else the organization will find it hard if not impossible to succeed. In addition, the organization must consistently concentrate on the key areas to achieve the mission. These key areas can be different from each organization depending on the type of organization and the type of industry that they are in. These key areas are what we call as the organization’s critical success factors. In the world of business, there are so many things that need to be noticed. With a lot of issues in the organization that gains your attention, it is quite difficult to oversee them all and take charge all at once. There is a tendency that you might not also notice some important matters and it will be left behind. This is one of the reasons why you are not alone in doing business; you have your colleagues and business associates which may help you in looking after the concerns of the company. But it could also be difficult for you to get them into looking at the same directions and share with your concerns and eventually get them into action. This is probably the reason why there are “critical success factors” being set in the organization.

These are the Most Critical Success Factors:
- Money: positive cash flow, revenue growth, and profit margins.
- Your future: Acquiring new customers and/or distributors.
- Customer satisfaction: How happy they are.
- Quality: How good is your product and service?
- Product or service development: What's new that will increase business with existing customers and attract new ones?
- Intellectual capital: Increasing what you know is profitable.
- Strategic relationships: New sources of business, products and outside revenue.
- Employee attraction and retention: Your ability to extend your reach.
- Sustainability: Your personal ability to keep it all going.

Academic Background/ History
The principle of identifying critical success factors as a basis for determining the information needs of managers was proposed by RH Daniel (1961 Harvard Business Review - HBR) as an interdisciplinary approach with a potential usefulness in the practice of evaluation within library and information units but popularized by F Rockart (1979 Harvard Business Review - HBR). In time many academics have applied the methodology increasingly outside the educational establishment.
The idea is very simple: In any organization certain factors will be critical to the success of that organization, in the sense that, if objectives associated with the factors are not achieved, the organization will fail - perhaps catastrophically so.
The following as an example of generic CSF's:
• New product development,
• Good distribution, and
• Effective advertising
Factors that remain relevant today for many organizations.

Five Key Sources of Critical Success Factors
MAIN ASPECTS OF Critical Success Factors and their use in analysis
CSF's are tailored to a firm's or manager's particular situation as different situations (e.g. industry, division, individual) lead to different critical success factors. Rockart and Bullen presented five key sources of CSF's:
1.The industry,
2.Competitive strategy and industry position,
3.Environmental factors,
4.Temporal factors, and
5.Managerial position (if considered from an individual's point of view). Each of these factors is explained in greater detail below.
An element of organizational activity which is central to its future success. Critical success factors may change over time, and may include items such as product quality, employee attitudes, manufacturing flexibility, and brand awareness. This can enable analysis.

Critical Success Factor
Any of the aspects of a business that are identified as vital for successful targets to be reached and maintained. Critical success factors are normally identified in such areas as production processes, employee and organization skills, functions, techniques, and technologies. The identification and strengthening of such factors may be similar. Is a business term for an element which is necessary for an organization or project to achieve its mission. For example, a CSF for a successful Information Technology (IT) project is user involvement. In the Re.ViCa project a critical success factor is defined as follow:
A critical success factor is a factor whose presence is necessary for an organization to fulfill its mission - in other words, if it is not present then its absence will cause organizational and/or mission failure. Those are just some of various definitions that we could find when we will try to look for the critical success factors. The idea of identifying critical success factors as a basis for determining the information needs of managers was proposed by Daniel (1961) but popularized by Rockart (1979). The idea is very simple: in any organization certain factors will be critical to the success of that organization, in the sense that, if objectives associated with the factors are not achieved, the organization will fail - perhaps catastrophically so. Rockart (1979: 85), by referring to Daniel (1961), gives the following as an example of the CSFs: new product development, good distribution, and effective advertising for the food processing industry - factors that remain relevant today for many firms. As we start to discuss the Critical Success Factors, it is important to realize that the specific factors relevant for you will vary from business to business and industry to industry. The key to using Critical Success Factors effectively is to ensure that your definition of a factor of your organizations activity which is central to its future will always apply. Therefore success in determining the Critical Success Factors for your organization is to determine what is central to its future and achievement of that future. Critical Success Factors are the critical factors or activities required for ensuring the success your business. The term was initially used in the world of data analysis, and business analysis. Critical Success Factors have been used significantly to present or identify a few key factors that organizations should focus on to be successful. As a definition, critical success factors refer to "the limited number of areas in which satisfactory results will ensure successful competitive performance for the individual, department, or organization”. Inevitably, the CSF concept has evolved, and you may have seen it implemented in different ways. Critical Success Factors are strongly related to the mission and strategic goals of your business or project. Whereas the mission and goals focus on the aims and what is to be achieved, Critical Success Factors focus on the most important areas and get to the very heart of both what is to be achieved and how you will achieve it. The term “Critical Success Factor” is used differently, due to ambiguity of the word “critical”. But whichever definition we may use, just be sure it is understood by all the managers.

Four Basic Types Of Critical Success Factor:
1. Industry - resulting from specific industry characteristics;
2. Strategy - resulting from the chosen competitive strategy of the business;
3. Environmental - resulting from economic or technological changes; and
4. Temporal - resulting from internal organizational needs and changes.
It is said that things that are measured get done more often than things that are not measured. Each CSF should be measurable and associated with a target goal. It’s not necessarily that you need exact measures to manage. Primary measures that should be listed include critical success levels or, in cases where specific measurements are more difficult, general goals should be specified. Identifying Critical Success Factors is important as it allows firms to focus their efforts on building their capabilities to meet the CSF's, or even allow firms to decide if they have the capability to build the requirements necessary to meet Critical Success Factors.

How to Identify the Critical Success Factors
1. Identify your predicament. Identifying the critical success factors of your business starts with determining the roadblocks or challenges that may hinder your company's ability to grow and fulfill its goals. These roadblocks can be internal (i.e., company politics or employee dissatisfaction) or external (i.e., economic policies, political climate that affects business, etc.).
2. Create a strategic plan. Identifying the challenges that your business is faced with will help in developing a strategic plan that sufficiently addresses these hindrances. A strategic plan is one that will cover these roadblocks and help the organization anticipate them.
3. Understand your targeted customers. To fulfill your business goals, you need to learn more about the behavior of your targeted consumers. This means understanding the demographic of someone who is more likely to avail your product or service.
4. Compare your service with your competition. You want to assess how you serve this market niche in relation to your direct competitors to find out how your product is faring among other brands. Identify what your consumers expect from your product and then find out if your product is actually delivering according to these expectations. Look at other brands and do the same analysis.
5. Examine the competition on the basis of how they operate. After looking at how your competitors serve your targeted market, you now move onto analyzing how the competing brands produce their products. Examine quality control metrics, performance and production cycles. A look at a particular product's ingredients, for instance, will shed some light as to its . Compare these practices with your own way of producing your merchandise and identify the shortcomings of the competition's strategy.
6. Adjust your production strategies as needed. Looking at how your competitors produce the same product will allow you to determine the weaknesses of your own strategy. If a competitor, for instance, is able to provide the same product at a significantly lower price, then it stands to reason that you may have issues with the efficient use of production resources. Look at how you can cut down costs of production without sacrificing the quality of your product. This will become one of your critical success factors: improving production efficiency.

Steps for Critical Success Factor Approach
Based on what I have understood and read, I come up with some steps for critical success factors. These are the following steps. First, start with a vision and a mission statement. Second, develop a high level and hierarchy of goals and their success factors. Next, list of requirements, problems, and assumptions. Then, analysis matrices. Afterwards, solid usage scenarios. And finally, the result of the analysis.
Start with a vision and a mission statement. Every organization has its own unique vision and mission that they want to follow. It is important to know what are the firm’s vision and mission before you can start pointing out the firm’s critical success factor.

Develop high level and hierarchy of goals and their success factors. It is always good to know the goals of the organization since critical success factor is a step in ensuring the organizations success. With critical success factor, you are focusing on what the company aims in the future and if the firm is able to achieve those goals and dreams that was already a success.
List of requirements, problems, and assumptions. It is necessary to gather all the data and information with regards to the organization, site all the problems that the organization are facing or might be facing in the future, and identify the following assumptions on how to the company will get over with those problems.
Analysis matrices. Part of these analysis matrices is the problem versus requirements matrix and the usage scenarios versus requirements matrix. You have to know if all the requirements you have gathered are consistent enough. Analyze if the requirements are completed and appropriate. Analyze the problems and set some solutions on how to solve those problems. Examine if the needs of the company has been cope up. And evaluate how the company gain success would in the future.
Solid Usage Scenarios. Usage scenarios or in other words “use cases” which is very much familiar when using unified modeling language. This provides an idea on determining if the requirements are aligned and self-consistent, if the needs of the user being met as well as those of the enterprise, and if the requirements are complete.
Result of the Analysis. After having a couple of analysis, you can now list what are the things that can be considered as critical for the success of the organization. You will know the factors that would benefit and affect for the success of the firm.

Every firm has its own critical success factors. It depends on their strategy on how they can obtain success. Example of a critical success on an organization are the training and education, quality data and reporting, management commitment, customer satisfaction, staff orientation, role of the quality department, communication to improve quality, and continuous improvement. There may be several of critical success factors but it is necessary that you have to make sure that it is in line with the organizations vision, mission and goals. If the organization has achieved its goals, you can already declare that the organization has succeeded. In some cases, companies want to complete a project successfully that could be a big benefit for the company’s success. As what I have read, there has been a research that shows that there are critical success factors that should be applied to complete a project successfully. This includes the following: Match changes to vision, Define crisp deliverables, Business need linked to vision, have a formal process to define vision, and organizational culture supports project management. Critical Success factor is necessary for an organization in order to fulfill its mission. Without critical success factor, it will definitely cause organizational and/or mission failure. No one wants an organization to fail, everyone aims to succeed.

In general, to identify the critical success of an organization in every project or new activity the company will engage, it is a must because it has a big factor and influence to the success of the effort. By identifying it, the organization can have a wider focus in those critical factors and consider it during the start of the process. Critical success factors (CSFs) provide the critical points which serve as target points for the organization to achieve their goals.