CRITICAL SUCCESS FACTOR (CSF) ANALYSIS (part 1 0f 2)
Mostly for businesses, this methodology was developed by John Rockart in the 1970s.
CEOs need to know what is critically important for the success of the organisation. By identifying these and stating them clearly, they can remain focused on what really matters.
CSFs are the areas on which results, if they’re satisfactory, will ensure competitive successful performance of whatever you’re doing. They are the vital things that must go right for you to succeed.
Sources of CSFs:
1. The industry- each industry has its own distinct CSFs. e.g. in banking customer confidence is critical.
2. The company itself and its position withing the industry-The company’s competitive strategy in the industry will influence what is critical e.g actions take by a large dominant company in an industry may provide one or more CSFs to the smaller companies.
3. The environment- Use PEST analysis to identify possible CSFs e.g. what is critical in economic booms is different from what is different in economic recessions.
4. Temporal Organisational Factors- These are the areas of company activity that raise concern because they need attention in the short term e.g. too much or too little stock may generate a temporary CSF.
Once you identify the CSF(s), set up a performance indicator for each CSF. These are measured targets for CSFs and are used to monitor the actual success of each CSF.
Once the CSF and its corresponding performance indicators have been pointed out, CSF analysis may begin: