Critical Success Factors

Critical Success Factors (CSFs) are basically those that play an important role in the success of an organisation. We must know that it is very important for organisations which really matter in the success of that organization. CSFs as they are popularly known are the essential areas of activity that must be Critical Success performed well if one is to achieve the mission, objectives or goals for ones

Factors (CSFs)

organisation or project (www.mindtools.com) If one is able to identify the are an important

CSFs one can easily create a common reference point, which will in turn help tool for implementing direct and measure the success of ones organization or project. This strategies in the becomes important as everyone in the organization will know what exactly organization.is important and will work in ones own way in reaching the goal. D. Ronald Daniel in the 1960s floated the idea of CSFs and the credit of making it popular goes to John F.Rockart of MITs Sloan School of Management. This has now became an important tool for implementing strategies in the organisation.

Definition

According to Rockhart CSF is defined 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”.(Source : www.mindtools.com)

He also concluded that CSFs are “areas of activity that should receive constant and careful attention from the management”.The main focus of CSFs is on the most important areas and to get into the details of what is to be achieved and how it is to be achieved.Let us take a hypothetical example to understand the concept. We will take the example of an organization dealing in distribution of power. Figure  shows the elements involved in strategic implementation.We must understand here that a limited number of CSFs should be used to avoid complications.

Relationship of CSF with Mission and Goals

The stepwise process of identifying the CSFs:Identifying the CSFs and implementing it as a strategic tool involves five step process. These steps are as follows:

Step 1: Establishing the mission and strategic goals possible.

Step 2: Identifying the CSFs to achieve the set goal.

Step 3: Evaluating the list of possible CSFs to absolute essentials.

These are the actual CSFs.

Step 4: Monitoring and measuring each CSF.

Step 5: Continuous monitoring and re-evaluation of CSFs to ensure that the right track is being followed to achieve the set goals.

Role of CSFs in Performance Benchmarking  CSF is an essential part in ensuring the success of a product or a process.

As we have discussed that CSFs are an essential part in ensuring the success of a product or a process. It is true that they play an important role in evaluating the performance of an individual or an organization. CSFs are an integral part of the benchmarking process as they help in understanding and identifying the areas, which need more importance and the areas which need less importance. This in turn helps in avoiding duplication of efforts and in turn helping in saving the time. When we identify the gaps in the benchmarking process while comparing the results, the role of CSFs come into play. These gaps can be covered up by identifying the CSFs and working on them to achieve the competitive edge. It can well be said that identifying the CSFs and communicating them with everyone will help in keeping the project or process on track and in turn will help in achieving the common goals of the organisation.To harness and get the benefits of any initiative, it is important to define and adhere to certain basic success factors. In benchmarking exercise also, there are certain critical success factors and it is important to ensure that:

• Benchmarking is a management tool so senior managers should not only support it but should be committed to continuous improvements.

• The benchmarking exercise should be done by teams, preferably cross functional team.

• The team should have a clear picture of their organisation’s performance and subsequently the team should approach others for comparisons.

• The teams should have the right skills and competencies and enabling environment so as to have access to training, advice and guidance over the course of exercise.

• The objectives of the exercise should be clearly defining in the beginning.•

The scope of the work of benchmarking exercise should be clearly defined in the beginning keeping in the mind the objectives, available resources along with the experience and skill level of human resources and time available.