Critical Success Factors: Vital for Targets to be Reached
What makes one project more successful than another? Why does one project turn out well and another one completely flops? Such questions are common among project managers because understanding what influences success is crucial.
A majority of projects find themselves dealing with limited time and money. One reason is that you might have too many things to work on such that some elements slip through the cracks. Also, getting every team member to pull in the same direction is not always easy.
Critical success factors (CSFs) can help. CSFs make it easy for team members to focus on the critical aspects, thereby improving the project management process.
What is Critical Success Factors (CSFs)?
A critical success factor (often abbreviated “CSF”) is a high-level objective that contributes to a company’s bottom line. It’s a vital area of activity that a business must perform to attain the established objectives.
Critical success factors create a point of reference for team members to follow. Therefore, the organisation has a way to measure success.
Critical Success Factors Definition
“Defined factors in a project critical to the project achieving its mission or goals. Every team member must understand the key success factors (KSFs)”D. Ronald Daniel was the first to present the concept of CSFs in the 1960s in his article ‘Management Information Crisis.’ He later became the managing director of the management consultancy company McKinsey and Co. However, the idea didn’t gain popularity until two decades later when John F. Rockart of MIT built on it.
Critical Success Example
For the best results with CSFs, companies must know how to distinguish them from missions. A project or business mission is about what to achieve. On the other hand, a critical success factor targets specific areas.
What are examples of key success factors?
Critical Success Example: A company that sets an objective to maintain a customer satisfaction rate of 96%. One critical success factor for such a goal would be to improve the training of customer representatives and ensure the service is customer-focused.
Critical Success Example: Increase local market share by x percentage. Attract new customers. How will you be more competitive against other local stores? What will make people use you over other businesses?
Types of Critical Success Factors
Businesses must also learn the different kinds of CSFs to make an informed decision about the most suitable one.
Industry Critical Success Factors (CSF’s): Comprise aspects that are specific to a particular sector. They are efforts that an enterprise must fulfil to remain competitive in a given industry.
Strategy Critical Success Factors (CSF’s): refer to elements that are based on an organisation’s competitive strategy such as the marketing plan used for branding.
Environmental Critical Success Factors (CSF’s) : Result from the influences of a specific setting on your company. They include the competition, business climate and technological advancements, among others.
Temporal Critical Success Factors (CSF’s): Usually have a short lifespan and are based on the internal changes in an enterprise. The factors are determined by the company’s direction, influences and challenges.
Why are Critical Success Factors Important?
Whether you are determining CSFs for a certain project or company objective, you should be aware of the benefits that they come with.
- One advantage of CSFs is that they eliminate unrelated performance measures. When a project has too much going on, it is easy to get sidetracked with elements that don’t contribute much to the objectives. With well-defined factors to guide the project, team members know where to direct their efforts.
- The aim of setting CSFs is to boost the chances of project success. So, if you get the factors right, then you can expect positive results. CSFs give employees a better understanding of the established goals. Workers also know what needs to be done to attain those objectives.
- CSFs contribute to improved resource allocation. When you know the key performance areas, then you can determine what they need. Therefore, the project manager can prioritise the required resources and apportion them efficiently.
As project leaders and team members learn how to best use resources and where to concentrate their efforts, a company enjoys cost savings. Reduced time and resource wastage plus enhanced team productivity allow a business can slash costs on different fronts.
Critical success factors to achieve business goals you need to be aware of:
Key success factors (KSF): r A critical element that is necessary for a project to achieve its goals/mission.
Key result area (KRA): Specific factors each department or employees will focus on but they must understand their role and responsibilities.
Key Success Area (KSA): Another name for a critical success factor.
Critical success criteria (CSC): What exactly qualifies the goal / mission as a success/achieved.
Critical Success Factors and Key Performance Indicators
Often mistaken for being the same thing the two are not the same but based on two different factors, cause and effect. So, what is the difference between critical success factors and key performance indicators?
The difference between CSFs and KPIs:
CSF Critical Success Factors: Cause of Success – What you need to do to become a success.
KPI Key Performance Indicators : Effect of Actions – Measurement if you are successful or not.
The two are linked together as they are reliant on each other.
What are the 5 critical success factors?
Determine which factors are core to achieving your long-term business goals:
Skills: Are the skills available within the business to achieve your set goal? Is additional training required or do you need to recruit a new team member?
Communication: Communication is key in any project. How will each team member communicate problems, successes and between each other and be able to track that process?
Planning: How will it be executed, by whom and why is it important. Know how you are going to achieve business goals with a clear plan of execution.
Team Work: Collaboration and teamwork if critical for success. Discussing ideas and taking on other people opinions is a great way to achieve success.
Process: All business rely on business process for success. Business processes are specific sequence of task and activities that your business need to perform to produce a product or service.
Help Achieve Business Goals
Critical success factors can help achieve positive results for different projects. They are also useful to an organisation as a whole.
Here at Checkify we can help your business achieve better improved running of business processes. Business processes are how your business runs and why it is a success. Documenting and refining these processes can increase profit, reduce mistakes and increase productivity.
Try Checkify business process management (BPM) software (BPMS) which give you guided checklists for everyone to follow and improve workflow.
BPMS, BPM or iBPMS so may acronyms but what on Earth do they all mean and what do they to
What makes businesses successful is the way you do things. The way your business works, how it is efficient and