Critical Success Factor Analysis
Transcript of Critical Success Factor Analysis
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CRITICAL SUCCESS
FACTOR ANALYSIS
Protected by
Mahmoud Elamdhoun
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Mahmoud Elamdhoun
AGENDA
What is a Critical Success Factor
How are they important to your business
Types of Critical Success Factor
Using the term
Five key sources of Critical Success Factors
A Critical Success Factor Method
Examples of Critical Success factors
Critical success factor analysis
Value chain as a basis of critical success factor analysis
Critical Success Factor & their analysis in projects
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WHAT IS A CRITICAL SUCCESS FACTORCritical Success Factors ( CSFs( 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 businessanalysis .
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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 therequirements necessary to meet Critical Success
Factors (CSF's .)
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TYPES OF CRITICAL SUCCESS FACTOR
There are four basic types of CSF's
They are:
Industry CSF's resulting from specific industry characteristics;
Strategy CSF's resulting from the chosen competitive strategy of the business;
Environmental CSF's resulting from economic or technological changes; and
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'tneed exact measures to manage. Primary measures that should be listed includecritical success levels (such as number of transactions per month) or, in caseswhere specific measurements are more difficult, general goals should bespecified (such as moving up in an industry customer service survey).
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Critical Success Factor
an element of organizational activity which is
central to its future success. Critical success
factors may change over time, and may includeitems such as product quality, employee attitudes,
manufacturing flexibility, and brand awareness.
This can enable analysis .
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USING THE TERM The term Critical Success Factor is used differently, due to ambiguity of the word
critical,back and forth translations into other languages and interpretation when analyzed inportfolios:
Definition 1: critical = important, key, determining, vital, strategic, etc .
Definition 2: critical = alarming, anxious, etc. )as shown within the diagram= DAWN :)
1.
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FIVE KEY SOURCES OF CRITICAL SUCCESS
FACTORS
MAIN ASPECTS OF Critical Success Factorsand their use inanalysisCSF's are tailored to a firm's or manager's particular situation asdifferent situations (e.g. industry, division, individual) lead to differentcritical success factors. Rockart and Bullen presented five key sourcesof 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 .
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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 theassumptions being made Cross-reference usage scenarios and problems withrequirements
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
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EXAMPLES OF CRITICAL SUCCESS FACTORS
Statistical research into CSFs on organizations has shownthere to be seven key areas. These CSF's are:
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
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CRITICAL SUCCESS FACTOR ANALYSIS
The key question isWhat are the critical success factors of your strategy?Nowyou may say Hey, we have that kind of list already!. Most of the critical successfactor lists Ive seen are truly lame. Really, theyre same type as the traditionalstatement Our employees are our key success factor. Yes, thats very criticalsuccess factor, but not really precise .What kind of employees and which part oforganization ?A real deep dive to critical success factors really pay off whenexecuting your strategy .
This is how it basically goes: Split any of your critical success factor in to threeparts: 1)Assets needed to manage the factor, 2) Capabilities people neededto execute the factor and 3) Systems (not IT) needed for managing the businessprocess of that particular critical part. If you compare those individual factors toyour best competitor or to market ideal youll find the gaps to them. Based on thegap analysis you are able to define the precise areas where key strategic
initiatives are needed.
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CRITICAL SUCCESS FACTOR ANALYSIS
This spring Ive noticed that it is worth of considering tointegratestrategy mapsandbalanced scorecardthinking forabove described method. At least a simple strategy map isgood solution to communicate growth, process, customerand financial perspectives of the defined strategic initiatives.
Splitting the success factors into three pieces, analyzing thegap and executing initiatives to reach the gaps that yourcompetitors have and pass them. Add P&L, risk analysis, gotrough at least couple scenarios and finally map yourstrategy and there you are. Simple, very efficient and easy
to communicate.
http://hbswk.hbs.edu/item/3888.htmlhttp://clarification.wordpress.com/2008/01/21/marching-orders/http://clarification.wordpress.com/2008/01/21/marching-orders/http://hbswk.hbs.edu/item/3888.html -
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VALUE CHAIN AS A BASIS OF CRITICAL
SUCCESS FACTORANALYSIS A while ago Iwroteabout strategy execution and mentioned a method Ive been
using for a while. Last week I was asked how to choose factors that will make adifference?
One very good option is to draft a detailedvalue chaindescribing all the phasesof your markets. It can be based onMichael E. Porters generic value chain, butas said, detailed enough to illustrate your markets and steps of your business.
http://enduragement.wordpress.com/2008/05/13/critical-success-factor-analysis-as-a-tool-for-strategy-execution/http://en.wikipedia.org/wiki/Value_chainhttp://drfd.hbs.edu/fit/public/facultyInfo.do?facInfo=bio&facEmId=mporter%40hbs.eduhttp://drfd.hbs.edu/fit/public/facultyInfo.do?facInfo=bio&facEmId=mporter%40hbs.eduhttp://en.wikipedia.org/wiki/Value_chainhttp://enduragement.wordpress.com/2008/05/13/critical-success-factor-analysis-as-a-tool-for-strategy-execution/ -
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After illustrating the value chain, you have to point out the most important issuesto successfully serve customer needs in every step. Depending on the numberof phases you may come up with 30-50importantissues. Big number ofimportant issues is not bad at all. Actually, it is quite healthy not to be too criticalat this point filtering comes later.
Next task is to identify factors, where you really have to excel in order to addvalue. These are the criticalones. You may come up with 5-7 critical successfactors that really make a difference. It is good to notice, that all of yourcompetitors are in the same value chain, and may also have pointed out thesame critical factors. Therefore differentiation in operative decisions has a greatimportance. The devil is in the details.
Using value chain analysis has at least two very clear advantages. 1) You focusonly to core of your business and 2) You focus to points that add value for allstakeholders in the value chain.
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CRITICAL SUCCESS FACTOR & THEIR ANALYSIS
IN PROJECTS
Research has shown that to complete a project successfully the following critical success factorsapply:
Match Changes to Vision Define Crisp Deliverables Business Need Linked to Vision Have a Formal Process to Define Vision Organizational Culture Supports Project Management
You can have all of the above elements, but if you lack an engaged and involved businesssponsor, your chances for success are greatly lessened. According to a recent Gartner Institute study, 50% of all projects were delivered above schedule
and/or budget. Many projects were delivered with significant functionality missing, often cancelled after
requirements definition. In 2001, the Gartner group updated their research to include lack of executive sponsorship as a
major contributor to project failures.
According to a 2000 Standish Group Report, the top success factors for projects were as follows.
The list is in decreasing order of percentage factors responsible for success.% - Success Factors
18% Executive support 16% User involvement 14% Experienced project manager 12% Clear business objectives 10% Minimized scope 8% Standard software infrastructure
6% Firm basic requirements 6% Formal methodology
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Critical Success Factor analysis - Template 1
Critical Success Factors for __________________ Dated
____________Primary Measures &
TargetsSource of CSF Critical Success
Factor
Industry, Strategy, Environmental,
Temporal[delete as
appropriate]
Industry, Strategy, Environmental,
Temporal[delete as
appropriate]
Industry, Strategy, Environmental,
Temporal[delete asappropriate]
Industry, Strategy, Environmental,
Temporal[delete as
appropriate]
Industry, Strategy, Environmental,Temporal[delete as
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REFERENCE
http://rapidbi.com/created/criticalsuccessfact
ors.html
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