critical success factor analysis

7/28/2019 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]


Temporal[delete as

appropriate]


Temporal[delete asappropriate]


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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critical success factor analysis

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