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Tuesday, December 22, 2009

MIS2- Assign6 :)

CSFs (Critical Success Factor) are the essential areas of activity that must be performed well if you are to achieve the mission, objectives or goals for your business or project. By identifying your Critical Success Factors, you can create a common point of reference to help you direct and measure the success of your business or project.

Critical Success Factor is the term for an element that is necessary for an organization or project to achieve its mission. It is a critical factor or activity required for ensuring the success of your business. The term was initially used in the world of data analysis, and business analysis. For example, a CSF for a successful Information Technology (IT) project is user involvement.

A critical success factor is not a key performance indicator (KPI). Critical success factors are elements that are vital for a strategy to be successful. KPIs are measures that quantify management objectives and enable the measurement of strategic performance. A critical success factor is what drives the company forward, it is what makes the company or breaks the company. As staff must ask themselves everyday 'Why would customers choose us?' and they will find the answer is the critical success factors.

As a common point of reference, CSFs help everyone in the team to know exactly what's most important. And this helps people perform their own work in the right context and so pull together towards the same overall aims.

The idea of CSFs was first presented by D. Ronald Daniel in the 1960s. It was then built on and popularized a decade later by John F. Rockart, of MIT's Sloan School of Management, and has since been used extensively to help businesses implement their strategies and projects. Inevitably, the CSF concept has evolved, and you may have seen it implemented in different ways. This article provides a simple definition and approach based on Rockart's original ideas.

Rockart defined CSFs 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."

He also concluded that CSFs are "areas of activity that should receive constant and careful attention from management." Critical Success Factors are strongly related to the mission and strategic goals of your business or project. Whereas the mission and goals focus on the aims and what is to be achieved, Critical Success Factors focus on the most important areas and get to the very heart of both what is to be achieved and how you will achieve it.

The CSFs approach was applied in case studies carried out in the UK universities (Pellow & Wilson, 1993; Greene et al. 1996; Loughridge 1996). It was applied also as a component of a strategic information management (SIM) methodology put forward by Wilson (1992, 1994b). The CSFs approach was combined with the value chain concept by Porter (1985) in order to form an information audit (e.g. Ellis et al. 1993; Dimond, 1996; Buchanan & Gibb, 1998; see also Goldsmith, 1991). The methodology was tested in two case studies carried out in very knowledge-intensive sectors of Finnish industry. The process was funded by the Academy of Finland.

CRTICICAL SUCCESS FACTORS for Strategic Planning, Thinking, and Doing
1. Paradigm Shift. Shift your paradigm about organizations to one that is
the largest and most inclusive by beginning with societal good in
mind. Move out of your comfort zone and consider two bottom lines:
• Positive impact on society through improved quality of life.
• Profit over long term.

2. Results vs. Methods and Means. Distinguish between ends and means.
Define and plan results at the Mega, Macro, and Micro levels you
desire before choosing how to achieve them.

3. Link Mega, Macro, and Micro. Use all three levels of planning and
results, Mega, Macro, and Micro.

4. Measurable Objectives. Develop measurable objectives at the Mega,
Macro, and Micro levels of results that are linked systemically as a
value added chain. Don’t include methods and means in objectives.

5. Ideal Vision. Use an Ideal Vision as the foundation for strategic thinking
and planning. Don’t be limited to your immediate organization or
current paradigms.

6. Needs Are Gaps in Results. Define “needs” as a gaps in results, not as
insufficient resources, means, or methods.

These critical success factors are now explained in more detail.

Paradigm Shift. Paradigms, like mental models, are the ways
in which we perceive and filter reality. When the demands and pressures for
change within the organization intensify beyond just incremental changes,
then it’s one indicator that a paradigm shift is imminent.We can and should shift
paradigms, even when previous paradigms are not yet failing us. Thinking
about the future is not about “more of the same.” After all, the ways of thinking
that led to success yesterday can become a major barrier to creating future
success.

Distinguishing between ends and means. Distinguishing between ends and means is another characteristic of a strategic thinker. Results are ends that define in measurable terms the future we want to create. Means are the methods and tactics we choose to
achieve the results. It is also good sense, good logic, and good economics to define
the future desired state before selecting how you will get there. When methods,
means, resources, and tactics are chosen before the problem, opportunity, and result
are defined, then we are likely to end up somewhere other than where we desire.

Link Mega, Macro and Micro. Use and link all three levels of planning and
results. Each level of results focuses on a different, but related, client category.
The starting point for strategic planning—unless you aren’t concerned with the
health, safety, and well-being of your clients and community—is to define the desired results at the Mega level. Planning then proceeds down the chain of results to the Macro and Micro levels. In this way the three levels of results make up a value added chain of high payoff results. After all, we want to plan for useful results before selecting any methods or means for accomplishing those results.

Measurable Objectives. We create the future twice. We achieve it the first
time in our mind through imagining and dreaming, and then again through our
external accomplishments. For any useful results to be accomplished in tangible, measurable forms, first someone has to dream them. Since there are three levels of planning and associated results (Mega/Outcomes, Macro/Outputs, Micro/Products), strategic thinkers develop linked objectives for each of these in measurable terms. To
ensure we move out of our present paradigms and break the status quo, we must
be bold and audacious when we set and commit to our objectives. These objectives are called Smarter objectives. These are objectives that are not based on past processes; they specify the desired future in terms of results that ought to be accomplished, irrespective of the hindrances of today. They invent in the mind’s eye and commit to action results that have not yet been achieved (nor perhaps even conceived). As such, they don’t include methods and means— the methods and means describe the options for achieving the results, not the results themselves.

Ideal Vision. It is critical that strategic thinking and planning begin by stepping outside the limits of your organization. This step involves representative stakeholders in answering some fundamental questions about the sort of world you would like to create for tomorrow’s child. The Ideal Vision expresses in measurable terms what we wish to accomplish and commit to design and create.3 It describes ends and not means, processes, procedures, resources, or methods. In Chapter Four, Preparing to Plan, the Ideal Vision as the starting place for strategic thinking is described in greater detail.

Needs are gaps in results. Define “needs” as a gap between present results and desired results, not as perceived gaps in inputs and/or processes (which are really wants). By defining needs as gaps in results, we are thinking strategically, because we are designing the long-term future to be accomplished before deciding what methods and means might create it. Terminology should be precise when describing the world to which we will expect to commit many resources.

Critical Success Factors are the areas of your business or project that are absolutely essential to its success. By identifying and communicating these CSFs, you can help ensure your business or project is well-focused and avoid wasting effort and resources on less important areas. By making CSFs explicit, and communicating them with everyone involved, you can help keep the business and project on track towards common aims and goals.

LINKS used:
http://en.wikipedia.org/wiki/Critical_success_factor
http://www.mindtools.com/pages/article/newLDR_80.htm
http://media.wiley.com/product_data/excerpt/30/07879650/0787965030.pdf

1 comment:

  1. Wow. I just me across your blog assignment (?) I have not thoroughly read all of it yet but am definitely impressed. I will read it critically and give you more comments. Did you review Success factors for organizational performance: comparing business services, health care, and education? A relative of mine was one of the authors, Joseph S. Balloun. Is this an article written for a university assignment. I am working on a business plan right now and find the article quite apropos. For more information on me, see www.rolandsalestraining.com After I read your post, would you like to receive more comments by email or not. balloun@telus.net
    Roland

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