CSF‌ ‌and‌ ‌KPI‌ ‌:‌ ‌how‌ ‌choose‌ ‌the‌ ‌good‌ ‌indicators‌ ‌for‌ ‌my‌ ‌activity‌ ‌?‌ ‌

The importance of critical success factors (CSF) and key performance indicators (KPI) is well established. These are essential decision-making tools to have visibility on the achievement of the organization's objectives and gain competitiveness in its market. The choice of CSFs and KPIs can vary significantly from one company to another, depending on the specifics of your business and your current objectives. In this second part of our guide, we answer some of the most common questions about CSFs and KPIs and give you some markers to select the right indicators for your business.


Who is in charge of selecting CSF indicators and KPIs?

Since it is more effective to integrate critical success factors (CSF) and key performance indicators (KPI) into your business intelligence solution, the choice of indicators is often designed as an IT task. That said, Business Intelligence is not just software, it is a policy of planning and monitoring of transformative objectives for the company, which first engages management. The BI software will then have the advantage of presenting the information collected at the different levels of the company in a synthetic way, so as to give visibility on the current strategy and to make it possible to rectify the situation along the way. The choice of indicators is closely linked to the company's strategy and must be carried out by the decision-makers, in consultation with the employees of the various departments.


How many CSF and KPI indicators do I need?

The indicators are set on the basis of the objectives of the organization. CSFs relate to tactical objectives, which detail the company's vision and strategy. Similarly, KPIs are more specific and measurable indicators that measure the degree of achievement of critical success factors (CSFs). It is generally recommended to break down your vision into 3 to 5 objectives to clarify your vision. Each objective can then be broken down in turn into 3 to 5 critical success factors, i.e. 9 to 25 CSFs in all. Finally, for each CSF, you will need to set at least one KPI to measure its achievement.


The precise number of indicators to adopt is specific to each company, depending on your needs and your strategic vision, but generally, it is recommended to limit yourself to the essentials and not to multiply the indicators as desired, because this will make it difficult to estimate the effectiveness of actions. Similarly, it is important to ensure consistency between the objectives set, within the framework of a harmonious strategy. Multiple and not well thought out objectives can indeed be contradictory: for example a customer satisfaction objective and a budget control objective. The clearer and more focused your objectives and indicators are, the more visibility you will have on your strategy.


How can I check that I have chosen the right indicators for my business?

The process of developing and monitoring a strategy is always approximate, with the need to remain reactive and review certain aspects as you go along. The same goes for CSF and KPI indicators. It is through practice that your selection will be refined and that you will learn to choose the critical success factors and the most relevant key performance indicators for your activity. Either way, keep in mind that metrics serve your business vision, not the other way around. You can rectify them along the way to better achieve your goals.


In addition, there are indicators that are better suited to certain professions. Here are the aspects to focus on when choosing the right indicators for the following sectors:


  • Construction: requests for information (RFI), change in orders, schedule of operations, productivity, site safety, inspection, quality, project closure.
  • Industry: productivity, process, delivery times, stocks, quality, health and safety.
  • Real estate: operational efficiency, maintenance, rental periods, collection periods, net income.
  • Trade: prospecting, sales cycle, conversion of opportunities, sales volume, sales basket, turnover, customer satisfaction, complaints, after-sales service.

Pégase EXPERT supports companies from different sectors in the implementation of the Divalto Infinity ERP for better monitoring of their growth and competitiveness strategies. in Africa (Morocco and Algeria) in the Caribbean (Martinique and Guadeloupe) in France (Lille and Paris) in the Indian Ocean (Reunion and Mayotte) and in Canada (Quebec), we are nearby to support you in your process of transformation digital.