CSF and KPIs: understanding the importance of success factors and monitoring indicators


Concepts such as CSFs and KPIs are gaining more and more buzz. Theorized by D. Ronald Daniel and Jack F. Rockart, these concepts which can be very useful for optimizing the management of your activity, improving performance and responsiveness. In concrete terms, CSFs and KPIs are indicators that allow you to define and measure your business objectives. They give a picture of your company's ability to achieve concrete goals. But to use these concepts wisely, it is important to understand these indicators and assess how they will help you achieve your organization's vision.

 


CSFs or critical success factors


The idea of a critical success factor was first developed by D. Ronald Danie of McKinsey and Company in the 1960s. Subsequently, the concept was popularized by Jack F. Rockart of the Sloan School of Management , at the end of the 1980s. A CSF (Critical Success Factor) is thus defined as an element present in the internal or external environment, which has a major influence on the achievement of the company's objectives.

 

CSFs and the decision-making hierarchy


We can distinguish three levels of objectives for a company which constitute its Business Plan:

 

  • The vision or mission that expresses the primary aim of the organization, the reason why the company was created and why it continues.
  • The strategy is the roadmap that the company has set in response to the pressures of its internal and external environment to better serve its mission. It is developed using analytical tools such as the SWOT and spread over the medium term.
  • The tactical objectives are more specific, they detail the strategy in concrete, measurable and budgeted actions. These are the key success factors of the strategy, which guarantee its realization. For example, a company may have the strategic objective of conquering new international markets. As a result, the adaptation of the offer to foreign markets and the creation of international partnerships are examples of CSF that could result from this.


KPIs or key performance indicators


A KPI (Key Performance Indicator) is a more specific, quantifiable indicator that measures the degree to which the company has achieved critical success factors. KPIs are therefore sub-indicators of CSFs, each CSF can include one or more KPIs. A KPI can be financial or non-financial.

 

CSFs and KPIs integrated with Business Intelligence


The use of CSFs and KPIs to manage your activity has certain advantages, because today more than ever, information is the sinews of war. In an increasingly turbulent and uncertain environment, having complete and reliable information on its market allows decision-makers to better anticipate the vagaries of activity and to improve responsiveness. The use of these indicators makes it possible to better align with its strategic objectives.

 

Critical success factors and key performance indicators can also be integrated into Business Intelligence, a method that allows precise monitoring of the company's activity and good visibility of its long-term strategy. term. More than a collection of analysis tools, Business Intelligence is an integral approach that transforms your relationship to planning and decision-making. With suitable solutions such as Power BI, you can easily start integrating these reflexes at all levels of your company. Associated with an ERP, Business Intelligence tools gain in precision and reliability.

 

Pégase EXPERT supports companies from different sectors in the implementation of the ERP Divalto Infinity and the Power BI solution for better control over decision-making. In Morocco, Algeria, France, Reunion or the Caribbean (Guadeloupe and Martinique) and Quebec, we are nearby to support you in your digital transformation process.


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