Question

Explain Critical Success Factors (CSF) and Key Performance Indicators (KPI) with examples

##please I need full answer (250 - 350) word.

Answer 1

Critical Success Factor refers to the element in a project that is required to complete the desired goal successfully. Identifying the Critical Success Factor and communicating the same within the organization in order to align them ensures that the business or project is focused on its aims and objectives. Examples of Critical Success Factors include hiring experienced employees, risk management policies, increasing the market share through the existing customers, etc., It is necessary for the management to identify the key success factors and the key success areas in order to achieve the desired goal. The five major key success factors are:

• Strategic Focus (Leadership, Management, Planning)
• People (Personnel, Staff, Learning, Development)
• Operations (Processes, Work)
• Marketing (Customer Relations, Sales, Responsiveness
• Finances (Assets, Facilities, Equipment)

The steps that are involved in achieving the Critical success factors are:

1. Align a separate team that will be particularly working with the Critical Success Factors.

2. Consider the ideas and feedbacks of the employees.

3. Use multiple frameworks like a strategic plan, SWOT analysis, change agenda, etc., in order to examine the key elements of the long-term goals.

4. Determine key factors that drive towards the long-term organizational plan.

5. Implement the strategic plan considering the critical success factors.

Key Performance Indicators refer to the set of quantifiable measurements that are used to identify how a company is achieving the key business objectives effectively. It determines the organization’s strategic, financial, and operational achievements, especially compared to its competitors. The Key Performance Indicators differs based on the industry. For example, an IT company may consider year-over-year revenue growth as its KPI whereas a retail chain gives more value on same-store sales, as the best KPI metric in order to gauge its growth. Organizations use KPIs at different levels to evaluate their success at reaching targets and It is not necessary that the Key Performance Indicators should always be linked to a financial condition. Quality metrics like foot traffic, employee turnover rates, etc., can also be considered while determining the Key Performance Indicators. Following factors needs to be considered while defining the Key Performance Indicator:

• The desired outcome
• Purpose of expecting a particular outcome.
• Measurement of the progress.
• Factors that influence the outcome.

• Responsible people for the outcome.
• Factors that determine that the desired outcome is achieved.
• Frequency of the progress review.

Organizations nowadays are implementing SMARTER KPIs in their organization which stands for Specific, Measurable, Attainable, Relevant, Time-bound, Evaluate, and Reevaluate. Once the Key Performance Indicators are set and are identified to be actionable, it is necessary for the management to communicate them to the corresponding stakeholders and review it on a regular basis.