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
  • 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


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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