June 1981
Center for Information Systems Research Sloan School of Management Massachusetts Institute of Technology
TABLE OF CONTENTS ' . II. Introduction Definitions and Concepts Data Analysis Technique
III.
IV.
4; I
III
I.
INTRODUCTION Faced with an increasingly complex world, managers today they need access to their particular the information which
that to
roles and
responsibilities. is most
information (CSF)
factors" Review
Introduced
article (1),
being This
utilized paper
number
organizations. background as a
is written
provide
additional is written
primer
interviews. Critical activity in success factors are the few key areas of
which favorable to
results are absolutely necessary reach his goals. the manager him to well Because these
information to proceeding is be
determine
in each area. a
provide
interviewer success
in on
their
critical
factors --
resulting
technique
and
should
original such
assumes
appropriate, the
material
here
references
that
substantive
parts.
The
techniques for the interviewer to use in helping to think about and identify their CSFs. The
final
concerns methods of analyzing the data. The interview we procedure section contains those the two
techniques which
have found, in three years of using in drawing out CSFs. in successful CSF The
interviews,
however, are the preparation and skills which the interviewer brings to the interview thoroughly prepared. He itself. must The have interviewer must be
understanding of the industry, the specific company, and job being performed by the manager being (through interviewed. training
addition, the
interviewer
should
experience) have a command of basic interviewing skills. The CSF interview involves a lively exchange The interviewer must be of ideas.
have all the attributes and preparation of a good consultant. The mnore consulting better the skills that one brings to the will be. Given this task, the
interview
requisite to be
4 _Iln _
readily enjoyable.
acceptable,
interesting,
thought-provoking
and
One of the important strengths of tne CSF method is that it provides the interviewer with a logical way of relating to and understanding the managers who are interviewed. As a Managers result,
think in the terms used in the CSF interview. the CSF method allows the
the manager to easily identify those few matters which demand continuing scrutiny by him. The process, therefore, of (and
ultimately provides the interviewer with an understanding what information will really be perceived as useful
actually used) by each manager. The CSF method is also of direct and the interviewed manager. immediate use to
t assists her to explicitly focus important. they them method CSFs more to All good managers
attention on what is really have implicit subconsciously, careers. The CSFs to which help
have been using, most often manage helps are throughout their
interview
maKe
explicit, and
knowledgeably
be accomplished far before the requisite information can be built. The words "critical success factors" take their place with are
beginning
to
Like
goals
and
objectives,
readers may wish to hurry through the next section where material is very basic. as "strategy," "goals,"
CSFs and other managerial terms such and "objectives," will be defined, will be explored
6 __I1I _m
II.
DEFINITIONS AND CONCEPTS The first part of this section defines critical success terms then
factors and
in Part B,
conceptual background
concerning A.
critical
Definitions 1. Critical Success Factors limited results number will of areas (CSFs) in which CSFs are the
where
must go right"
to flourish
for the manager's goals to be attained. the and pattern of missions, resource to define be in) A the
significant
is to be. define
statement the
strategy
product line,
these
markets
means by which the operation is to be profit objectives, and the the size of the
suppliers
3. Objectives -
Objectives
are
general
statements
about the directions in which a firm intends to go, without stating specific targets to be reached at
particular points in time. 4. Goals Goals are specific targets which are A
or more objectives. 5. Measures - Measures are allow the calibration factor, specific of standards for which each
performance goal, or
objective.,
either "soft,"
and qualitative, or "hard," that is quantitative. 6. Problems - Problems are specific importance as a result of
tasks
rising
to
affect the achievement of goals or performance in a CSF area. Figure 1 summarizes the above definitions and uses an airline company example to illustrate the relationship among the terms. six
Figure 2 notes, although in an overly simplistic way, of of relationships an strategy of each of these terms from line manager. at (The
individual and
shown by
including
same
III
Brief Examples
Regional airline transportation Develop profitable route structure
Objectives
Change over to more fuel efficient fleet Goals Specific targets for a period of time Eliminate all routes with less than "N"% average seat usage By year-end replace all "X" planes with "Y" lanes Provide stockholders with 10% ROI in 1981 CSFs Key areas where things must go right in order to successfully achieve objectives and goals Obtain certification for higher-density routes Develop bank financing for new equipment Average % seat capacity used % of cash requirements under written equipment loan agreements with banks Problems Tasks resulting from unsatisfactory performance or the environment Increasing price of fuel Future competition from video conferencing
Measures
Calibrations of performance
FIGURE 2
..
...
_ .
CORPORATE
STRATEGY
+l BJCIV
EF3
--
IN
DIV MANAGER
I DUAL
L'
CSFs I
~PROBLEMS
MEASURES
^I------------------
-----
B.
the reader of what CSFs are and their role process. Building on the definitions
(2) -
The
uses
of
the
its
CSF
key
concept
purpose --
with
special
attention to
information
systems planning (1) The Nature of CSFs. have a long Terms like goals and strateqy --
and hlonored tradition in management literature. are relatively precise today and the
well understood. is n ot a
critical
aid an interviewer to assist a manager to find his CSFs. Yet managers success factors. isolating interviewer process. their can can, For CSFs, assist section possible and those a do, who determine have some their critical
difficulty in knowledgeable
well-prepared, in the to
greatly is
This
designed
background as
the "nature of the beast" with which they are aim is to supplement
11
- the need to "tailor" CSFs and information requirements to each individual manager's uniquely different situation
- the sources of CSFs - a useful classification of CSFs - the hierarchical nature of CSFs - examples of CSFs
Let us look at each of these in turn. (a) The importance of CSFs. Critical success factors are the relatively small number of truly important matters on
which a manager should focus her attention. the term "critical success "factors" manager
concerned.
manager's life, an incredible number of things to attention can be diverted. The key to
managers is to focus their most limited resource (their time) on those things which success and failure. In general, there are, for limited number of critical any manager, factors. only a very really make the difference between
success
Additional examples
energy both on the job and in their about these few areas of
12
III
bone."
Much in
time each
is of
spent these
considering areas.
ways
to
improve
performance process
is to make these areas explicit, not merely implicit. (as will be discussed more fully later) planning firm's process, management, to and enhance to aid
communication information
systems development. --
It is important for a manager to determine his goals which are managerial the lore. a targets It is he will equally shoot for. important,
determine, in
conscious
explicit
structural variables are which will most affect or failure in the pursuit of these goals.
critical success factors. Critical that these success factors are areas of sufficient importance
key
performance in each area should be continually status information should be made accessible use. (b) Different managers information. CSFs are different to This CSFs
for management's
different of a be
related
the means
specifics they
must
company, and the individual from place often manager in the will
according
organization's hierarchy.
13
change
as
the
industry's within or an
environment industry
changes, changes,
as or
the as
what
CSFs
They are not a standard set of measures, sometimes indicators," a company. which They can are be applied to all
solely On the
world
from
situational
measures,
information. (c) Five prime sources of CSFs. major sources which CSFs arise from five
The sources of CSFs are: Each industry has a set that are determined of critical by the
factors
Each company
14
III
in the industry must pay attention to these For example, from the four Harvard CSFs for Business the
factors. Review
supermarket
rationale behind
the referenced article. (2) Competitive Strategy and company within an Industry is in Position. an and Each
history
strategy.
company's some
dictates
by a single major firm, a CSF for all the understanding the In leader's like company strategies manner, the
their
geographic
can also generate CSFs. rural a CSF areas while may have
for more
urban companies this is less critical. (3) Environmental Factors. those areas control. mission The while over which Environmental an factors are
environmental
15
sources
of
CSFs
economy
and national
factors such as population trends, regulatory trends, and energy sources. (4) Temporal Factors. within an These are areas of activity
organization
which
airplane crash would generate the short term "rebuilding the executive group."
list of CSFs for a CEO, it could become a CSF for him under extreme circumstances of over or understocking. (5) Managerial Position. position has it. a gneric Each functional managerial
are concerned with product quality, inventory control and cash control. (d) A useful classification of CSFs. looking at CSFs is illustrated three major One useful way of
versus discussed
three
16
CSFs.
CSFs
which world
emerge view.
provides But as a
good
manager's serve an
interviewer
to the department and people run things a very as wide gamut, resource primary
diverse inventory
human The
control. CSFs is
within control.
influence
External less
who
are oriented
toward
Monitoring existing
Often these include financially oriented actual status performance of versus budget cost. or
product might
Another
be personnel turnover
17
reasonable
control
of
day-to-day operations, or who are insulated from fire fighting concerns, adapting) mode. planners whose spend These more people time in building are (or
future-oriented
change programs aimed at adapting the organization to a perceived new environment. area include hiring and the Typical CSFs in this
training
development programs. In general, managers will have a mix of both and building/adapting CSFs. However, there is monitoring usually a of
strong tendency toward one of these quite different types CSFs. This three dimensional classification visualize the clustering of can be used
to
combining the characteristics as shown in the illustration in Figure 3. For example, "Company Acquisitions" is an
external, building
"New Skills Acquisition" is an internal, building CSF arising from competitive strategy. monitoring CSF, problem area. probably "Interest "Employee Morale" is an temporal, Rate internal
Levels"
monitoring CSF, generated by the environment. We will note later in the section on "The CSF Interview" that an interviewer can use this classification process good effect in evaluating the with
18
SOURCES '
EXTERNAL
INTERNAL
manager's viewpoint, there is a set of his own CSFs on the manager must primarily focus.
however, one can discern four different of critical success These are: factors, each
must
considered.
As Figure organization in
suggests, an industry
industry in the
CSFs
affect of
each its
development
afford adequate in
attention to the principal factors which underlie success the industry. In turn, the strategy, objectives, and by a company goals
developed
lead to the development of a particular set of factors for the and corporation (corporate
strategy
other factors in its specific environment (see the automotive and computer industry and company examples in section), each the following
to its own circumstances. In turn, corporate CSFs become an input into CSF determination process for a similar
19
111
CORPORATE INDUSTRY CSFs STRATEGY OBJECTIVES GOALS CORPORATE CSFs ENVIRONMENTAL FACTORS TEMPORAL FACTORS
SUB-ORGANIZATIONAL CSFs
corporation. appropriate),
The
analysis
of
sub-industry objectives,
CSFs
(where and
corporate
strategy,
goals,
CSFs, and its own strategy, objectives, and goals, as well as environmental and temporal for factors each lead to a set in of the of each will be
sub-organization
The process can be continued for as many levels hierarchy as exist. Note that
organizational
functions
particular roles and on temporal factors, upon the section). industry and the environment. sets
determined in
From the viewpoint of CSFs alone, the hierarchy shown as illustrated in Figure 5.
can
be
Conceptually, industry In
CSFs (at the top) heavily influence each company's CSFs. turn, the company CSFs will play a significant
role in at
determining the CSFs of the CEO and all other the corporate level. Each executive,
executives
however,
will have
20
EXEC
EXEC
A
lo
LLJ
lu
~~CEO
EXEC
EXEC
LL
LL,
depending This
on
his
particular
role
and
top-down
influence
pattern is then
repeated at each sub-organizational level. In theory, top-down. the development of CSFs should be from
However,
careful analysis of each individual manager's (We will return to this in section III.) of are CSFs. Several examples of critical This to
section is aimed at providing further structured examples develop a fuller understanding of industry
CSFs,
organizational CSFs, and individual CSFs. 1. Industry CSFs In this section we will industry, and the computer discuss industry. the U.S. automotive
are useful vehicles for illustrating industry CSFs since they clearly point out the two prime characteristics CSFs. These two characteristics are: - Industry CSFs are determined by the competitive structure the industry's environment. - As these factors change, the industry's change. a. U.S. Automotive Industry. defined two CSFs will of the technical and of industry
economic,
political
21
----------"r113iaolr-i-_-_ _
decades ago, have seen at least two significant changes since that time. We look here at an original definition and the
two subsequent changes. Original CSFs - 1961. the U.S. automotive The first discussion of in 1961 factors. CSFs (2). in At
These
- Quality Dealer System - Cost Control Americans had always been styling. highly The influenced major U.S. in their car automakers Can anyone clear that
every company in the automobile industry. A second CSF noted system. The in 1961 was the quality of the dealer direct representative with the
automakers'
Not only do initial sales depend quality, but follow-up contact of the
constant
reinforcement leads to
reinforcement
Cost control was the third because profit per is automobile heavily
22
efficient the production and assembly line, the profit. A change in industry CSFs - 1976/7. When
greater
the
we
initially
updated this discussion of CSFs in the U.S. 1977, we included these three
auto industry in
industry
pollution control
standards.
status as car buyers have added a new supplies were limitless" and
When fuel
critical.
1977,
- Quality Dealer System - Cost Control - Meeting Energy Standards Yet another change - 1978. only by the Throughout 1977, disturbed
initial oil crisis in 1973/4, Americans continued When in 1976 General Motors introduced car on sale in the country, the that it was
fuel-efficient
Chevette, that car did so poorly in the market being called "the Edsel of the 70s." to close
small-car
23
_ ---
III
their big-car
with the demand. The second oil price surge made a difference with the in North 1978, however, finally His own
for most people, to a view of the car as transportation. (For the few who can lingers
efficient
afford it, however, one suspects the old image still on. But the new view predominates.) Thus, the industry CSFs have changed once
more.
It
from the list, and replace it must be essentially one of to are image car an
efficiency. caught on to
buyers to
Foreign creating
reliability
tinged
with romance.
perception by projecting a new image for the efficiency, reliability, patriotism. ease of
maintenance,
CSFs.
24
This evolution
in
well the point that industry CSFs will change, major ways, with shifts As in the environment political,
industry exists.
economic,
competitive conditions change, the industry CSFs will change. To understand must closely the current all set of CSFs for an industry, one these factors, with particular
analyze
In this dynamic, growth industry there are five industry CSFs at the present time:
- Choice of Market Niche - Technological Leadership - Orderly Product Development - Service and Stability
- Attraction and Retention of Quality Personnel As a result of its youth and growth, extremely complex. In years to come this industry is
However, at this
company to have a basic strategy, which answers the question, "What business are we in?" of the industry allowed as For many years, the sheer almost any has company become to growth prosper.
However, recently
competition
increasingly
severe, companies are beginning to fail because they have not clearly defined the market niche appropriate to their
25
III
of
well-defined
strategies, objectives and goals, and therefore most probably cannot succeed in the 80s. Most successful new entrants into the computer concentrate on adaptation of leadership a new industry
(within
Maintaining
leadership will help to ensure success. Once the strategic decision has been made to the basic business niche, the must orderly be with respect
development of As the
products for that market sector industry's available upgrade its offerings. must be lead technology
planned.
smoothly through succesive transitions to each Orderly product things as development thus must be
existing customer sophistication, changes in customer and the need for the company to expand its
Coordinating the availability of new products with and market managing demand is a key issue in this CSF.
of the past history of growth and instability, is the ability to provide ongoing high quality service. Data processing is operations of
vital
26
Networks for major companies extend world-wide and very remote locations. and Customers are concerned whether their investment factor The
"quality always
IBM,
maintained It has
an excellent set a
therefore
high standard in this area for companies in the The final industry CSF is attraction quality personnel. Competition for good and
people among
fierce.
Traditionally,
there
high mobility,
short
Quality personnel are the foundation of technology. Therefore the ability to market, and
attract and retain the skills needed to create, service the products is an important CSF. 2. Organizational CSFs
As Figure 4 suggests, industry CSFs are one input -a very large one -into each the CSFs for
and
organizations.
However,
corporation
environmental, strategic and temporal conditions drive its CSFs. only estimate Working the
externally from the company, one can of all these factors on the
effect
company's CSFs.
This, however, is what this section attempts of in four the companies computer in the automotive This last
industry.
27
~~~~~ ~~~~~~~_
is an
analyzed
in
some
depth
to of
extensive
description
"organization" CSFs at the corporate level. We deal primarily section. CSFs for with the corporate level in this own
sub-organizations strategic
(with and
their
sub-industry,
environmental, be described
temporal
conditions) could
As Figure 6 shows, each of the four companies noted must include the industry CSFs as part of their CSF however, has an additional CSF which list. from Each, its
arises
particular approach to, or position in, the industry. Within the industry, individual automakers have
based on market niche, temporal problems, and AMC, through its JEEP division has the largest
market niche is therefore one of AMC's CSFs. Chrysler has a serious cash flow problem. immediate, temporal (they hope!) CSF They have an
cash to keep the production lines rolling. chosen to meet the out foreign with competition new product
currently coming
cars.
28
industry
CSFs
CSFs
the president of a major computer company (which we will call "The Computer Company" and to describe the CSFs we would see Since the philosophy of CSFs requires that the
company, the major objectives being pursued, and the personal world view of the top corporate officers, the following can an outsider's noted view are, at of all an of these.
CSFs
best,
outsider's as
evaluation of what that company's top officers might list CSFs for provide the an company extensive at the current time. of one
illustration
"organizational CSFs". (1) Market Understanding. The company deals in a rather significantly. processing of to an for (or
complex marketplace and one which is shifting The emphasis is clearly on changing large from central the
machines
on-line we
processing support
what for
Office processing
Software development is
29
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(A C
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H 2 n 4
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E-4~j
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E/4
Z PA
an
emphasis
on
multiple-use important, to
software
Perhaps most
the need is clear in the 1980's for provide good networking capability
increasingly communication-oriented. Given the above complexity and change, an of the real understanding
Available, but limited resources must be spent products for the this past which large to are most needed. company.
Although
span have
select the major key market segments appropriate to it. (2) Insightful/Competitive Analysis. One way to
understand the market is through the analysis of competitors. This analysis provides some input in CSF into the market segment #1. More critical,
discussed
analysis
is
of competitive threats.
-which has
Japan
significant
(through both
private
resources
Japanese
counter-strategies
target
30
III
(3) Technological
"Leadership".
Market
understanding
without the development of the appropriate technology is less than useful. Moreover as computers increasingly become a (or at
"commodity," the maintenance of a technological edge the very least parity) with the competition
becomes
increasingly necessary.
CSF #4 which follows immediately. (4) Developing an Image. clear image in the computer The company has industry. At yet At never times times had a
it has it has
other
In the marketplace this changing purpose has lead to than robust image in the past.
the potential, at least, for low morale. market segment (CSF #2)
appears critical at this increasingly competitive time in the industry. (5) Developing Staff. The company a More Effective to Corporate Marketing
appears
understanding, it is very important to establish and a significantly larger and upgraded corporate
staff. (6) Quality People. successful company. The This is the driving force in Computer every
31
by need
attracting for
and
keeping
high
quality in the
increasing
productivity
industry makes this even more important today. (7) Service and Stability. which is an industry must". This is an industry CSF
discussion above, it is increasingly critical today. Figure 7 company CSF discussed. CSFs. CSF shows how each company-specific computer
relates to the computer industry CSFs previously CSFs 1,2,3,6, and #4 "Developing an 7 tie Image" directly is a to industry CSF the
temporal
specific to
CSF #5 "Developing a More Effective Corporate is another company specific CSF whose source
is corporate strategy. It should be clear from this example some individual company critical In success addition how one can fit
generated from the sources discussed previously. 3. Individual Manager CSFs there are
for each sub-organization within a company, that is each group, etc. And at every level of the each of whom have
division, department,
organization there are a set of people, individual CSFs. As Figure affected by 4 noted, "individual
manager"
CSFs
are on
several
factors.
Heavy
influences
factors.
32
1.
Market Niche
2.
Market Niche
3.
Technological Leadership
Technological Leadership
4.
Developing an Image
Temporal CSF
5.
6.
Quality People
Service
cut the
across job
itself
therefore other
pressures
produced managers as
factors. list
invariably CSFs.
quality
control
"Corporate Performance" in one form or another as a CSF. performing a CSF study, it is important, therefore,
closely examine each individual's role. Temporal factors for each manager are usually related to the current problems and opportunities which the facing. manager is
This area is therefore an important source for CSFs. the president all of a large commercial bank would loans to developing countries. today in many loans to
review dynamic
political
environments of
such countries may cause the become a president. should look problem, and
portfolio
these a the
generate study,
In performing at the
problems
opportunities
manager, and how she is dealing with them. Other factors managers include which strategy, generate CSFs for individual
If, for example, a VP Marketing has set a goal of sales by 25% in the coming year, the
increasing overall
marketing managers for each product line will have both goals and CSFs related to achieving that goal. Individuals are also affected by the organization's
33
_ _____1_1111_1__111_
III
environment and
industry,
but
to
lesser
degree.
For
example, whereas the overall corporate CSFs can be enormously influenced by new competition more of a particular product conditions line in the industry,
at
the
example of
and expansion.
have grown rapidly during their lifetimes, and are in a tight money economy.
This CSF is role-oriented, arises and each is temporal because of the his for
vice-president
solves (Apple,
its cash
available for growth.) Figure 8 completes the hierarchy of CSFs for one company from the auto industry CSFs, individual CSFs. below the industry example, Chrysler, by reproducing the
organizational CSFs, and adding three sets of The emphasis on role and temporal CSFs
level of President
with those of the corporation) should be noted. 2. Uses of the CSF Concept. placed it in Having discussed the CSF
concept and
34
of the concept.
- To aid an organization in its general planning process -for strategic, long range and annual planning purposes. - To aid an organization in its information systems
planning process. Attention will be concentrated in this paper on the last of these uses. original Harvard The first is discussed in d epth in the
specifically interested
review
(as an aid in
which is targeted toward the information systems field. the general" planning use of CSFs will also be
treated
relatively lightly.
use of the CSF concept from our perspective. a. Needs As Figure 9 suggests, an individual manager lives within the context of a corporation and her own sub-organization. Determining an Individual Manager's
-
Information
-
Where strategies, objectives and goals exist at higher levels (and in most major organizations they do today), the
individual manager must pay attention to these in determining her own goals. These goals, in turn, are of the factors which the are backdrop critical for in
the determination
35
III
(
- IMAGE
INDUSTRY CSFs
1
CHRYSLER - IMAGE - QUALITY DEALER SYSTEMS - COST CONTROL - MEETING ENERGY STANDARDS - CASH
z .1
MARKETING MANAGER
- IMMEDIATE HIGH
ffi J4
.
e
INFORMATION SYSTEMS MANAGER
- SERVICE (ROLE) - COMMUNICATION WITH
MANUFACTURING MANAGER
i
- COST (CORPORATE CSF) - QUALITY (ROLE) - INVENTORY POSITION (ROLE) - M (TEMPORAL) - N (TEMPORAL)
II
ENVIRONMENT (ROLE)
- Y (TEMPORAL)
- B (TEMPORAL) - C(ENVIRONMENTAL)
_ _
-9
FIGURE 9 THE CSF PROCESS USED IN DETERMINING INDIVIDUAL MANAGERIAL INFORMATION NEEDS
MANAGER'SS BUSINESS
rVVTV0MMVWilT
INDIVIDUAL MANAGER
GOALS
CSFs|
N OF
I MEASURES
W
REPORTS
DATA BASES
II
goals. the
Measures status of
will CSF
the be
which
display
latest
must be designed.
bases from which the reports can be drawn are developed. This is a rather straightforward, top-down process. manager starts by thinking about while paying requisite his business to of the his The
attention levels
manager is in the organization, the less he the strategies, by proceeding a business objectives and goals of
then,
definition of data elements needed. During the past two years, we have found this useful conceptual path. to be a
By the time these are built, some of the appropriate measures and reports will have changed. Therefore, from a pragmatic the most
viewpoint, the CSF concept is today being used for part as described
an aid in information systems planning in the manner in Section c. below. It is on this that we will
concentrate this discussion. b. CSFs As An Aid in General Corporate Planning noted four different
36
levels of individual.
CSFs:
There is every
various levels of CSFs in the corporate planning process, and this is being done by several organizations. Since CSFs
designate the areas in which good results must be obtained to ensure success at any level of sense for an organization pertinent the CSFs or so the organization, to it makes
individual that to
consciously can be
resources ensure
planning
process
successful
efforts in each CSF area. There are multiple possible uses of For example, corporate industry strategy. CSFs can CSFs in planning.
Similarly, should be
sub-organization CSFs
significant
CSFs
particular year.
The following
the first and last of these uses. Industry CSFs, as noted in Figure 5, are a necessary process. input into the corporate logical and
strategic
planning an
specialize in strategic planning use either the directly or a concept similar to it.
37
_ _1_ _1__1_1^__ _______
where
high
performance is critical -- or the organization must move into an industry niche in which, in effect, different CSFs exist. useful
After the manager's goals have been determined, of the relevant CSFs will lead to improved key programs
the determination
Figure 10 illustrates this individual planning sequence. c. The Use of CSFs in Information Systems Planning primarily planning. Nolan's as a
Currently the CSF method is being used technique to aid in information systems and
It is
"Stages"
In this section, we
will discuss the CSF procedure as it is used for I/S planning purposes, the concept of "information data bases" the primary output which are
and the reasons underlying the growing use of the CSF process in this manner. (1) Procedure. procedure as follows: (a) In corporation or the top 10-20 a the chosen organization, most often a it Figure 11 diagrams the CSF
major
suborganization such as a division, are interviewed in are the final using the CSF
managers
discussed CSFs
Each manager's
determined.
38
allows, the
measures
but this is not a necessary part of this routine.) (b) Analysis of the results of the interviews is performed. individual CSF
charted, as shown in Figure 12, to determine the have been identified by multiple managers
his CSFs
are
therefore
different
in
some
ways
colleagues -- we have found that the intersection of all manager's CSFs is the set of
These resulting CSFs are then checked with the organization's management. (c) The organization's CSFs, as charted in step 2,
in every case will indicate one or more key "information data bases" or "data processing systems" which should receive For a
priority in the information systems development process. example, the CSFs shown in Figure 12 indicate the need for Human Resources information data base and a
Corporate to
top
management
lll____IXI____III_____
39
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systems development. (2) Information data bases -As step 3 in the the primary output:
major types of systems needs which are developed through this CSF procedure. The first is the -need for particular data
processing systems
This type of system needs no further explanation. an indicated need for these operational data
processing since
systems is not often a direct output of a CSF process, top management contained is not usually interested in a
solely
single
transaction-processing system. Most often the key "systems" needs indicated by the procedure are data bases." the 'op development managers areas of of CSF
most the be
spanning various
cannot
data base.
"information data
Many examples of information data bases are given in the "Executive Information Support Systems" full discussion of information data paper bases (3). and For a
relevant
Briefly, however,
unlike the traditional transaction processing data bases such as those developed for accounts receivable, manufacturing bases
control, etc.
40
_ _ _ _II
~~~~~~ __ ~~~
I_
~ ~ ~~__ -- --
III
of
data which are used to process the paperwork mainstay These of the day-to-day life of an
storage, optimized as far as possible to facilitate efficient processing of the thousands of daily transactions which occur in major organizations. Information support data bases, on the other very different (See Figure 13.) paperwork. make in purpose and the hand, are
They are
fed in
but only in part, by data from the operational Moreover, much significant and "soft" internal information data from
data bases.
customer surveys,
market
sampling,
planning support
included in the
bases which can be bought from information vendors today. In technical structure, information support are also different from the conventional data bases
processing.
Most
41
and evolution. (3) Reasons for the use of the CSF method as an Information Systems Planning. aid to
the 1980s and the CSF method itself. - In 1980, executives are a growing number of
well
aware
operational creating
the past 20-25 years. therefore process, need are to the data
planning
information needs of top management and the information bases which must be built to support these needs.
The CSF
method provides a technique to do this. - The CSF method to aid information systems planning a "rifle-shot" technique aimed at understanding is top
approximately
person-month
It is, therefore, inexpensive as a planning tool. to its yield provides for an information systems
method
equally important, benefit for the interviewer. is a relatively deep understanding of the way in senior manager interviewed spend views the world. the interview
interviewed managers
42
_*____
III
Figure 13
----r
Data attribut
-I I I I I I I I I I I I I
* timeliness not critical * "hard" and "soft" data c consistent * completeness not always possible
- -- - _- - - - --
I I
I
* optimized for efficienc Y: e tables of data des igned of computer resources for easy access & change II
-
-- -
II *
III
``\
e,
NI
Az
*:
their jobs as they see them, and the areas which they believe are most critical to them. the Interviewers who have used the top person in information
CSF process
systems) have
almost unanimously reported that this "insight its view of the business" has been,
by itself, of significant value to the I/S department. - Perhaps equally important, the CSF procedure top management with a In vehicle far little too time for many to thinking provides their top
about
organizations, pondering
their own
information needs.
shift to the realization that, with today's technology, it is not only feasible, but desirable (and necessary) for information them to spend The and time some would say even
requirements.
business-based, logical,
time-sparing
new endeavor for line management. - Finally, the CSF method, used as an aid for
information systems
planning,
focuses
those information data bases which are necessary the information number) of top needs of all It (or is at
managers.
expensive
information data base for only a single executive (even if he is the President). However, where it can be shown, as in data base will
43 ~~~~~~_^
.. . . -------
III
serve the information needs of many of the organization's top executives, the justification of the development of such a
44
III.
INTERVIEW PROCEDURE AND TECHNIQUES This section is written for the person who is about to
undertake his
first
CSF
interview.
Here,
we
attempt to as In
communicate all those things which appear we look back on three years of CSF
to be important interviewing.
addition, this section reflects the knowledge gained from our discussions with others who have used the CSF method. major areas They are: - Objectives of the interview - Pre-interview preparation - Interview procedure A. Objectives of the Interview A CSF interviewer has a unique opportunity. managerial time Given the of interview procedure and Three
technique follow.
and attention which has been made available, Just coming out with the
she should capitalize on it fully. manager's CSFs is not enough. seek to accomplish all of the 1. To understand the mission the and
Rather, the
interviewer should
role
(the
"world
interviewee within the context of his as the interviewee perceives them. 2. To understand interviewee. 3. 4. To elicit CSFs and measures from To assist the manager in better own information needs. the the goals and
objectives
of
the
interviewee. her
comprehending
45
II__
___
III
that the manager has confronted needs in a structured way. presents the
these
information
initial occasion to
information
on CSFs and
educational opportunity B. Pre-interview Preparation As noted earlier important. also with in It the steps
not be overlooked.
this
guide, one
provides confidence
following
represent to be
people desiring to conduct CSF interviews: 1. Read and be throughly familiar with the articles, (1),
"Chief Executives Define Their Own Data Needs" "Executive Information Support Systems" All
(3), and in
provide,
Understand the industry competitive forces, trends, and environment. and news makers. in Know the current problems, issues This is important CSFs and during the in fully
interview both
eliciting
46
understanding the importance of each CSF. 3. Study the company or companies to Use publicly available sources be such interviewed. as annual
company
histories,
articles in the Wall Street Journal, Business Week, Forbes, and Fortune, are often are available thought. with the the study. strategy, in greater highly useful and
in the company who are sponsoring the company, problems Internal its and company
invaluable.
company
conducting
management of the company to all interviewees prior to the interview. The letter should explain the top
purpose of the undertaking and explicitly show management support for it. include background
material
47
III
the the
interview. interview
In
addition, process
brief be
should
the
lowest and
level
interviewed
work up.
provides the ability to review, in preparation interviews with higher-level from the levels. become CSF In managers, interviews this way
lower can
increasingly
issues before being confronted with the top two three managers in the organization. 6. Plan to have, and enlist, a key company to accompany There the are the pros manager from on to
interviews. method. On
plus side, one has the benefit of discussing someone the interview who can during
available
minus side, the interviewee may not and frank is present. during
48
whether the pros outweigh the con Suffice it to say, that for
on
this
issue.
key manager with us during the interviews. 7. Prior to the interview, assume the role of the
interviewee and
This can be an enormous aid during the interview in eliciting a complete set of CSFs is on is and an measures aid in
doing
interviewing
skills.
There
are
interviews
enhance the success of a CSF interview. C. Interview Procedure With the necessary preparation out of the way, of the first interview arrives. This the day
section provides a
step-by-step outline of the several parts of a CSF interview. These are Description (1) of Opening Mission the and Interview, Role, CSFs, (2) (3) (5) Interviewee's Discussion of
(4) Developing
Prioritizing
49
-
III
1.
interview. of how
brief method
introductory is used to
needs.
Although
the interviewee has h ad preparatory material, a few remarks to place. help to refresh his memory these are remarks never out of will also
If it becomes apparent
purpose of the interview. a. Example of brief introductory you know we are from using a statement. 'As
managers in looking at the way they manage and, as a second ste p, for determining their on
focuses
goals
objectives.
factors or CSFs." b. Example of lengthy introductory statement. the past, analysts have occasional success, needs of managers. to For attempted, with "In only
50
been
due
manager to the As a
demands result,
currently
interview method which appears to have overcome many of the shortcomings of previous methods.
This new technique focuses on identifying those factors in a manager's environment which are good results
success
information to
primarily
report
which report on the results in areas underlying eventual success or failure in the achieving of goals. CSFs answer the basic question of
'Where should you place managerial attention?'. Once that question has been answered an
_ ___
____
51
III1
to
start
by describing your mission and role, move on to your objectives and goals, and then discuss the critical success If the clarify her examples from article or factors that support these." needs examples to
Harvard guide.
this
are appropriate to the interviewee, the company and the industry. 2. Ask the interviewee to role. This initial describe question easy his serves way and to that job. his to mission two get start which and major the him he
purposes.
First, it is an the
process to
company manager
Second, job, he
discusses clues
provides
carry
have
important exposition
52
success
factors.
this section of the interview. cross-check on manager's CSFs what should is said
consistently
relate to his
role as it is perceived. 3. Discuss the manager's goals. often necessary in this ask Some definitions of you are
part "Do
6-7)
horizon for goals, the manager should be respond with the time horizon
(short or long)
Most managers
pick
The choice of the time-span and nature is meaningful in itself since insight into the way the
question, will reach into a drawer and pull out the set of goals, often determined by an MBO process,
on which they are being measured during the current year. Seeing this writing list, our response -in
addition to
53
III
ask, "All right, this is the set of goals on you are to be measured,
which
important, than tthe agreed-upon goals. any goals which f it this category?" sometimes expose
Here
example, a manage!r in one company had, as a primary goal, the elevati on of his sub-organization in the Since a company good to pa rt give of higher
c ritical
success factors
very important --
relate
unstated -- yet
it is highly
informal
possible
manager's
CSFs.
The
process
of
determining the
manager's CSFs can be quite simple If the manager has done the
his CSFs he may even have a written list to present to the interviewer explanation of together with an appropriate
each CSF.
prove
Fortunately, the latter case is not often found the top of reasonably-sized organizations.
interviewees
54
later in this section.) (a) Some questions No it matter that how are helpful smoothly in the
the manager's CSFs through a series The first, and obvious, question is:
"Will you please tell me, in whatever order they come to mind, those things that you see as critical success factors in your job at this time?" As the manager proceeds, the interviewer of a
CSFs.
additional questions are: "Let me ask the same question concerning critical success factors in another way. In what one, two or three areas would failure to perform well hurt you the most? In short, where would you most hate to see something go wrong?" and "Assume you are placed in a dark room with no access to the outside world, except for food and water, today. What would you most want to know about the business when you came out three months later?" As simple as these questions seem, turned out to be highly effective they have
in assisting areas
55
_lj_m__ _ 11
a manager with at least a slight sense of humor react well to it. tends to questions. develop
to
they can serve as a starting point. (b) Things to do while the manager is you his always in interview. while the CSFs. The skillful CSF mode telling
"multi-processing"
Among the things that are helpful to do manager is talking and you are writing in a few "dead" moments
the following: (1) Using the CSF in Figure 3, mentally classifications check summarized
ensure the interviewee has not focused on only type of CSF. For
externally.
The interviewer
should be aided in uncovering this oversight by the initial mission and role description given interviewee. which was In addition by the
performed ask
should
interviewer to
about
interviewee has not mentioned, particularly in area of external and at environmental the CSFs.
example, especially
presidential
56
consider involving
CSFs
that
might
arise factors
out
of such
issues as
environmental
competition, new technology, and regulatory issues. (2) "Aggregate" CSFs to ensure that one CSF is not being discussed in multiple ways. area Some that
interviewees "get stuck" discussing one is of particular concern at the moment. CSFs talking in different new
about
interviewer should be aware of this possibility and be ready to suggest that several one. Then CSFs are really
the interviewer should not try to persuade him into more CSFs if it is not appropriate. (3) Check to ensure that all elicited, not hard data. talking about CSFs are being
only those that can be measured with Even though the CSF method avoids
computer-based
information systems,
some interviewees limit their thinking to what they believe to be Be appropriate sure to CSFs stress that for the needs
"computerization."
like
"relationship
with
the
boss,"
"supportive
57
III
In sum, doing the interviews, the should check to be sure He about his
interviewer is
involvement be not
should areas
careful covered
directly by the manager to not indicate a judgement on his part. His job is not to convince the Most the the
interviewee of his CSFs but to draw them out. managers will not be unduly be influenced sensitive by to
should
On the other hand, as suggested by points 1-3 above, the interviewer should be sure that he has in his
"stretched" the manager as far as possible thinking during the interview. The
majority of with
concept and need a great deal of prompting. possible, the examples and interviewer anecdotes should past This is be ready
from
interviews a
situation
without creating the answers. 5. Prioritize CSFs. manager is often Some further insight into the
58
general as
all, a small high-priority set of things -which are critical 6. critical. Quite often no one
is more
than the others. Where time permits, for CSFs it and is to the the ways
measures
identify the sources of these measures. CSFs have been determined and
After
prioritized,
interviews should proceed to discuss possible of measuring creativity. each. The This is an may area come
interviewee
are meaningful
of each to make
factor now.
The
suggestions based
initial
interviewer
suggest a way of measuring that the interviewee did not think of but likes and will use. In general, measures, does this not final step, determining
need
59
III
interview. entire
until described
after in
the this
initial
desired
have
60
IV.
ANALYSIS OF DATA There are two major steps in the analysis process. They
are described below: A. Reviewing CSFs. the Each interviewee's CSFs should be in all
reviewed against
Section III to check whether the interviewee has covered the major areas of his are job (e.g. if the CSFs
interviewee is a as quality,
"role"
such
control noted?).
check interviewees
opportunities, and
competitive
conditions,
interviewer has the background of his research, the interview and his own experience to assist him in this good review. "feel" If a
Primarily, however, the interviewer will have a for the there are company major after gaps, the this start should
It is highly desirable to prepare a written the CSFs to be reviewed and approved by the
interviewee. this
addition to ensuring that the facts are may elicit additional B. Aggregating As one information. CSFs From earlier, is the the the
correct,
CSFs
company as a whole.
61
from
the
individual
interviews,
the
interviewer can discover exactly which information data bases are most necessary to support the managers. For example, interviewees list in CSFs several that instances, we have had In
most of these cases, some of the information needed to progress with e.g., sales external in
track
regard to these CSFs was internally generated, "hit/miss" origin; reports. for Other information was
example,
competitors
customers response patterns, and market share data. however, the CSFs pointed directly to the need
marketing information data base. In another situation, improving chain, employee morale. were training the president Farther concerned for their down about named the a CSF of
executives and
development
employees.
interviewee mentioned that employee turnover in his area higher than desirable. theme.
Many other CSFs in this company hit The need for a human resources data
the "personnel"
base was easily identified. A CSF chart, such as the one shown on Figure 12, can very useful in this aggregating process. be
particular
At this point, the CSF data should be in convenient form to feed process. into The the company's information data bases systems required planning for top
information
62
be too
given
consideration
for
priority
to allocate additional
of these systems. Once a decision is made to go ahead information data base, with a particular
measures In this
way, data
information
established.
63
__ _ _______
References
1. John F. Rockart, "Chief Executives Define Their Own Data Needs," Harvard Business Review March-April 1979, p. 81.
2. D. Ronald Daniel, "Management Information Harvard Business Review September-October 1961, p. Crisis," 111.
3. John F. Rockart and Michael E. Treacy, "Executive Information Support Systems," CISR Working Paper No. 65, November 1980 (Revised: April 1981)
64