Critical Success Factors (CSFs) and Key Performance Indicators (KPIs), by D. Ronald and Jack F. Rockart, is a method to define and measuring business objective and assure that these are aligned to the organization vision and goals.

When you have identified the organization’s strategic goals/objectives, then, for each of them, you have to ask your yourself, ” which key areas are important to achieve these set of goals?” These are your “candidate” CSFs, then, you have to choose which are relevant for your company and for each one you have to define at least a measurement (KPI) and target. So, based on this method an

Objective = CSF + KPI + target

For example, a strategic goal for an IT company could be: “delivery more high quality software”, then, the candidate CSFs could be:

–     Increase training hours for new programmers

–     Increase hours to allocate to system test activities

–     Retain programming team members

Some KPIs for each of them could be:

–     Starting from the new next hires and for all the next year, increase training hours for new programmers to 200 hours

–     Starting from the next delivery and for all next year the hours allocated to the system test for each new module release must be at least the 50% of the time allocated to develop the new release

–     For this year and for all next year increase the manager training hours to 8 hours for months

Note that the goals could be express in more detailed term, and it could an objectives itself: “each module delivered in this and next year must have at maximum 3 bugs claimed by customer”, but the method to define CFSs and KPIs doesn’t change and permit to have business objectives that decomposition method of goals in objective could not identify immediately.

At least, note that Business Motivation Model defines CSFs and KPIS in different way: “If a metric is particularly important, it may attain a special status and be called a Key Performance Indicator (KPI), or a Critical Success Factor (CSF), or something else. The choice of signifier is unimportant. The enterprise will decide on many different things to be measured2. Each of these measurements will have differing degrees of importance relative to the attainment of some Objective or set of Objectives. The fact that the enterprise has decided to measure, evaluate, and act on the results of the metrics is the important thing.”

To know more on CSF, I suggest to read this short free article: “https://www.12manage.com/methods_rockart_csfs_kpis.html. Subscription is necessary.

For Business Motivation Model, her the link: https://www.omg.org/spec/BMM/1.3/About-BMM

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