Critical success factors

Critical success factor

Critical Success Factor (CSF) is a business term for an element which is necessary for an organization or project to achieve its mission. They are the critical factors or activities required for ensuring the success your business. The term was initially used in the world of data analysis, and business analysis. For example, a CSF for a successful Information Technology (IT) project is user involvement.

Concept history

The concept of "success factors" was developed by D. Ronald Daniel of McKinsey & Company in 1961. The process was refined by Jack F. Rockart in 1986. In 1995 James A. Johnson and Michael Friesen applied it to many sector settings, including health care.


A plan should be implemented that considers a platform for growth and profits as well as takes into consideration the following critical success factors:

  • Money: positive cash flow, revenue growth, and profit margins.
  • Your future: Acquiring new customers and/or distributors.
  • Customer satisfaction: How happy are they?
  • Quality:How good is your product and service?
  • Product or service development: What's new that will increase business with existing customers and attract new ones?
  • Intellectual capital: Increasing what you know that's profitable.
  • Strategic relationships: New sources of business, products and outside revenue.
  • Employee attraction and retention: Your ability to do extend your reach.
  • Sustainability: Your personal ability to keep it all going.

Management factors

Key success factors generally include exceptional management of several of the following:

  • Product design
  • Market segmentation
  • Distribution and promotion
  • Pricing
  • Financing
  • Securing of key personnel
  • Research and development
  • Production
  • Servicing
  • Maintenance of quality/value
  • Securing key suppliers

Relation to Key Performance Indicator

A critical success factor is not a key performance indicator (KPI). Critical success factors are elements that are vital for a strategy to be successful. KPIs are measures that quantify management objectives and enable the measurement of strategic performance.

An example:

  • KPI = Number of new customers.
  • CSF = Installation of a call centre for providing quotations.


External links

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