Process Reengineering
3.1 Critical Success Factors
It is important to provide a barometer of the overall performance of an organization by identifying what needs to be done well. The pivotal focus of this approach is a determination of the set of factors that management considers critical for the organization’s success. Success factors should specify how the major processes that have been identified are best measured. These factors, in turn, should be aligned with customer or end-user values and the shared vision of the organization. Once identified, these factors often are stated as management objectives, and the information required to monitor their performance should then be delineated.
Critical success factors (CSF) are not new. Ronald Daniel introduced the concept of “success factors” in 1961 [12]. However, the approach has been popularized by John Rockart and other researchers [13]. Rockart defined critical success factors as,
. . . the limited number of areas in which results, if they are satisfactory,
will ensure successful competitive performance for the organization. They are the few key areas where ’things must go right’ for business to flourish
. . . As a result, the critical success factors are areas of activity that should
receive constant and careful attention from management [14].
TABLE6.4 Core Human Resources Values and Principles Core Values
Provide outstanding services to customers/end-users by recruiting and developing highly quality staff within the context of financial stewardship.
Highly value staff members for their knowledge, skills, talents, experience, service orientation, flexibility, creativity, and loyalty.
Treat staff members with fairness, respect, and dignity at all times.
Fundamental Principles
Develop and maintain policies and programs that support a creative, flexible, and high- performance staff.
Encourage staff members to generate creative ideas and innovative practices that enhance the ability of the organization to compete with its peers.
Develop and maintain an environment that promotes a cohesive, inclusive, and diverse workforce, affirming the inherent worth of all individuals.
Underscore the importance of teamwork, trust, and open communications.
Core Programs
Adopt and maintain a set of criteria for promotion and salary enhancement and reward staff members who meet and exceed these expectations.
Recognize staff members who demonstrate creativity and secure successful outcomes in support of the organization’s objectives.
Provide a competitive salary schedule that adequately compensates staff members who support an efficient, high-quality organization.
Create pay-for-performance strategies that reward collaboration, team work, and superior results.
Provide staff with the tools and educational opportunities required to develop the new skills needed by the organization.
Develop career pathways and job transfer strategies that facilitate the advancement of high-performing staff.
Strive to retain staff members who have the needed skills, flexibility, ability to adapt to change, and demonstrated work performance.
Provide supervisors with the training necessary to enable them to manage staff effectively, especially during times of change.
Boynton and Zmud suggest that “CSFs provide a focal point for directing a computer-based information system development effort” by pinpointing key areas that require the attention of management [15]. KPMG Peat Marwick developed a CSF model for higher education, for example, that identified 67 critical success factors to be measured on an annual basis. Designed to be used by senior administrators, this model emphasizes the need to “compress information so that managers can focus their attention on high priorities in making and assessing decisions [16].”
The CSF approach provides a structured technique for identifying the information required to determine whether events are proceeding appropriately
in each key area. By linking the perceived success factors to information development and reporting procedures, managers know what information is indispensable to their responsibilities. Critical success factors differ among individual organizations. For a given manager, CSFs can be expected to evidence some variation from year to year, but remain fairly constant for shorter periods of time. Primary sources of CSFs, as identified by the Rockart research team, are shown in Table 6.5.
Critical success factors can be identified through a series of interview sessions. In the first session, managers are asked to delineate their objectives and the CSFs underlying them. The interview is designed to explicitly extract those critical success factors that managers have been implicitly using. The second session attempts to identify a specific performance indicator for each CSF and the possible data and reports appropriate to monitor it. Additional sessions are held as necessary to achieve agreement on the CSFs, their performance measures, and the required reports for tracking them.
While the CSF approach paves the way for delivery of the “right”
information to managers, by itself CSF does not ensure the consistency of a manager’s perceptions with the overall strategic objectives. That concern remains part of the basic responsibility of top management for goal setting
TABLE6.5 Sources of Critical Success Factors
1. Industry-based factors: Determined by the characteristics of the industry itself. For example, industry-based critical success factors of supermarkets include: (1) have the right product mix available at each store, (2) keep it on the shelves, (3) provide effective advertising to attract shoppers to the store, and (4) develop correct pricing.
2. Competitive strategy, industry position, and geographic location: Factors derived from whether an organization is a dominant or minor force among competitors; the niche it occupies or the basis of its competitive strategy (such as pursuing product differentiation or customer service advantages).
3. Environmental factors: Arising from areas that an organization has relatively little control but which affect performance, such as the cost and availability of energy, government regulations, changing customer demands, and the economy.
4. Temporal factors: Arising from issues that are critical for a time period, such as modernization of the physical plant, which when addressed will no longer determine success or failure.
5. Managerial position: Generic factors associated with each functional management position. For example, manufacturing managers would be typically concerned about product quality and inventory control.
6. Managerial worldview: Factors rooted in the perspectives brought by managers to their jobs, especially in regard to leadership.
Adapted from various working papers and publications of the Center for Information Systems Research, MIT Sloan School of Management.
and establishing performance standards that are valid, realistic, understandable, and measurable. Nevertheless, the use of critical success factors can help reconcile diverging individual views of the organization that may be present even if the organization’s mission is clearly defined and its strategic objectives are explicitly stated. Once the CSFs of individual managers are identified, managerial agreement should be sought in a step that Rockart calls “alignment analysis” to arrive at the collective CSFs for that functional component of the organization.