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. For example, a CSF for a successful Information Technology (IT) project is user involvement.

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 factors: positive cash flow, revenue growth, and profit margins.
Acquiring new customers and/or distributors -- your future.
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

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 objectives and enable the measurement of strategic performance.

For example:

KPI = number of new customers
CSF = installation of a call centre for providing quotations