CSF's and KPI's

Written by

Carissa O'Connell

Jan 2022

Updated: Jan 2024

The Power of CSFs and KPIs

When it comes to running a business, it needs to achieve certain goals to keep productivity going. Once these goals have been established, there are two types of metrics used to ensure that the company is working to reach their goals. The first metric being Critical Success Factors (CSFs), would be the steps taken towards the goal. The CSFs determine what actions are going to be done to achieve these goals, objectives, or strategies. This helps to ensure that resources and time are being used for the right purposes. For the business to determine the importance of each task and to determine how much progress is being made, or if the steps being made towards the goal are achieving the desired results, the organization would use Key Performance Indicators to quantify these results. KPIs apply to every type of business and can be calculated in every type of department. These figures help a business inform their investors and stakeholders, as well as their employees, of the status of their business.

Each type of industry will have a different set of critical success factors because of the type of expectations people have. Examples of critical success factors in the food industry would include quality service, higher quality menu items, increased customer feedback and satisfaction. Whereas in engineering, they would focus on developing reliable designs, cost-effective designs, and identifying and managing project risks (Critical Success Factors, 2021). For the manager of a restaurant, they could make sure their staff are well educated about the menu so that they are able to properly inform customers of their options and provide prompt service. As the manager of a team of engineers, one way they could ensure each member is doing their job is to encourage everyone to share their ideas and designs on a regular basis. This would help prevent overlaps of the same idea or design and create collaborations with those who share similar ideas.

To determine if the steps being taken to reach these goals are appropriate and creating the desired results, a business would use key performance indicators. KPIs help managers see the results of the team’s actions. It also allows the manager to effectively evaluate each member, so they receive appropriate feedback. For a project manager, KPIs help to understand which milestones have been achieved, how many new contracts were made, what is the fulfillment time on an order, and what is the return on an asset are a few examples. These are just a few factors a project manager could define but there are many more. The figures resulting from the KPI provides the team with a visual that gives everyone an idea of how business is flowing.

References

170 key performance indicator (KPI) examples & templates. Qlik. (n.d.). Retrieved February 7, 2022, from https://www.qlik.com/us/kpi/kpi-examples

Indeed Editorial Team. (2021, February 22). Critical success factors: Benefits and examples. Indeed Career Guide. Retrieved February 7, 2022, from https://www.indeed.com/career-advice/career-development/critical-success-factors-examples