[Term of the Day]:Critical Success Factor

[Term of the Day]:Critical Success Factor

Term of the Day 
 

Critical Success Factor 

 

Definition — What is CSF?


Critical Success Factor (CSF) is a management term, also known as Key Success Factors or Key Result Areas. The term "CSF" was initially used in the world of data analysis and business analysis. In business, CSF is referred to specific activities, procedures, or areas that are necessary for an organization or project to achieve its mission and for its continued survival. CSF's are unique to each organization and these are required to ensure the success of a project or an organization. These key factors reflect the current business and future goals of an organization. Many business process improvement systems seek to identify the critical success factors of a product, service, or business as a whole. Typical CSFs might be the need to control costs, increase marketing conversions or make a better product. 

Here are few examples of CSF:

  • For an international package delivery system like FedEx, Timely delivery of consignments can be considered as its CSF.
  • In organizations with departments focused on customer relationships, a CSF for managers in these departments may be customer relationship management.
  • Dell’s competitive approach to the marketing of small, inexpensive computers can be considered as the CSF identification for all computer manufacturers.

The concept of critical success factors was first introduced in the 1960s by McKinsey & Co.'s D. Ronald Daniel, then further expanded on and popularized a decade later by John F. Rockart, an organizational theorist and senior lecturer at MIT's Sloan School of Management.