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Working paper within the Information System Science’s project, ISV-WP-7.
CRITICAL SUCCESS FACTORS
A SURVEY
Niclas Eberhagen
Mansour Naseroladl
Department of Mathematics, Statistics and Computer Science
Växjö University
Sweden
May 1992
Abstract
Any manager within an organization has specific information needs due to his position,
responsibilities, functions and goals, both those on which his performance is measured and
those he has secretly stated to himself. The problem is how to define the information needs
as to satisfy the manager in his goal attainment. In this report we have presented a survey of
the critical success factors method that can help managers in defining their information
needs. The aim of our study has been to put the focus on a method that takes into
consideration the many types of information and goals, both the individual as well as the
organizational, and that may function as an information analysis tool in an IS-planning
process.
Keywords: Critical Success Factors, Managerial information needs, Information system,
Strategic IS-planning process.
1
Content
1. Introduction ........................................................................................................................ 2
1.1 Background ...................................................................................................................... 2
1.2 Definitions of terms .......................................................................................................... 3
2. Purpose and aims of the report ........................................................................................... 4
3. Method ............................................................................................................................... 4
4. Comparable approaches to the CSF method ...................................................................... 5
4.1 By-product technique ....................................................................................................... 5
4.2 Null approach ................................................................................................................... 5
4.3 Key indicator system ........................................................................................................ 5
4.4 Total study process ........................................................................................................... 5
4.5 Comments on the methods ............................................................................................... 6
5. The CSF method ................................................................................................................. 7
5.1 Definition of the CSF ....................................................................................................... 7
5.2 Varying CSFs depending on manager .............................................................................. 7
5.3 Five sources of CSFs ........................................................................................................ 8
5.4 Different classifications of CSFs ...................................................................................... 9
5.5 Hierarchical nature of CSFs ............................................................................................. 9
6. The case of Asea Brown Boveri ....................................................................................... 11
7. The interview process ....................................................................................................... 14
7.1 The interview .................................................................................................................. 14
7.2 The analysis of the results .............................................................................................. 15
7.3 The results from Asea Brown Boveri ............................................................................. 16
8. The CSF method in the IS-Planning ................................................................................. 17
8.1 The IS-Planning process ................................................................................................. 17
8.2 The Strategic IS-Planning............................................................................................... 18
8.3 Consistency and validity ................................................................................................ 20
9. Final discussion and comments ........................................................................................ 21
9.1 Critiques of the CSF method .......................................................................................... 21
9.2 The CSF method in information analysis ....................................................................... 21
9.3 The CSF method compared to the MBI method ............................................................ 22
9.4 Experiences made during our study ............................................................................... 23
10. References ...................................................................................................................... 24
2
1. Introduction
We will in this report present a survey of the Critical Success Factors method, abbreviated as
the CSF method, which in an appropriate way addresses the managerial information needs
that is important to success. The following quotations illustrate the above stated.
"Faced with an increasingly complex world, managers today are deciding that they need
access to the information which is pertinent to their particular roles and responsibilities." (Bullen and Rockart, 1981, p.383)
"The first thing about information systems that strikes me is that one gets too much
information. The information explosion crosses and criss-crosses the managers’ desks with a
great deal of data. Much of this is only partly digested and much of it is irrelevant...." (Rockart, 1979, p.82)
"I think the problem with management information systems in the past in many companies
has been that they are overwhelming as far as the executive is concerned. He has to go
through realms of reports and try to determine for himself what are the most critical pieces of
information contained in the reports so that he can take the necessary action and correct any
problems that have arisen." (Rockart, 1979, p.82)
The essence of these three above quotations implies that there is a problem of addressing
managerial information needs specific to a manager. The fact that each manager has specific
information needs should be clear but the lack of a good method in order to help him
determine his needs is the most obvious fact.
1.1 Background
The requirement for defining appropriate managerial information needs in a clear and
meaningful way was first approached by D. Ronald Daniel in 1961 in the management
literature. Based on this concept Rockart (1979) outlined and developed a method that
focuses on the individual manager and his current information needs hard as well as soft.
Also taking into consideration that the needs vary from manager to manager and are time
dependent. Later Bullen and Rockart (1981) took this method a step further by introducing a
broadened definition of the method to be used as a MIS planning tool. They also provided a
structured way of conducting an application of the method.
One reason for writing this report is that we found in our studies the usefulness and the
applicability of this method answer a lot of questions when it comes to determining what is
important information to the manager.
Another reason for delving into this kind of study is that it is a continuation of our previous
studies and therefore is of profit to us when it comes to deepening our knowledge in the field
of information systems.
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1.2 Definitions of terms
Before we delve into the realms of management and organization it is suitable to define the
terms closely linked with the management of organizations:
Critical success factors - are those few variables that affect a manager in achieving his goals
for his current or future areas of activity. The method helps defining those variables and the
information needed for every variable. Thus the manager gains a better understanding of his
situation. For every goal a manager has there may be many CSFs affecting them.
Strategy - "Strategy is the pattern of missions, objectives, policies, and significant resource
utilization plans stated in such a way as to define what business the company is in and the
kind of company it is or it is to be. A complete statement of strategy will define the product
line, the markets and market segments for which products are to be designed, the channels
through which these markets will be reached, the means by which the operation is to be
financed, the profit objectives, the size of the organization, and the "image" to which it will
project to employees, suppliers and customers."
Objectives - "Objectives are general statements about the directions in which a firm intends
to go, without stating specific targets to be reached at particular points in time."
Goals - "Goals are specific targets which are intended to be reached at a given point in time.
A goal is thus an operational transformation of one or more objectives."
Measures - "Measures are specific standards which allow the calibration of performance for
each critical success factor, goals or objectives. Measures can be either "soft" - that is,
subjective and qualitative- or "hard"-that is, objective and quantitative."
The above definitions are the same as used by Rockart and Bullen (1981, pp.385). However
they are necessary to establish in order to conduct a meaningful discussion of the method.
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2. Purpose and aims of the report
In this report we want to expose the CSF method and to state what this method is and what
can be achieved with it. This is to be done in the following four aspects:
- Give a synopsis on other methods and techniques as an attempt to show other concepts of
extracting managerial information needs, before we state what the CSF method is by
giving a definition of it. This will be done in chapters 4 and 5.
- Try to apply the method in a case study, thus trying to exemplify what a CSF is and how
to go about when applying the method. This will be done through chapters 6 and 7.
- Showing the CSF methods usage as a tool or technique in an IS-planning process, i.e.
showing the method as a strategic information system analysis tool. This will be done
through a study of the IS-planning process and the strategic IS-planning process in
chapter 8.
- In chapter 9 we discuss some critiques of the CSF method and make a comparative study
between the CSF method and the MBI method.
3. Method
The study we have conducted has taken the form of a literature study. We have used Libris
and Helecon, two databases consisting of reports and books in the faculty of economics. We
have looked at references in the latest articles on the topic in order to get the most relevant
references, i.e. we have performed a reversed chronological hierarchical tree structure search.
We have analyzed a study of one of the divisions at Asea Brown Boveri in Ludvika. The
study was based on interviews, made by two students, Dalhman and Naseroladl (1990), with
five managers at that division. The interview at that time was focused on the division’s
environmental scanning process. However careful analysis elicited what is relevant in the
present study. The analysis is done in order to study the individual managerial information
needs and to study their individual CSFs but also to show us what a CSF is.
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4. Comparable approaches to the CSF method
We will present four ways of dealing with managerial information needs; the By-product
technique, the Null approach, the Key Indicator system and the Total study process. All of
these are mentioned by Rockart (1979) in his first study where he gives a brief synopsis on
each of them. Some comments on these approaches are presented in section 4.5.
4.1 By-product technique
In this approach little attention is paid to the real information needs of the manager. The
firm's computer based information system is focused on handling routine paperwork
processing, i.e. payrolls, sales-budgets, etc. All reports reaching the manager or management
are often by-products of the existing system. The reports going up are often what lower levels
feels useful and should be brought to the manager’s attention. Sometimes this distribution of
reports could very well be based on a long ago forgotten one time request made by the
manager for some specific event. The request has then in the lower levels been made an
ongoing periodic process.
This method has been the most predominant in recent years and leads to a welter of reports
landing on the manager’s desk. There have been no means for the manager to actually specify
what he really needs.
4.2 Null approach
Followers of this approach state that managerial activities are dynamic and ever changing so
one cannot predetermine what the information needs will be at any point of time during any
activity. The managers rely on future-orientated informal information of subjective nature,
often quickly assembled, which is spread by word of mouth from advisers. The computer
based reports, no matter how well developed, are considered not useful because of the
inadequacy of the information systems. Heavy reliance of oral communication and soft
information is advocated through this approach.
4.3 Key indicator system
In a key indicator system the technique is based on three concepts. Firstly, to define a set of
keys that defines or indicates the health of the business. Information is gathered about each
key indicator. In the second concept thought is put into exception reporting of functions that
differentiate from expected results, i.e. give the manager the ability to follow up those reports
that indicate a significant exception of performance in some function in contrast to
predefined key values. The third concept involves display of these reports in the context of
the expanding availability of better, cheaper and more flexible visual display techniques.
4.4 Total study process
Managers in different levels and different functions are asked to define their information
needs, and the results of the interviews are later compared with the existing information
system. The objective of this method is to establish a comprehension of the overall business
and the information needs linked with the business. An understanding of the existing
information systems is established and the gaps between them and the requested information
6
system are tracked down. A plan for binding together the current systems with new necessary
ones is implemented. This is a top-down method where results of the study either can be
biased towards the top management activities needs or toward the paperwork processing
depending on the team of analysts. A current popular implementation of this method is IBM's
Business System Planning method which is aimed to a top-down analysis of the
organization's information needs.
4.5 Comments on the methods
The by-product technique is an inexpensive way of giving the manager information that
satisfies his role of controlling the management activities. However the information given is
in such a form that it leads to heaps of reports that only contain small portions of what is
actually necessary to him for the current activity. The method takes no consideration to the
soft informal information need that in effect accounts for a high basis of all decision making
of a manager.
The null-approach does take this into consideration and is really the most inexpensive
solution by calling all information systems for useless and advocate the role of soft, informal,
oral information. The major fault of this approach is that it misses out the need for defining
the hard computer based information used for controlling the business.
The key indicator system gives the manager a significantly useful amount of information
which is objective, quantifiable and computer-based. The disadvantage of this method is that
the manager obtains too many financial and statistical variables of non-subjective nature.
This kind of presentation makes the information relatively complicated for the manager to
analyze. In this method the focus tends to lean towards computer based information alone.
The last way of dealing with managerial information needs is an easily understood one.
Getting a solid understanding of the overall needs of the business is a good starting point. It
leads to simplified means of getting hold of what information system requirements will be
needed or added to the existing information system in order to make it as complete as
possible. However this method speaks of heavy use of man-power and high costs in
procedural conducting. Another problem is the huge amount of data collected and the
difficulty in devising reports that satisfy individual managers. It is indeed a total study but in
the aspect of cost-benefit it may not be a preferred one.
The above discussed aspects of dealing with managerial information needs suffer all from a
couple of drawbacks. They are either highly costing in manpower and cash, as in the total
study, or giving too much information, as such is the case of the by-product method, thus
giving a lot of irrelevant information. The information given is often of statistical nature and
not paying any attention to the fact that needs vary from time to time. It is not always clear
that the individual managerial information needs are satisfied.
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5. The CSF method
There exists a method, named the CSF method, which answers to a lot of those drawbacks
stated in the previous chapter:
"The CSF method focuses on individual managers information needs and on each manager's
current information needs both hard and soft. It provides for identifying managerial
information needs in a clear and meaningful way." (Rockart, 1979, p.85)
5.1 Definition of the CSF
The Critical Success Factor is a method that answers the question of what information is
needed.
Many managers spend most of their time and energy, at work or leisure, thinking about those
few areas of activity which are of their concern. Mostly thinking about how the performance
could be improved and what is affecting the performance.
Critical success factors are those few variables that affect a manager in achieving his goals
for his current or future areas of activity. Having these variables brought forth facilitates a lot
of the manager’s work. These key variables can be used in the company's planning process,
in helping to improve communication among the managers or as an aid in the information
system planning.
The CSF method is applied in the form of interviews usually conducted in two or three
separate sessions. Initially the goals of the manager are discussed and recorded and the CSFs
that affect these goals are brought forth. In the second session the information needed about
these CSFs and a set of measures, of how and where to obtain the information, are
established. The measures are treated as directions where to go in the planning process of the
information system, i.e. where and how information should be collected and treated. We will
return to the interview process later, in chapter 6.
It is important to a manager to determine his goals but equally important to determine those
variables that will affect the achievement of his goals, failure or success. These critical key
variables, made explicit, should receive constant attention from the manager, i.e. have their
current status continually measured.
5.2 Varying CSFs depending on manager
CSFs are related to a specific individual in his specific situation. These must be tailored to
the industry and company. These will vary, manager to manager, depending on position
within the hierarchy of the organization. The CSFs will change when the environment of the
industry changes, the position of the company within the industry changes and when new
problems arises before the manager.
CSFs do not have a standard set of measures, like key indicators, which can be applied to
everything within the organization. These are not factors which solely take into consideration
historical, aggregated or accounted information. CSFs are those specific variables of main
8
importance to a specific manager at a specific point of time. These demand specific
situational measures.
5.3 Five sources of CSFs
CSFs have been found to arise from five different sources:
- Industrial
The industry in itself hosts a set of CSFs which are defined by the characteristics of the
industry. Each company within the industry must take these into consideration.
- Competitive and positional
Each company is in an individual situation within the industry depending on its history,
geographical situation and competitive strategy. These dependencies will surely dictate some
of the CSFs.
- Environmental
From environmental sources emanates those factors from areas which a company has little or
no control of, such as fluctuations of the economy or national politics. There could well be,
for some companies, factors like different trends and energy sources.
- Temporal
CSFs arising from temporal sources are factors that become critical for a period of time and
then decline in importance, e.g. breakdown of a firm's major computer system.
- Managerial
Depending on the manager's functional situation different CSFs will be generated, e.g. a
manager concerned with economics will certainly not be concerned with those of a
production manager.
These sources were discovered by Rockart (1979) in his early studies and have been
acknowledged in a later study made by Rockart and Bullen (1981).
9
5.4 Different classifications of CSFs
CSFs can be classified in three dimensions; internal CSFs versus external CSFs, monitoring
CSFs versus building/adaptive CSFs and the above mentioned five sources. These ways of
classifying the CSFs are useful for an analyst in that they form a pattern that shows what the
manager's world view looks like.
The first classification, internal versus external, meaning that internal CSFs are related to the
manager's department or the staff of people he controls, i.e. CSFs related to issues and
situation within the managers control. External CSFs are those which most often are beyond
the managerial influence such as the price of raw material.
The second classification, monitoring versus building/adaptive, meaning how the manager is
related to his function. If he is concerned a lot with the performance of his department and
puts a great amount of effort in guiding and measuring that performance the manager is
monitoring and thus have CSFs related to monitoring. On the other hand, a manager who is
much concerned about future planning and changes is then building/adapting, thus being
concerned with CSFs related to building/adapting.
A manager is a mix of both but often tends towards one or the other. The classification can
help to visualize what kind of CSFs a manager is concerned with.
5.5 Hierarchical nature of CSFs
From an individual manager's perspective he has his own CSFs that must be paid attention
to. From the company's perspective four hierarchical levels of CSFs can be discerned:
industrial, corporative, sub-organizational and individual.
Industrial CSFs affects every organization within an industry in its development of strategies,
objectives and goals. Strategies, objectives and goals developed by a company leads to a
specific set of corporate CSFs. Every corporation's set of CSFs are unique to its own
circumstances.
Corporative CSFs then becomes the input to a determination process for each sub-
organization within the corporate. Analysis of corporative strategies, objectives, goals and
CSFs including environmental and temporal factors leads to a new set of CSFs for each sub-
organization.
The process can continue as deep as there are levels within the hierarchy. All sub-
organizations are affected in their development of strategies, objectives and goals by the
temporal and the environmental CSFs as well as those from higher levels. Every manager at
every level in the organization has specific CSFs that are determined by the role of the
manager and the temporal factors. The above discussed is summarized in figure 1 below.
10
Sub-organizational
· Strategy
· Objectives
· Goals
Sub-organizational
CSFs
Individual manager
· Goals
· Indiv idual CSFs
Corporate
· Strategy
· Objectives
· Goals
Corporate CSFs
Environmental
factors
Environmental
factors
Environmental
factors
Temporal
factors
Temporal
factors
Temporal
factors
Industry
CSFs
Sub-Industry
CSFs
or
Functional
CSFs
Role
CSFs
Figure 1. From "A Primer on Critical Success Factors" by C.V. Bullen and J.F. Rockart, 1981, Sloan School of
Management, June.
11
6. The case of Asea Brown Boveri
To exemplify what CSFs might be and how they can be derived we have looked at a division
of Asea Brown Boveri (ABB) in Ludvika, HV/SWITCHGEAR AB. Our study is based on a
series of interviews with the top managers made by Dalhman and Naseroladl (1990). Their
aim was to establish an understanding of the information flows, of both external and internal
types, of the company. They were also interested in the company's environmental scanning
process. Their results form the basis of our study in this chapter.
The interviews were made with the following managers:
- Division CEO
- Sales and marketing manager
- Construction manager
- Economy manager
- Production manager
The strategic goal of the division was to give technical support and services to their clients
but also to develop, construct, produce and market switchgears, within the electrical power
industry.
Through the interviews the divisional information needs showed to be as follows:
Object of information need
Clients
Competitors
Suppliers
Countries
ABB Corporation
Other divisions (ABB)
Information needed
Long-range strategies
Policies
Order specifications
Solvency
Technological level
Price levels
Advisory service
Price levels
Quality
Trade policies
Energy policies
Inflation
Laws and legislation
Customs
Recommendations within ABB
"Guidelines" when doing business
Coordination of information and reports
The division’s information needs were mainly satisfied through the following sources:
- Magazines and other literature covering the technical sectors
- Publications from competitors
- By asking their clients and competitors
- International conferences
- Ministry of foreign affairs
12
- Computer department within the corporation
- Information databases
- Lawyers
During the interviews the managers were asked to state their objectives or goals and they put
them in terms of area of activity. They were also asked about their individual information
needs during their daily activities. From the managers' goals or area of activity and their
individual information needs we boldly swung the sword of analysis in order to get an idea
what the individual managers' CSFs might be. We arrived with the following lists of their
CSFs which we present below manager by manager together with their goals or area of
activity.
Division CEO
Managing and monitoring of the divisional activities
Giving system support
Giving technical support
Sales and marketing manager
Order processing
Marketing of products
Selling of product
Marketing research
Construction Manager
Mechanical and electrical construction
Evaluation of products
Development of material and processes
Order processing of nonstandard products
Economy manager
Liability of the products
Running divisional economy
Handle internal and external divisional reports
Profitability improvement
Coordination of computer issues
Production manager
Order processing
Assembly of switchgears
Divisional production
Meeting environmental standards
CSFs
Client strategies and policies
Trade policies
Energy policies
Infrastructure
Currency
Environmental policies
Competition
Meeting trade policies
Meeting conventional standards
Development of the market
Price levels
Meeting recommendation within ABB
Client solvency
Meeting technical standards
Access to technical and material information
Client order specification
Access to product information
Technological legislation
Meeting profit demands
Currency
Trade policies
Recommendations within ABB for business activities
Allocation of the production resources
Meeting technical competition
Following up technical innovations
Infrastructure of client
Client strategies
From these individual managerial CSFs we want to establish a picture of the organizations
CSFs and thereby see what affects the organization's goal attainment. But how to go about?
13
Bullen and Rockart (1981) states that by aggregating the top managerial CSFs an analyst can
obtain a picture of the organizational CSFs. This can be done by pointing out those CSFs that
are defined by more than one manager, i.e. through the intersection of the managerial CSFs,
the analyst can then derive the organizational CSFs. Bullen and Rockart (1981) supports
these thoughts by stating that through studies it has proven to be, even though the managers
are at different levels and have different functions and responsibilities, a recommendable way
of going about.
We have done this and have come up with a list showing the organizational CSFs of the
division.
Organizational CSFs
- Energy and environmental policies
- Trade policies
- Client strategies
- Meeting technical standards
- Currency
- Infrastructure
- Technical innovation
The purpose of this study was to give some examples of different individual managerial
CSFs, depending on function and role, in an organization, as in this case within the electrical
power industry.
We also wanted to show how an analyst might go about in order to derive the organizational
CSFs and what these might look like.
However, these results must be regarded as purely hypothetical due to the fact that we have
not been able to perform a real study within the division and we have not been able to have
our results validated or verified. To do so requires interviews with the managers where the
analyst works along-side the managers who take an active part in the analysis. The interview
process will be discussed in the next chapter.
For the ones interested in taking part of other types of CSFs, from other case studies, we
recommend reading Rockart (1979) and Bullen and Rockart (1981).
14
7. The interview process
"The CSF interview process is designed to have each manager explicitly state those factors
which are critical, both for himself and the corporation. By voicing these CSFs managers are
able to sharpen their understanding of the business's priority areas. The ways in which the
CSFs might be measured are also discussed, which lead to considering what information is
necessary." (Rockart and Crescenzi, 1984, p.7)
As stated earlier the CSF study is performed as an interview conducted in two or three
sessions. First the managerial goals and CSFs are discussed, thus establishing the managerial
information needs. Then measures of each CSF and the information needs that each measure
induces are defined giving us a plan or model showing us the managerial information
requirements.
Bullen and Rockart (1981) have detailed the interview procedure and techniques for the
interviewer, in helping the interviewees in thinking about and identifying their CSFs.
7.1 The interview
The first session is the preliminary interview with the manager. The analyst must pay
attention to all of the goals of the manager both the formal, which are those the manager is
measured on, and the informal ones, most often the vital ones to him and his function. The
discussion is meant to lead in the direction of eliciting the CSFs which affect his goals and
the information needed about these CSFs. Helping the manager to a better understanding of
his information needs is one objective of the method. This could very well be the first time
the manager sees his information needs in a structured way.
The analyst must go to length in order to extract all of the CSFs possible. In assisting him,
and helping the manager to concentrate on his CSFs the following questions could be posed:
"In what one, two or three areas would failure to perform well hurt you the most? In short
where would you most hate to see something go wrong?" (Bullen and Rockart, 1981, p.419)
"Assume you are placed in a dark room with no access to the outside world, except for the
food and water, today. What would you most want to know about the business when you
came out two weeks later?" (Bullen and Rockart, 1981, p.419)
The analyst could also compare the CSFs with the sources from section 5.3 and the
classifications from section 5.4 in order to find out if the manager is only looking at one type
of CSFs depending on what is currently occupying his mind. The manager could also be
talking about the same CSF but from different perspectives which the analyst must consider.
The manager ranks the CSFs and makes a list of them showing the most important one at the
top. Rockart (1979) recommends a number of seven as a maximum.
15
7.2 The analysis of the results
After the first interview session the results obtained should be analyzed by the interviewer in
order to get a clear understanding about the company's position and situation. The results
should be reviewed:
- in order to check whether the managers have covered all of the major areas of his
function;
- in order to obtain a common pattern of CSFs due to common managerial perception of
problems, opportunities, industry structure and etc, by comparing the interviewees
against each other.
The analyst may have to go back to the managers for clarification or sharpening up the
results.
To obtain a picture of the organizational CSFs the analyst could aggregate several of the
individual managerial CSFs as shown in figure 2.
Manager 1
Determine
Individual
CSFs
Manager 2
Determine
Individual
CSFs
Manager n
Determine
Individual
CSFs
Organizational
CSFs
Figure 2. Process of aggregating individual managerial CSFs in order to get the organizational CSFs.
This is a bottom-up process giving the analyst a mean to discover exactly which information
databases are most necessary to support the managers due to the fact that common CSFs and
measures may induce the same information needs.
Having now gained a plan or model showing us the information structure within the
organization, consisting of both common and individual information needs, we will, if this
model is accepted by the management, continue onto further analysis of the information
requirements.
Now we go on to the second session with all of the managers. Here measures for each of the
CSFs are discussed and the information needed for all of the measures, both hard and soft, is
defined. Thus we obtain a plan or model showing us a set of information requirements that
could have strategic value to the organization. This will show and help in deciding what
products and services an information system might provide us with. However this is beyond
the scope of our discussion here.
16
7.3 The results from Asea Brown Boveri
In the interview process described in section 7.1 the managers take an active part during the
process. Thus results can be verified or restated. The same people who do the interview with
the managers are the same that will analyze the results and are therefore in the position to
return quickly to the manager for supplementary details. Due to the circumstances of our
study of the division at Asea Brown Boveri we could not go back and check the results with
the managers and sharpen them up.
We derived from the managers stated goals, of their functions, and their information needs
the CSFs which would affect their activities the most. We compared the results from the
interviews in order to look for common perceptions of problems and opportunities, but also
in order to get a picture of the organizational CSFs according to figure 2.
The aggregation of the individual manager's CSFs gave us the following organizational CSF
picture, which is presented in chapter 6:
- Energy and environmental policies
- Trade policies
- Client strategies
- Meeting technical standards
- Currency
- Infrastructure
- Technical innovation
The common managerial CSFs presented give us a picture of company's position and
situation. Therefore it gives us the possibility to perceive those factors which are of strategic
value to the organization.
From the aggregated CSF picture one can derive the organizationally induced information
needs. Thus it may provide us with the means to discover which potential information
databases that might be necessary in order to support the organization in its activities. The
organizational CSFs picture gives us the basis on which the information architecture may rest
upon.
With this information analysis done we could go on to find the measures of the CSFs, but
that requires the participation of the managers, thus our study ends here. The case study is
intended to show the preliminary information analysis and beyond this point we would
proceed further with the information system planning.
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8. The CSF method in the IS-Planning
In the previous chapters we have spoken of what a CSF is and shown examples of CSFs
through a case study and briefly explored the process of determining these CSFs through the
interview process. In this chapter we will attempt to make some use of the CSF concept.
Bullen and Rockart (1981) have mentioned three usages of the CSF:
- As a method in helping the manager determining the wanted information. That is through
a study of the managerial goals and the CSFs affecting these goals determining measures
of his CSFs. Then establishing the information needs these measures induce and then
determining the reports that will satisfy these needs. From the reports key information
databases are established. However building an information system just for one manager,
even if he may be the top executive, is too expensive for most companies, as Bullen and
Rockart (1981) pointed out.
- as an aid in the company's long-range strategic planning and allocation of resources. This
usage we do not intend to discuss any further in this report.
- Last as an aid in the company’s IS-planning process. This third usage is also the most
widely spread. This is the usage we wish to explore by putting the CSF method into the
IS-planning process as an information requirements analysis tool.
8.1 The IS-Planning process
Bullen and Rockart (1981) have detailed a procedure for the IS-planning process which
purpose is that of producing an MIS. However the model we will endorse is the one
developed by Bowman, et al. (1983), see figure 3. This model is also adopted by Henderson
and Sifonis (1988) which we will refer to later.
Strategic Business
Planning
Strategic IS-Planning
or
Info. requirements
analysis
Resource allocation
or
IS investment plan
Figure 3. The three-stage planning model.
This model is a three stage model of the planning process. The first stage is the strategic
business planning whose main objective is to establish or create strategic goals that align to
the organization's strategic goals and a set of assumptions about the environment underlying
these goals. More can be achieved through the business planning but in our discussion it is
satisfactory for us just to assume the above products because that is what we will take into
consideration later in our discussion.
The second stage is the information requirement analysis or the strategic IS-planning stage.
The purpose of this stage is to make use of the above mentioned goals in order to obtain
organizational information requirements. These requirements are required organizational
wide for identifying possible markets for applications and other support systems. It is in this
stage we will meet the CSF method which both Davis and Olson (1985) and Henderson and
18
Sifonis (1988) make use of as an analysis tool of the information requirements. This we will
discuss further in section 8.2.
The third stage uses as input the product of the information requirements analysis. Here the
resources are allocated. Which applications should be implemented and in what order are
also determined, i.e. determining which ones will have the most strategic impact on the
organization. The IS resources are limited and not everything can be done at once. The issue
may have to be reduced to a question of cost-benefit.
8.2 The Strategic IS-Planning
The strategic IS-planning is based on the business planning process and the strategic goals
which are derived from that process. In the business planning stage, there is a vision which
gives the futuristic picture of the organization and then a more general process of planning
which is called business planning process, see figure 4. These two processes form the
organization's strategic goals. The development of the strategic goals makes the usage of the
CSF method possible.
VISION Strategy
Competitive
Social/ Political
Strategic
Goals CSF
CDS
IS
Products
and
Servic es
S
D
M
VBP
CAS
External
Strategic
Models
Strategic
Busine ss Planning
Strategic
IS Planning
IS
Investment
Plan
Figure 4. From "The Value of Strategic IS Planning: Understanding Consistency, Validity, and IS Markets " by J.C.
Henderson and J.G. Sifonis, 1988, MIS Quarterly, June.
Four products are derived from the CSF study and are called the primary products of the
strategic IS-planning. These products are the following:
- Critical decision sets (CDS)
- Critical assumption sets (CAS)
- Value-based processes (VBP)
- Strategic data models (SDM)
The function of these sets is to reflect different perspectives of information requirements.
The primary products together with the CSFs are used to define markets for the IS-products
and IS-services which may have strategic value to the organization and to justify the
investments necessary in order to implement the IS-products and IS-services. A more
detailed definition of these sets follows below.
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- Critical decision sets
Critical decision sets are those decisions that influence one or more CSFs. For example if
purchasing a car is a CSF, then the decision of which model and to what price, influences the
purchase and therefore is a critical decision. CDSs are used to define possible DSS markets
within the organization, see figure 5.
Strategic goals
CSFs
Value-based
proc esses
Critica l
Dec ision Set
Critica l
Assumption Set
EIS MIS DSS
Figure 5. Potential IS-services or IS-markets defined by the primary planning products.
- Critical assumption sets
Those beliefs that underlie the CSFs are called critical assumption. They are beliefs about the
environment as the managers conceive it, external or internal. CAS is used in defining
markets for EIS. Critical assumption sets are also used to assess the validity of the strategic
IS-plan as they are linked to the ones derived from the business planning process. More about
this in section 8.3.
- Value-based processes
The business processes which are tightly linked to a CSF are called value-based processes
and provide two major contributions:
1. Provides a monitoring and controlling perspective to the potential set of IS market.
2. Providing a direct link to the existing application base.
The VBPs are use to define possible domains for MIS. These give a good base for the IS-
planners to distinguish the existing IS-assets and those which are developed to support
functions or processes.
- Strategic data models
The strategic data models show the significant classes of strategic data and the existing
relations between them. The usage of the strategic data models are in two areas:
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1. Coordination of investment for management support system, like MIS, DSS and EIS.
2. Where to put the focus in order to manage more effectively the data resources.
The strategic IS-planning process does not produce an information system. The planning
products do not define systems which can be directly implemented. There is still the question
of what we should invest in, i.e. where to put our money and on what. This is what the
strategic IS-planning process is about, defining markets for possible information system
services of strategic value.
The strategic IS-planning process does not produce a detailed model showing all the data
necessary but rather shows an information architecture of what we would need and how it
can be assessed.
8.3 Consistency and validity
There are two matters that should be identified in the IS-planning process, internal
consistency and external validity. King (1983) discussed validity and consistency as two
critical components of any systematic evaluation of a strategic planning process.
- Internal consistency
It is very important in an IS-planning process that there is a good interpretation between
different levels of the organization. What is conceived of in one level should be correctly
operationalized in lower ones.
A planner can use the CSFs and assumptions to identify possible inconsistencies and to focus
attention on resolving them. The strategic IS-planning draws forth both CSFs and
assumptions. With these the internal consistency of the plan can be directly assessed together
with the results achieved about behaviors and beliefs in the business planning. A good way
of omitting the problem of internal inconsistency is using large group sessions to try to
validate and consolidate both the CSFs and the assumptions.
- External validity
This refers to the appropriateness of the resulting planning. A risk in the IS-planning process
is to omit or incorrectly address relevant factors, i.e. giving good solutions to the wrong
problems. An external valid planning process is the one which does not suffer from the
collective bias of those concerned with the planning process. A technique which can be
useable in order to decrease the risk of bias, and thus ensure a more valid plan, is a dialectic
planning process.
The Strategic Business Planning process and the Strategic IS-Planning process are closely
linked together not only by the strategic goals, see figure 4, but also by the assumptions
derived from both processes. In the business planning process external models are built of
how the environment is conceived. Similar in the IS-planning sets of critical assumptions are
drawn from the CSF study. The critical assumptions can be fed back to the business planning
process, see figure 4, in order to ensure the validity of the plan by matching them with the
results drawn there and look for inconsistencies.
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9. Final conclusions and comments
This study has been a literature study of the CSF method. Everything that has been said or
done has been from a theoretical and experimental stand point. However, we believe that the
aims set out to achieve we have succeeded with. Since we lack any real case experience it is
hard to evaluate the method and point out pros and cons when it comes to practical usage.
However we can look upon the qualities that others have found out through their studies.
9.1 Critiques of the CSF method
What we have found is that some cons have been raised against the CSF method.
First, as noted by Boynton and Zmud (1984), it has been asserted that the method is difficult
to use, demanding expertise. It is pointed out that for complex organizations whose analyst
does not have the necessary skills and thorough understanding of the organization it is not an
appropriate method to use. However by careful studies of the organization in all aspects and
by performing a sort of a bottom-up study, thus gaining more and more understanding of
organization, this could be overcome.
Another aspect is the threat of interviewer and manager bias introduced during the interview
session. However as Boynton and Zmud (1984) pointed out, referring to a study done by
Munro (1983), that two independent skillfully directed CSF analyses showed up with the
same results thus indicating no threat of analyst-manager bias.
We have also encountered some pros advocating the use of the CSF method.
Boynton and Zmud (1984) showed through their own experiences two key strengths of the
CSF method. First, the CSF method is well received by senior managers as they most often
think in terms of CSFs and should thus intuitively understand the thrust of the method.
Secondly, the nature of the CSF method facilitates a structured top-down analysis or planning
process within the organization.
9.2 The CSF method in information analysis
The CSF method helps in determining what the important information to the manager is.
What is then important information? The answer is that there are no generalized rules about
what the important information is to a manager.
We believe that any such attempt to specify in a generalized manner what should be
important is futile. Because what is important depends on what industry the manager is
within, what roles and responsibilities he has as well as goals, both formal and informal.
What is important information to a manager is that which he needs to know in order to
handle daily whereabouts of his function and in the pursuit of his goals. The information that
he really must get a grip on and which will severely affect him is equivalent to critical
information, which is something he cannot do without.
Do the usefulness and the applicability of this method answer the questions when it comes to
determining what the important information to the manager is? Yes, we believe it does
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because the method takes into account all of the factors mentioned above and as well as all of
the managerial goals. Since the method can help in determining one manager’s information
needs it can help defining that of the organization. Thus the method can be used as an
analysis tool in an information system planning process. This is something that we have
hopefully shown through this report.
In our study of the interview analysis of the division at Asea Brown Boveri we were
interested in the information the managers considered to be important. The success of the
manager's goal attainment is dependent on whether he takes into consideration his CSFs or
not and these induce an information need. Thus by analyzing the goals of the manager, that
directs his activities, and his information needs, which he states to be important, we can
derive the potential CSFs which affect him in his function. This preliminary analysis of the
individual managers' information needs is essential in the building of an organizational
information structure, mainly because it is the fundament of the future information system.
The results from our study are not complete as to the extent of using them as a product of an
information analysis tool. However they show us the direction one might take in the IS-
planning process.
9.3 The CSF method compared to the MBI method
Here we compare the CSF method with a system development method called MBI method
(goal, decision, information) (Apelkrans and Åbom 1998).
The MBI method focuses on the operational problems of the organization and elicits these
problems and examines them in order to provide a solution based on computer techniques.
In the MBI method a great deal of concentration is focused on the analyzing of the total
operation in order to get a good picture of present situation of the company. This will be
done as a beginning phase. After coming to conclusions in this phase one proceeds with the
interview phase with both the employees and the managers. They state what they meet as
problems in their daily activities. These problems are then classified and those which are
most critical are given priority.
The above procedure is different from the CSF where the analyst or the interviewer begins
the interview without any obvious knowledge of the prospective critical areas.
The analysis phase in the MBI method is the most relevant for the comparison between the
methods. In this phase the information study is performed in which one determines what kind
of information the system should contain. In the second stage, how the information will be
produced and processed. In the third stage, the modeling of the database takes place.
To perform the above stages in the MBI method requires different graphs where the attained
information is put together. Therefore it gives a good picture of the problem areas. In the
CSF method it seems that there is no obvious routine that shows how to handle the attained
information.
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Some dissimilarities and similarities are as follows:
- In the MBI method one seeks to get to the problem area or when the problem area is
already known one begins from there. In the CSF method you do not talk about the
problem area but mostly about information needs addressed to the manager and if there is
any problem area that attention should be focused on it will be clarified later.
- There is dissimilarity between methods concerning the type of information they process.
In the MBI method the type of information is mostly internal. The focus is on the
employees and managers. However in the CSF method the types of information may be
both internal and external.
- The third dissimilarity is that MBI method is mostly concerned with hard information
whereas the CSF method takes into consideration both hard and soft information.
- One similarity between the methods is the interview technique. Both methods use the
interview technique to get to the point of interest.
- Another similarity is that both methods are searching for a critical area. In the MBI
method attempt is done to get an understanding about the problem area which is critical
to the company. In the CSF method, attempt is done to get an understanding of the
critical information needs.
9.4 Experiences made during our study
Some of the experiences we have made through our study of the CSF method are those
which concern the literature. To get an understanding of how to go by with the CSF method
and to get a mental picture of how it functions can be somewhat confusing depending on
which author you follow. What is confusing is the way different authors use different
contexts. As an example you may compare Rockart (1979) with Henderson and Sifonis
(1987). They have not the same understanding concerning what the information system is
and where the CSF method is placed in the information system planning process. Rockart
(1979) discusses the information system as something which is derived from the CSF method
and is built upon the conclusions of the method. Henderson and Sifonis (1987) discuss the
whole three stages shown in figure 3 as the information system. This could leave the reader
bewildered in what to believe of the information system.
The experiences, mentioned above, could mainly be due to the fact that as time has gone by
so has the usage of the CSF method been taken further into a broader aspect. The definition
of the information system has gone from something being an MIS to including a wider
organizational aspect of the information system, hosting also DSS and EIS.
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10. References
Apelkrans M and Åbom K (1988) Systemering I. Studentlitteratur, Lund.
Bowman B, Davis G B, and Wetherbe J C (1983) Three Stage Model of MIS Planning.
Information and Management, February.
Boynton A C and Zmud R W (1984) An Assessment of Critical Success Factors. Sloan
Management Review, Summer.
Bullen C V and Rockart J F (1981) A Primer on Critical Success Factors. Sloan School of
Management, June.
Dalhman G and Naseroladl M (1990) Omvärldsbevakning i ABB HV/Switchgear AB.
Informationssytemteori 10p, Institutionen för matematik, statistik och ADB, Högskolan i
Växjö.
Davis G B and Olson M H (1985) Management Information Systems. McGraw-Hill Book
Company, Singapore.
Henderson J C and Sifonis J G (1988) The Value of Strategic IS Planning: Understanding
Consistency, Validity and IS Markets. MIS Quarterly, June.
King W R (1983) Evaluating Strategic Planning Systems. Strategic mangement journal (4:3),
July-September.
Munro M C (1983) An Opinion ... Comment on Critical Succes Factors Work. MIS
Quarterly, September.
Rockart J F (1979) Chief executives define their own data needs. Harvard Business review,
Mars-April.
Rockart J F and Crescenzi A D (1984) Engaging Top Management in Information
Technology. Sloan Management Review, Summer.