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Critical Success Factors

Critical Success Factors (CSF)

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, for an international package delivery system, CSF’s can be
identified such as safe transport of customer consignments, timely delivery of consignment, online status
confirmation system to inform customers and proper packaging and handling.
Critical Success Factors differ from organization to organization. While approving any project, the
management may evaluate the project on the basis of certain factors critical to the success or failure of the
project. For instance:
Money factors: positive cash flow, revenue growth, and profit margins.
Acquiring new customers and/or distributors
Customer satisfaction – No. of complaints, after sales service
Quality – Customer feed back on the product.
Product / service development -- what's new that will increase business with existing customers
and attract new ones?
Intellectual capital – enhancing production techniques and acquiring knowledge relating to
advancement in hardware/machines, equipment, processes.
Strategic relationships -- new sources of business, products and outside revenue, sub contracting.
Employee development and retention –
Corporate social responsibility
Corporate Governance

27.1 Sources of Critical Success Factors
Critical Success Factors have to be analyzed and established. CSF’s may be developed from various sources.
Generally four major sources of identifying CSF’s are
Industry CSFs resulting from specific industry characteristics;
CSF’s resulting from the chosen competitive strategy of the business e.g. quick and timely delivery
may be critical to courier service business
Environmental CSFs resulting from economic or technological changes; and
Temporal CSFs resulting from internal organizational needs and changes.

27.2 CSF vs. Key Performance Indicator
A critical success factor is not a key performance indicator or KPI. Critical Success Factors are elements
that are vital for a strategy to be successful. A KPI measures the achievements.
The following example will clarify the difference. A CSF for improved sales may be adopting a new sales
strategy through better and regularly arranged display of products in the shop windows. However, the KPI
identified would be the increased/decreased Average Revenue Per Customer as a result of the strategy.
Key Performance Indicators directly or indirectly measure the results of implementation of Critical Success
Factors. KPI’s are measures that quantify objectives and enable the measurement of strategic performance.

Computing Environments
Availability of information to various users also depends on how the information is processed, at what
location the information is processed and where and to whom it is available after being processed. This
leads us to the issues like processing information at one location or different locations. Organizations work
with various computing environments for proper use of information system
Stand Alone Processing
Centralised Environment
Distributed Environment
Web Based Environment
Stand Alone Processing
Stand-alone, self-contained computer is usually a microcomputer that is not connected to a network of
computers and can be used in isolation from any other device. The processing activities undertaken on
such a computer are usually termed as stand-alone processing.
Stand alone environment may exist in some organization, but is not the generally followed practice in
today's business environment. Therefore we will not be discussing this environment.

27.3 Centralized vs. Distributed Processing
Centralized Processing is performed in one computer or in a cluster of coupled computers in a single
location. Centralized processing was the architecture that evolved from the very first computers; however,
user access was via dumb terminals that performed none of the primary processing. Today, centralized
computers are still widely used, but the terminals are mostly full-featured desktop computers.
Distributed processing refers to any of a variety of computer systems that use more than one computer, or
processor, to run an application. More often, however, distributed processing refers to local-area networks
(LANs) designed so that a single program can run simultaneously at various sites. Most distributed
processing systems contain sophisticated software that detects idle CPUs on the network and parcels out
programs to utilize them. Another form of distributed processing involves distributed databases, databases
in which the data is stored across two or more computer systems. The database system keeps track of where
the data is so that the distributed nature of the database is not apparent to users.
Distributed processing is a programming paradigm focusing on designing distributed, open, scalable,
transparent, fault tolerant systems. This paradigm is a natural result of the use of computers to form
networks. Distributed computing is decentralized and parallel computing, using two or more computers
communicating over a network to accomplish a common objective or task. The types of hardware,
programming languages, operating systems and other resources may vary drastically. It is similar to
computer clustering with the main difference being a wide geographic dispersion of the resources.
As the terms can explain, processing can be done at one location in case on centralized or at different
locations in case of distributed processing. The question arises is how both types of processing are different
from each other.

27.4 Web based Environment
The typically refers to the use of web, internet and browser based applications for transactions execution. In
Web based environment, clients connect to the application through Broad-band or base band/dial up
connection. Application is located on the enterprise server which is accessed by the client through the
internet connection. Access may be given to single application software or the entire operating system. Web
based environment can be combined with and applied to both centralized or decentralized to optimize the
Web based architecture can be used, either to give access to the company employees to the information
system e.g Virtual Private Networks (VPN) in case of banks or to give access to any body and every body to
company’s information system.
Following example can explain the concept in a better fashion. Two users A & B present at remote
locations or we can say outside the organization may want to access the server located within the
organization. They may get connected with the internet and access the server located in the organization.
The server needs to be online as well so as to be accessed by A & B through any of the means (broad band,
base band, wi-fi, or satellite). Hence data can be transmitted and retrieved using the internet. Availability of
connection of proper bandwidth allowing appropriate internet connection speed is critical to both
transmission and retrieval. Due to this reason, companies have taken dedicated lines to enjoy uninterrupted

High (since more than one
machines are involved)
Low (since processing
managed at one
High (Physical and Logical
controls distributed to all
servers, therefore requiring
high level of security
High (Physical and
Logical Controls)
Controls integrated but
distributed to the various
Controls Integrated
but limited to central
Flexible (can be increased by
distributing the task on multiple
Limited (Depends
upon the central
Processing managed On multiple machines
at one server
Aspect Centralized Distributed


27.5 Internet
An interconnected system of networks that connects computers around the world via the TCP/IP protocol.
Companies contact Internet service providers for availability of connection which allows them to be a part
of internet. An intranet is a private enterprise owned communication network that uses Internet Protocols,
network connectivity, and public telecommunication system to share organization's information or
operations with its employees, and to enable the employees to communicate with each other.
The Internet‘s technological success depends on its principal communication tools, the Transmission
Control Protocol (TCP) and the Internet Protocol (IP). They are referred to frequently as TCP/IP. A
protocol is an agreed-upon set of conventions that defines the rules of communication. TCP breaks down
and reassembles packets, whereas IP is responsible for ensuring that the packets are sent to the right
Data travels across the Internet through several levels of networks until it reaches its destination. E-mail
messages arrive at the mail server (similar to the local post office) from a remote personal computer
connected by a modem, or a node on a local-area network. From the server, the messages pass through a
router, a special-purpose computer ensuring that each message is sent to its correct destination. A message
may pass through several networks to reach its destination. Each network has its own router that
determines how best to move the message closer to its destination, taking into account the traffic on the
network. A message passes from one network to the next, until it arrives at the destination network, from
where it can be sent to the recipient, who has a mailbox on that network.

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