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
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
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
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.
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.
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
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.
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
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).
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.
Su b-org anizatio nal
· S trategy
· Ob jectives
· Go als
Su b-org anizatio nal CSFs
Individu al mana ger
· Goals
· Ind iv id ual CSFs Co rp ora te
· S trategy
· Ob jectives
· Go als
Co rp ora te CSFs
En viro nmen ta l factors
En viro nmen ta l factors
En viro nmen ta l factors Te mporal
factors
Te mporal factors
Te mporal factors Indu stry
CSFs
Su b-Ind ustry CSFs
or Fu nctiona l
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.
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
- 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
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
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).
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
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.
Man age r 1 Determine
Individ ual CSFs
Man age r 2 Determine
Individ ual CSFs
Man age r n Determine
Individ ual CSFs
Organ izationa l 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.
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.
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.
Strate gic Business Plan ning
Strate gic IS-P la nning or
Info. req uire ments an alysis
Resource a llo cation or
IS in vestme nt p la n
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
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 Strate gy
Co mpetitive So cial/ Po litical
Strate gic
Goa ls CSF
CDS
IS Produ cts
an d Se rvic es S
D M VBP
CAS
Exte rn al Strate gic Mod els
Strategic Busine ss Planning
Strategic I S Planning
I S I nvestment
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.
- 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.
Strate gic go als
CSFs
Va lu e-based proc esses
Critica l Dec ision Se t Critica l
Assump tio n Set
EIS MIS DSS
Figure 5. Potential IS-services or IS-markets defined by the primary planning products.
