Information System Strategies using Critical Success Factor (CSF)

Information system strategies is critical in determining the success of any information technology implementation. The information strategies need to be properly and carefully crafted to compliment and align with current and future business goals and objectives for an organization. Critical success factors (CSFs) can be considered as one of the most important key element in creating and assuring the success to any project implementations. This paper seeks to define and identify the usage, advantages and approach in using CSF as a methodology to define information system strategies.

Index TermsCritical Success Factor, Strategic Information, System Planning, CSF, CSF Analysis

Introduction

In proliferation of Information Technology (IT) in current business environment, Information Systems are often seen as the battering ram to fulfill user demands, support business processes and compete in a massive and intense market competition. The phenomenal growths and advanced demands in providing automation and continuous IT support for business processes have increase the work load and pressure for IT professionals and executives to deliver an often unrealistic expectations and promises [1].

Information TechnologyImage credit

Even though the existence of IT is seems to be in the appropriate path and aligned to the business needs, there is still a great lack of understanding of IT within the executive and boards of most organization [2] which may resulted to inefficiencies in project coordination and management. The inefficiencies are commonly happened due to poor information system strategies derived from less understanding of the information needs and requirement. Consequently, many IT/IS implementations failed to deliver
business needs and return stakeholder investment [3,4,5] due to problem in identifying the actual information needs and requirement.

Although IT are considered as a support to accommodate business processes, top level management need to carefully formulate its information system strategy based on their corporate objectives and critical success factors (CSFs) relating to corporate activities and needs which should also contain a concise summary of the individual business IS strategies and any IT strategies derived for the organization [6].

This paper will explore and discuss on the definition, usage and advantages of using CSF to define information system strategies. This paper also will discuss CSF analysis as one of the methodology used to define and formulate information system strategies for an organization.

Critical Success Factor (CSF)

Critical Success FactorImage credit

Leidecker and Bruno [7] state that critical success factors are those characteristics, conditions or variables that, when properly sustained, maintained, or managed, can have a significant impact on the success of a firm competing in a particular industry. Rockart [8] then introduced the concept of CSFs which defined CSF as the limited number of areas in which satisfactory results will ensure successful competitive performance for the organization. CSFs are the few key areas where “things must go right” for the business to flourish. These key areas are the main concern and agenda which should be treated as one of the most vital aspects in the effort to obtain an absolute understanding of the business processes and structures.

To identify the critical success factors, Rockart suggests two basic steps:

A. Interview This step must be carried out to clarify and record the executive’s goals and to discuss the CSFs underlying to the goals. Thus the CSFs can be clarified and classified.
B. Review The result retrieved from Step A will be reviewed to further discuss measurements and possible information reports.

Through a crystal clear understanding of the CSFs in IT/IS implementation, top level management will effectively determine and response to identified concerns to provide a better solution and thus will eliminate or reduce the possibility of risk and failure.

CSF Analysis

CSF analysis is one of the most important tools in strategic information system planning. It is also can be considered as the most effective technique which involved and required senior management participation in developing the strategy, because it is wholly rooted in business issues and in gaining their commitment to proposed IS actions that contribute to achievement in critical areas [6]. Thus, CSF method has been recognized for its high level of acceptance by senior managers and is considered to facilitate information system planning and requirements analysis [9].

CSF AnalysisImage credit

CSF analysis helps top level management to oversee the whole business structure from top to down as well as the role of information technology in strategic information system planning and understand how current business structure is able to meet its objectives and goals by understanding the company’s critical success factors. By performing CSF analysis, top management and members of the boards should be able to translate and drive the company mission to achieve its vision.

CSF analysis is powerful in a term of identifying and defining key element in strategy development and evaluation. According to Leidecker and Bruno [10], CSF analysis can be used to aid the strategy development process at three specific junctures which are environmental analysis, resource analysis and strategy evaluation;

A. Environmental Analysis Environmental analysis is an assessment about the impact of social, political, economic and technological in surrounding environment which mostly conducted to identify competitiveness, rivalry or threat faced by the organization. Based on review and result retrieved from environmental analysis, sound details on competitiveness, threat and as well as opportunities could be identified and evaluated to benefit the organization.
B. Resource Analysis Resource analysis is the imperative in evaluating company’s resource and inventory. Through an effective assessment in resource analysis, managers will be able to identifies and report the variables and enabler which have been contributing for the success of the organization.
B. Resource Analysis Resource analysis is the imperative in evaluating company’s resource and inventory. Through an effective assessment in resource analysis, managers will be able to identifies and report the variables and enabler which have been contributing for the success of the organization.
C. Strategy Evaluation Strategy evaluation is a methodology to compare strategic alternatives with the specific goals and objectives. Through strategy evaluation, different set of strategy approaches can be tested and evaluated based specific needs and requirement to compliment disparate company goals and mission.

Since CSF analysis now a well-recognized methodology used for IT planning and systems requirements analysis, the process of conducting CSF analysis, especially in the hands of a skilled analyst, can be very revealing and stimulating [11]. The CSF method focuses on the identification of strategic planning and managerial control information required by top management to give the organization an orientation and has been successfully applied in a variety of organizations in areas such as manufacturing, health care, aeronautics, electronics, and education [11].

CSF Analysis Uses and Advantages

This chapter will addresses the uses and advantages of the CSF approach in identifying corporate information needs and, subsequently, in developing an information systems strategies.

A. Understanding Current Situation Before formulating any information system strategies, top management needs to have a clear understanding on current organization’s situation. CSF analysis can be effectively used as a tool to properly identify, analyze and understand current environment and information needs in any business unit of an organization to support future detailed analysis and planning activities. It is critical for a manager to properly identify what are initial plan, changes and requirement needed to achieve business goals and objective.
B. Accessing Current IT/IS Strategies Accessing current IT/IS strategies are also crucial to retrieve a broad overview of the business perspectives such as company objectives and goals, long term mission, vision for the future, strategy, drivers for change, proposed change initiatives, structure, values, culture, management styles, performance monitoring and any other short-term critical demands [6]. Therefore, both minor and major factor in any business activities which may affect and contribute to the overall organization’s performance could be easily identified.
C. Strategic Opportunity and Potential Through a complete analysis of business demand, market competition, productivity, threats and others business strength and weaknesses defined in previous assessment of understanding current situation, a gap between the opportunities created by IT and effective technology utilization will be identified. Thus, the gap must be closed in order to determine the new strategic
opportunity for the organization [11].
D. Precise Information Needs Disclosure According to a research study done by Bergeron and Begin [12], their findings included that the successive use of different data collection methods (individual interviews, questionnaire, and group meeting) in CSF analysis has helped the company to overcome the difficulty of bringing respondents to disclose their precise information needs.Moreover, during CSF analysis session, it is a good catalyst in unearthing their own individual information needs [6]. This information is absolutely priceless and vital in
determining and classifying the true strength and weakness of the company.
E. Establishing Effective Processes By revealing and understanding the precise and true information needs and strategic potential, the alignment of IT in any business process can be easily identified and thus effective processes could be established. The effective processes should be in a proper structure as well as flexible to support future policy and objective.
F. Analysis of Competitiveness With a constant environmental analysis within CSF approach; rivalry, threat and competitive forces can be identified and analyzed in a broader industry structure approaches. The advantage of this approach relates to the specific nature of the firm; that is the thorough understanding of the competitive environment and each firm’s competitive posture allows a firm using this approach the facility to readily incorporate this information into the strategy development process [10].
G. Prioritizing Potential Investments Through a clear understanding on existing and current business environment and information needs, CSF method can play an important role in prioritizing potential investments [6]. Top level management may utilize the information gathered to optimize and focus on a specific IT/IS strategy to the most critical aspects of the business that need action taken to improve their performance and increase any potential future investment.

Summary

The success matrix of any IT/IS implementation is critical for every business and industry. It have been a major concern for all managers and researchers to identify what are the contributing factor for both success and failure in any IT/IS projects. To identify the contributing factors, a CSF method have been introduced by Rockart and been noted as one of the most recognized strategic and planning tools for top level management to effectively identify whatare the critical success factor in their business environment.

Through a numerous study [3,4,5,13,14,15,16] done, CSF method have been proven to be one of the most favored and effective approach in defining information system strategies by the managers and other business executives.

References

[1] Von Urff Kaufeld, N., V. Chari, and D. Freeme, Critical Success Factors for Effective IT Leadership. The Electronic Journal Information Systems Evaluation, 2009. 12(1): p. 119 – 128.Evaluation, 2009. 12(1): p. 119 – 128.
[2] McKeen, J.D and Smith, H.A (2003) Making IT happen – Critical Issues in IT Management, West Sussex: John Wiley & Sons
[3] Xiang-Hua Lu, Li-Hua Huang, and Michael S. H. Heng. 2006. Critical success factors of inter-organizational information systems-A case study of Cisco and Xiao Tong in China. Inf. Manage. 43, 3 (April 2006), 395-408.
[4] Agourram, H., The Quest For Information Systems Success In Saudi Arabia. A Case Study. Journal of Global Management Research, 2009. 5(1): p. 51-58.
[5] N. McBride, The rise and fall of an executive information system: a case study, Information Systems Journal 7, 1997. 277–288.
[6] Ward, J., & Peppard, J. (2007). Strategic planning for information systems (Vol. 28). Wiley.
[7] J.K. Leidecker and A.V. Bruno. CSF analysis and the strategy development process, in Strategic planning and management handbook B. Taylor (editor), Van Nostrand Rheinhold. 1987. pp.333-35 I.
[8] J. F. Rockart, ‘Chief executives define their own information needs’, Harvard Business Review, March–April 1979, 81–92.
[9] Boynton. A. C, and Zmud, R. W. An assessment of critical success factors. Sloan Management Review (Summer 1984). 17-27.
[10] J.K. Leidecker and A.V. Bruno, “Identifying and Using Critical Success Factors,” 1984 Long Range Planning, Vol. 17, No. 1, pp. 23 to 32.
[11] T Yeo, K. (1990). Systemic CSF analysis for strategic IT planning. International Journal of Project Management, 8(4), 205 212.
[12] Bergeron, F., & Begin, C. (1989). The use of critical success factors in evaluation of information systems: a case study. Journal of Management Information Systems, 111-124.
[13] Srinivasan, R.; Ravi, E. T V, “Issues in the planning of strategic information systems: an exploratory study,” Management of Engineering and Technology, 1999. Technology and Innovation Management. PICMET ’99. Portland International Conference on , vol.1, no., pp.456 vol.1,, 1999
[14] Liang Zhang; Lee, M.K.O.; Zhe Zhang; Banerjee, P., “Critical success factors of enterprise resource planning systems implementation success in China,” System Sciences, 2003. Proceedings of the 36th Annual Hawaii International Conference on , vol., no., pp.10 pp.,, 6-9 Jan. 2003
[15] Daojin Fan, “Analysis of critical success factors in IT project management,” Industrial and Information Systems (IIS), 2010 2nd International Conference on , vol.2, no., pp.487,490, 10-11 July 2010
[16] PoPo Poon and Christian Wagner. 2001. Critical success factors revisited: success and failure cases of information systems for senior executives. Decis. Support Syst. 30, 4 (March 2001), 393-418.

Juan is a Design & Tech Blogger with strong interest in digital art, human computer interaction, enterprise system and system automation.

Category Tips // Tags , ,