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Here I write the second post from IADIC assignment posting series. This time I will post my C2027 Information Management Module’s Assignment that I take during Term 3 2008 in Informatics Computer School Singapore.

C2027 Information Management is a module that emphasizes more on how to manage IT department and IT projects when you become an IT manager in a company. It’s quite different from the other modules I get in IADIC course but on the other hand it is also fun to learn things about how and what you should do if you are a manager in a IT Department

This Assignment is quite unique compared to the other IADIC assignment because it doesnt have any scenario. But it just asks us to do a research and write about CSF (Critical Success Factor) and Enterprise Analysis. We need to write about five main points.
those points are:

The points that we need to write about CSF and Enterprose Analysis are:

•    Provide a introduction to CSFs and explain the importance of critical success factors.
•    Discuss about the main benifits organisations can gain by having its own CSFs.
•    Compare CSFs with enterprise analysis.
•    Discuss the advantages of critical success factors over enterprise analysis.
•    Discuss the disadvantages of critical success factors over enterprise analysis.

and here are my answers:

In this chapter, I will introduce about what is Critical Success Factor (CSF) and try to explain about the importance of Critical Success Factor for an organisation.

The idea of CSF first appeared on Harvard Business Review in the year 1961 by RH Daniel. The main idea of Critical Success factor is simple. It is that each organization has some factors that critical for the success of the organization, if the organization’s objectives that are associated with these factors is not achieved, most likely the organization will fail. (Mike Morrison, 2008)

However, it was not so popular until a decade later a man called John F. Rockart from MIT’s Sloan School of Management build on Daniel’s idea and popularizes the idea of Critical Success Factor. The definition of CSF from Rockart’s perspective is that CSF is a limited number of areas from an organization that will ensure the organization will be competitive and success as long as these areas is satisfied. On the other hand, if the organization fails to satisfy these areas, then the organization will not get its desired performance. In conclusion, Rockart says that CSFs are the areas that need a careful and continuous attention from the organization’s management. (Mindtools.com, 2008)

After looking at the history, we can define CSFs as factors that are related strongly on the organizations missions and main goals. Critical Success Factors only focus on the most important areas from an organization. It shows what goals the organization wants to achieve and what factors that the particular organization needs to satisfy in order to achieve its goals.

CSFs is very important for the success of an organization, it also helps to keep the organization focused on what is important and helps everyone in the organization to move in the same direction together, but where do we get the Critical Success Factors for an organization? We get the Critical Success Factor of an organization as a result of some personal interviews with top managers in the organization. We get these managers about what area of activity that is important in order to achieve the organization’s goals. After we get the personal Critical Success Factors from these managers, we will proceed to analyze and then aggregate these individual Critical Success Factors in order to make an agreement on what are the critical success factors for the whole organization.

The number of Critical Success Factors in an organization should be limited between three to five factors only, because a small number of CSFs will make it always manageable and easy to be satisfied by the entire organization. Mike Morrison (Rapidbi.com, 2008) suggest that there are five different areas where we can use to derive the Critical Success Factors of an organization. These sources are:

1.      The industry

2.      The competitive strategy or industry position

3.      Environmental factors

4.      Temporal factors

5.      Managerial position

1.      The industry

The type of the organization’s industry will affect on the factors that is important for the organization to success in a particular industry.

2.      The competitive strategy or industry position

The position of an organization in the market and also its industry’s market target as well as the competition environment will affect the organizations CSF.

3.      Environmental factors

These things are the external factor that cannot be controlled by the organization but need to be considered, such as political change, change of government rules, etc.

4.      Temporal factors

This factor is based on a temporary organization’s needs. If there is any difficulties or barrier that holds the organization and need to be solved immediately, then it will define the organization’s CSF.

5.      Managerial position

The managerial position is also an important source of CSF if the CSF is considered from individual manager’s point of view. For example, manager in public relation department will have a customer relationship as one of his/her CSF.

Mainly, there are two benefits of an organization or company to have its own CSFs. We will discuss these two benefits and an example.

First, the benefit of a company having its own CSFs is the CSFs can help the company to focus only on the things that are important to the company. In another words, the company know what is important, what is less important, and what is not important for it. When a company can focus only on the important things, it can make a priority on what things need to be done first. This also helps the company to save its effort from doing unnecessary things.

Second, the benefit of a company with its own CSFs is that the company’s business will stay in track. Each company has its own business mission and goals, the CSFs will act as a guideline for the company’s operation so it will achieve its desired goals.

To be able to understand about what are the benefits of an organization having its own Critical Success Factor, let us consider the example of Calico Computer Consulting (bplans.com, 2008).

Calico Computer Consulting is a newly established company that aims to provide assistance about computer matters. Its objectives are:

1.      Provide a fast and reliable technical assistance to the local business and home computer users

2.      Establish the company quickly with minimum of debt and make it profitable in long term.

3.      Provide satisfying service to get loyal customer for stable income.

4.      Generate sufficient profit and grow the business in a manageable rate.

After looking at the objectives of Calico Computer Consulting, now we will need to identify what are the critical factors that will need to be satisfied to make Calico Computer Consulting become a successful company according to its objectives.

The Critical Success Factors of Calico Computer Consulting are:

1. Get the Company name out there

This CSF comes from the temporal source due to the fact that this company is a newly established company and not many people know about it. Secondly, this factor also helps the company to achieve its second objective.

2. Quick response time to customer

The need to provide a quick response to the customer comes from the competitiveness source, it complies with the first objective.

3. High Solution quality

This factor comes from the industry source. The business of computer consulting requires the company to deliver an accurate solution for any computer problem.

4. Make and maintain a good customer relationship

This factor is derived from the company’s goal to have loyal customers in order to make a stable and steady income.

From the sample above, we can see that the CSF of the company helps it to achieve its business goals by identifying what are the important factors that it need to satisfy in order to be successful. Now this company have a focus on what is important for them and have a guideline to keep their business in the right track.

Enterprise Analysis

In this chapter, we will try to compare two methods of establishing organization information requirement. These two methods are Enterprise Analysis and Critical Success Factor. I will try to explain these methods individually so we can see the difference between them.

III. a. Enterprise Analysis

Enterprise Analysis also known as business system planning is a kind of method to establish an organization’s information requirement. According to this method, an organization’s information requirement can be defined by looking at the entire organization in the areas of its function, data elements, process, and organizational unit. This method will help the organization to find out what are the key or main entities and attributes from an organization’s data.

The method to do an Enterprise Analysis is to gather a large amount of sample from many managers. We will then ask these managers many questions like where the source of their information is, how they make their decision, what data that they need, and what are their objectives. After we get these data samples, we will try to aggregate this big data into subunits, processes, data matrices, and functions. The data element organized to some logical groups of application. Logical application groups are data elements that support some related sets of some organizational processes.

III. b. Critical Success Factor

Critical Success Factor also known as Strategic Analysis is another kind of method to establish an organization’s information requirement. As described in chapter 1, CSFs is critical factors that is related to an organization’s strategic goals and mission, which will make the organization successful when all of the Critical Success Factors is satisfied.

If we do an Enterprise Analysis by collecting a big amount of sample data from many managers, we get an organization’s Critical Success Factor in a slightly different way. The process of generating Critical Success Factors doesn’t come from a huge sampling process, but it comes from personal interviews to some top managers in the particular organization. These managers are asked to think about the important area in the organization, that will produce some individual CSFs. Then, these Individual CSFs will be analysed and aggregated to produce the organization’s Critical Success Factors.

Now, as we have seen the definition and explanation of CSF and Enterprise Analysis individually, we can start to compare these two methods of establishing organization information requirement.

The first thing that we can compare is the way to perform Enterprise Analysis and Critical Success Factors. As I have explained in the definition of Critical Success Factor, CSF is made by gathering some manager’s individual CSF using interview, while Enterprise Analysis use sampling to gather a large amount of data from many top managers about how they get and use the information in their organization. The second difference is Enterprise Analysis need a lot of effort to analyse the huge sample data compared to small amount of individual CSFs gathered in CSF method.

These two methods do have a similarity. The similarity of these two method is that the result of both CSF and Enterprise Analysis is biased to the top management and not reach the entire level in the organization because these method only ask and get the data from the top managers only.

Enterprise Analysis

We have compared the two methods to establish an organization’s information requirement, CSF and Enterprise Analysis, in the previous chapter. Every organization can use any one of these two methods in order to find out and determine their information requirement. However, why organizations prefer to choose a method to another method? How these two methods give advantages to the organization? Moreover, are there any disadvantages of using one method over the other method? I will explain these issues in chapter IV and V in this assignment. In this chapter, we going to talk about the advantages that organization get when using Critical Success Factor rather than Enterprise Analysis.

When an organization decided to use CSF to determine their information requirement, the advantages that they will get are:

a.       Simple procedure and small data analysis effort

If the organization wants to determine their CSF, then the organization will just need to interview their managers and get the their individual CSFs, which may be just three to five factors per manager, analyse and aggregate these individual CSFs to get the organization’s CSF. The process is simple and there is only small data to analyze. The story will be different if they use Enterprise Analysis, as it will give the organization a huge amount of sample data from the managers to analyze, it will need a lot more effort.

b.      The organization know what factors are important for the business

Using the organization’s CSFs, now the organization will know what the factors that is important, need careful and extra attention in order to make it a successful organization. On the other hand, the organization will just get information about how they should process the information that they have without knowing what the information that is important if they choose the Enterprise Analysis.

c.       The CSF can deal with changing environment and needs

CSFs comes from manager’s thought about the organization’s current condition and what the organization need in meantime, so it can deal with the most actual organization’s need. For example, organization ABC is a newly established organization. The manager of organization ABC will think that one of the organization’s CSF should be to quickly build and grow the organization and introduce it to the market. After some years, maybe this CSF is no longer relevant and can be changed to suit the organization’s need. The organization will not get this advantage if they use the Enterprise Analysis because in Enterprise Analysis they analyze how the organization use its data and information in the past, not what information that the organization need now.

d.      The CSF can be used to develop a custom system

This is another advantage for using CSF method. The CSF method is unique to one organization. Therefore, when we use the organization’s CSF to develop a system like Decision Support System or Executive Support System, the result will be a system that is more customized and unique to the organization since each organization can have different CSF.

Besides the advantages, the disadvantages that an organization will suffer when using  CSF over Enterprise Analysis are:

a.       Cannot see a complete view about how the organization use data

When an organization uses CSF to determine their information requirement, they will miss out the analysis about what they do about their existing data and information. On the other hand, if the organization uses Enterprise Analysis, the sampling data from Enterprise Analysis will tell the organization about how they use their existing data and information. Enterprise Analysis also let them know where there is a gap of information within the organization. For example, an organization may always get some data or information during their daily business information that is never processed and used to be a useful information for the company. This kind of potentially useful but unprocessed data or information will be never discovered by using Critical Success Factor Method but will be detected in Enterprise Analysis because the managers is asked about all the information and data that they get during the sample data gathering process in Enterprise Analysis.

b.      Efficiency of information processing not guaranteed

This disadvantage is actually an implication from the previously mentioned disadvantage of using CSF method. Because the organization cannot get the analysis data about how they process the existing data and information that they have, they also do not know if actually they can improve the efficiency of their data processing. In Enterprise Analysis, the analysis result will help the organization to develop a common understanding about how they use the organization data and helps people in the organization to process the data and information that they have more efficiently.

c.       Cannot develop a system to start a massive change

As mentioned in the previous chapter, CSF is suitable to be used to develop an Executive Support System or a Decision Support System. These kinds of systems will support the management team in the organization to make decisions. The problem come when the company or organization need to make a massive change in the way the organization do its daily business. These two kinds of system won’t be able to support this need. However, if the organization choose to use Enterprise Analysis, they will have more complete information about how the organization should process its information, what are the key entities, and attributes in the organization. These kind of information is suitable for developing a new system for the company to do a massive change in the way the company/organization works.

d.      Misunderstandings of CSF may happen

In the process of interview, aggregation, and analysis of individual manager’s CSFs into the organization’s CSF, many misunderstanding may happen. First, there are no black and white rules on how to transform and aggregate individual CSFs into organization’s CSFs. So there is always a room for mistake in this process.  Second, the interviewer and interviewer may become confused in distinguishing individual and organization’s CSF.

bplans.com, 2008, “Calico Computer Consulting“, Retrieved October 21, 2008, from http://www.bplans.com/Sample_Business_Plans/Computer_Consulting_Repair_and_Reseller_Business_Plans/Computer_Consulting_Business_Plan/executive_summary_fc.cfm

Mike, Morrison, 2008, Rapidbi.com, “Critical Success Factors – Determine the CSFs for your company“, Retrieved October 20, 2008, from http://www.rapidbi.com/created/criticalsuccessfactors.html

Mindtools.com, 2008, “Critical Success Factors”, Retrieved October 20, 2008, from http://www.mindtools.com/pages/article/newLDR_80.htm

Wps.prenhall.com, 2008, “Establishing Organization Information Requirement“, Retrieved October 22, 2008, from http://wps.prenhall.com/wps/media/objects/5528/5661380/_LearningTracks/laudon_ch11_lt2.pdf

Do you have any comment on this? maybe you have something to ask me or want to discuss with me about this?Or maybe you are IDIC student and taking this module also?
Feel free to use the comment box below (click here if you cannot see the comment box).

Coming next, I will post another IADIC assignment, C2028 Database Management System

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