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Tuesday

Critical success factors vs benefits

One thing I have noticed at the organization I am currently consulting at (see previous post), is that a lot of stakeholders use Critical Success Factors (CSF) or Key Performance Indicators (KPI's) as viable alternative to benefits. I don't agree with this.

Here is the difference as I see it:

A benefit is used to justify why an investment makes sense. Eg implement this new system as it will reduce support costs by $X through retirement of legacy systems and reduction in FTE's.

A CSF or KPI is for measuring the performance of an initiative (project, change etc) once it has been justified via building the business case where you state the financial/non-financial benefits and determine the NPV, ROI etc. A CSF/KPI is used to measure how the initiative is tracking in terms of meeting the stated benefits and objectives. Off course it is based on the benefits to be realized - but should not take their place. When a benefit is clearly measurable, then the CSF/KPI will be very similar to the benefit target. A CSF/KPI is very useful for intangible benefits, where it can be used as a good proxy to provide a measure for determining if the benefit has been achieved (eg Train 1000 users by MM/YY date).

Any thoughts?

1 comment:

Anonymous said...

I agree. However it is much easier to get buy in for CSF's then to spend time working out and quantifying benefits.