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CS507 - Information Systems - Lecture Handout 28

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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 –
  • Sustainability
  • Corporate social responsibility
  • Corporate Governance

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.

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.

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.

Centralized vs. Distributed Processing

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 performance.

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 service.

Web based Environment

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 destination.

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.