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Critical success factors are elements that are vital for a strategy to be successful. A critical success factor drives the strategy forward, it makes or breaks the success of the strategy, (hence “critical”). Strategists should ask themselves 'Why would customers choose us?'. The answer is typically a critical success factor.
KPIs, on the other hand, are measures that quantify management objectives, along with a target or threshold, and enable the measurement of strategic performance.
An example:
· KPI = Number of new customers. (Measurable, quantifiable) + Threshold =10 per week [KPI reached if10 or more new customers, failed if <10]
CSF = Installation of a call center for providing superior customer service (and indirectly, influencing acquiring new customers through customer satisfaction).
There is no relation between the critical success factors and key performance indicators.
The critical success factors are the vital activities (among all other project activities) which are needed to achieve the project goals, which are measured by the key performance indicators.
On other words, the key performance indicators are the tool used to tell if the project goals have been achieved or no.
It is like the difference between the ‘’means’’ and ‘’ends’’
