Critical success factors define the areas where an organisation must perform well to achieve its objectives. They are broad success areas, such as improving customer service, reducing operating costs, increasing market share, or improving product quality. Key performance indicators are measurable values used to monitor whether those success factors are being achieved. Therefore, KPIs track progress against CSFs. CSFs are not sub-targets within KPIs; the relationship works the other way around. KPIs also are not measured by CSFs because CSFs are qualitative success areas, while KPIs are measurable indicators. For example, if a CSF is “provide excellent customer service,” relevant KPIs might include complaint numbers, customer satisfaction scores, repeat customer percentage, or response times. This makes option C the correct relationship.
