Your SlideShare is downloading. ×
0
Balancedscorecardpresentation
Balancedscorecardpresentation
Balancedscorecardpresentation
Balancedscorecardpresentation
Balancedscorecardpresentation
Balancedscorecardpresentation
Balancedscorecardpresentation
Balancedscorecardpresentation
Balancedscorecardpresentation
Balancedscorecardpresentation
Balancedscorecardpresentation
Balancedscorecardpresentation
Balancedscorecardpresentation
Balancedscorecardpresentation
Balancedscorecardpresentation
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×
Saving this for later? Get the SlideShare app to save on your phone or tablet. Read anywhere, anytime – even offline.
Text the download link to your phone
Standard text messaging rates apply

Balancedscorecardpresentation

2,571

Published on

Published in: Business, Technology
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
2,571
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
102
Comments
0
Likes
1
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide

Transcript

  • 1. The Balanced Scorecard Approach
  • 2. What is a Balanced Scorecard? The Balanced Scorecard is a strategic planning and management system used to align business activities to the vision and strategy of the organization by monitoring performance against strategic goals.
  • 3. Balanced Scorecard Concept    Was first published in 1992 by Kaplan and Norton, a book followed in 1996. Traditional performance measurement that only focus on external accounting data are obsolete. The approach is to provide 'balance' to the financial perspective.
  • 4. Why Use a Balanced Scorecard?       Improve organizational performance by measuring what matters Increase focus on strategy and results Align organization strategy with workers on a day-to-day basis Focus on the drivers key to future performance Improve communication of the organization’s Vision and Strategy Prioritize Projects / Initiatives
  • 5. 4 Original Business Perspectives  The Balanced Scorecard model suggests that we view the organization from 4 perspectives.  Then Develop metrics, collect data and analyze it relative to each of these perspectives Adapted from The Balanced Scorecard by Kaplan & Norton
  • 6. 4 Business Perspectives Questions  Financial   Internal Business Process   To satisfy our stakeholders, what must be our levels of productivity, efficiency, and quality? Learning and Growth   What must we do to create sustainable economic value? How does our employee performance management system, including feedback to employees, support high performance? Customer  What do our customers require from us and how are we doing according to those requirements?
  • 7. Balanced Scorecard Measurements
  • 8. Key Implementation Success Factors       Obtaining executive sponsorship and commitment Involving a broad base of leaders, managers and employees in scorecard development Choose the right Scorecard Champion Beginning interactive (two-way) communication first Viewing the scorecard as a long-term journey rather than a short-term project Getting outside help if needed
  • 9. Balanced Scorecard Example STRATEGY MAP STRATEGY MAP BALANCED SCORECARD BALANCED SCORECARD PROCESS: MANUFACTURING EXCELLENCE PROCESS: MANUFACTURING EXCELLENCE THEME: ROCE > xx%, VOLUME = xx,xxx units THEME: ROCE > xx%, VOLUME = xx,xxx units FINANCIAL PERSPECTIVE OFFER PRODUCTS & SERVCIES OFFER PRODUCTS & SERVCIES THAT ARE CONSISTENT, TIMELY THAT ARE CONSISTENT, TIMELY and LOW-COST and LOW-COST World World Class Class Enhance Enhance Brand Brand INTERNAL PERSPECTIVE ENSURE OPERATIONAL EXCELLENCE WITH ENSURE OPERATIONAL EXCELLENCE WITH INNOVATION AS WELL BEING SOCIALLY INNOVATION AS WELL BEING SOCIALLY RESPONSIBLE RESPONSIBLE Operational Operational Excellence Excellence Alliances with Alliances with SBUs SBUs Process Process Innovation Innovation Socially Socially Responsible Responsible LEARNING & GROWTH PERSPECTIVE STRATEGIC JOB & SYSTEMS STRATEGIC JOB & SYSTEMS Skills Skills TARGET TARGET INITIATIVE INITIATIVE Info. System Info. System •Operating Cost & Efficiency •Operating Cost & Efficiency • Cost/Unit, Efficiency • Cost/Unit, Efficiency •Capacity Utilization •Capacity Utilization •% Utilization •% Utilization • Trial Prod. • Trial Prod. • Spare Parts Prod • Spare Parts Prod • Weekly/Monthly • Weekly/Monthly Monitoring Monitoring •Capability Utilization •Capability Utilization •Brand // Image •Brand Image •Warranty Cost •Warranty Cost • Man-hour per Unit • Man-hour per Unit • Weekly Monitoring • Weekly Monitoring •World-Class Quality •World-Class Quality Standards Standards • Defect per Unit • Defect per Unit • Daily Monitoring • Daily Monitoring •World-Class Delivery Timing •World-Class Delivery Timing • Sales Delivery • Sales Delivery • Daily Monitoring • Daily Monitoring •Knowledgeable & Skilled •Knowledgeable & Skilled Partner Partner • Direct Pass Rate • Direct Pass Rate • Daily Monitoring • Daily Monitoring •High Customer Satisfaction •High Customer Satisfaction • Market Feedback • Market Feedback • Weekly Monitoring • Weekly Monitoring •Reinforce Brand Image •Reinforce Brand Image • Sales Volume • Sales Volume • Monthly Monitoring • Monthly Monitoring Prod. & Sales Mtg. Prod. & Sales Mtg. • Cycle Time • Cycle Time • Hourly Monitoring • Hourly Monitoring • Meet Daily Plan • Meet Daily Plan • WIP • WIP • KAIZEN • KAIZEN • ICC • ICC • Daily Monitoring • Daily Monitoring • Daily Monitoring • Daily Monitoring • Monthly follow-up • Monthly follow-up • Specific Programmed • Specific Programmed • Timely Introduction • Timely Introduction • Weekly Follow-up • Weekly Follow-up • Industrial Accident • Industrial Accident • Commuting Accident • Commuting Accident • Toxic Waste Disposal • Toxic Waste Disposal • ISO 9002 • ISO 9002 • Cross Audits • Cross Audits • Defensive Driving • Defensive Driving • Facility Readiness • Facility Readiness • Certification • Certification BUDGET BUDGET • Monthly Monitoring • Monthly Monitoring •Productivity •Productivity Grow Grow Revenue Revenue CUSTOMER PERSPECTIVE Low Low Cost Cost Customer Customer Satisfaction Satisfaction MEASUREMENT MEASUREMENT •Low Cost Manufacturing •Low Cost Manufacturing Long-Term Shareholder Long-Term Shareholder Value ROCE > xx% Value ROCE > xx% Improve Improve Productivity Productivity OBJECTIVES OBJECTIVES ACTION PLAN ACTION PLAN •Delivery •Delivery •Continuous Improvement •Continuous Improvement •NPI •NPI •Safety & Health •Safety & Health •Environment •Environment •Develop the Necessary Skills •Develop the Necessary Skills • R&D & Development • R&D & Development •Information Systems •Information Systems Availability Availability • ALC, Procurement, • ALC, Procurement, Financial Financial •Strategic Awareness •Strategic Awareness • Alignment • Alignment • Monthly Monitoring • Monthly Monitoring tt • Weekly/Monthly • Weekly/Monthly Monitoring Monitoring • Training and Skill • Training and Skill Build-up Build-up • Set-up, Test and • Set-up, Test and Validation Validation • Communication • Communication Programmed Programmed OPEX RM XX M CAPEX RM xx M
  • 10. Balanced Scorecard Strategy Map
  • 11. Department Level Scorecard Example
  • 12. Scorecard Potential Pitfalls & Criticisms
  • 13. Scorecard Potential Pitfalls & Criticisms     Lack of a well Defined Strategy  The balanced scorecard relies on a well defined strategy and understanding of linkages between strategic objections and metrics. Without this foundation the implementation could fail. Too much focus on the lagging measures  Focusing on only the lagging measures may cause a lack of priority or opportunity for the leading measures. Use of Generic Metrics  Don’t just copy metrics from another firm. Identify the measures that apply to your strategy and competitive position . Self-serving managers  Managers whose goal is to achieve a desired result in order to obtain a bonus or other self reward.
  • 14. Balanced Scorecard Benefit Re-Cap      Helps align key performance measures with strategy at all levels of an organization The methodology facilitates communication and understanding of business goals and strategies at all levels of an organization Strategic initiatives that follow "best practices" methodologies that cascade through the entire organization Transforms an organization’s mission statement and strategic plan from a passive document into the "marching orders" for the organization on a daily basis. It enables executives to truly execute their strategies by identifying what should be done and measured. To date, some form of a Balanced Scorecard is used by nearly 60% of Fortune 500 companies
  • 15. Thank You for Your Time Questions?

×