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Balanced Scoredcard

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It is defined by Robert Kaplan and David Norton as a powerful strategic measurement system, communication tools and innovative feedback & learning tool that “… translates strategy into measures that uniquely communicate your vision to the organization”

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Balanced Scoredcard

  1. 1. BALANCED SCORECARD <ul><li>INTRODUCTION </li></ul><ul><li>BENEFIT </li></ul><ul><li>EXAMPLE OF BUILDING BSC </li></ul><ul><li>IMPLEMENTATION PROBLEMS AND COPING STRATEGIES </li></ul><ul><li>A STEP-BY-STEP APPROACH TO BUILDING BSC </li></ul>
  2. 2. I. INTRODUCTION <ul><li>How to manage the company or the business </li></ul><ul><li>Identify and use the key strategic measures </li></ul><ul><li>Identify actions and KPI´s linked to the strategic measures. </li></ul><ul><li>With the Higher competition of our business </li></ul><ul><li>Link all together to measure how well of our performance </li></ul><ul><li>Relate to the performance measurement </li></ul><ul><li>Review the performance with the strategic objectives </li></ul>
  3. 3. Ia) Performance measurement <ul><li>The role of performance measurement is to </li></ul><ul><li>Provide the feedback loop between desired and actual changes to business processes </li></ul><ul><li>Hold managers accountable for their actions </li></ul><ul><li>Provide signals, both financial and non-financial, that stated strategic objectives are being reached. </li></ul>
  4. 4. Ib) What is Balance Scorecard(BSC) <ul><li>It is defined by Robert Kaplan and David Norton as a powerful strategic measurement system, communication tools and innovative feedback & learning tool that “… translates strategy into measures that uniquely communicate your vision to the organization ” </li></ul>
  5. 5. Ic) Strategic Measurement System What must we excel at ? OUTCOMES DRIVERS Financial Perspective GOALS MEASURES Customer Perspective GOALS MEASURES Innovation & Learning GOALS MEASURES Internal Business GOALS MEASURES Can we continues to improve and create value ? How do we look to shareholders ? How do customers see us ?
  6. 6. Ic) Strategic Measurement System Financial ROCE Customer Customer Satisfaction Internal Business Process On-time delivery Process Quality Process Quality Employee Skills Learning and Growth
  7. 7. Id) Communication tool <ul><li>Communicate the multiple, linked objectives </li></ul><ul><li>See the logic between the strategies, objectives and measures </li></ul><ul><li>Share throughout the company </li></ul><ul><li>The ownership of goals or objectives of each staff </li></ul>
  8. 8. Ie) Innovative Feedback and Learning Tool Review Measures / Strategies/ Objectives Update BSC Due to underachieve-ment of drivers Remedy Action Outcomes not met Manage Outcome Amend / formulates new measures / strategies / objectives Inconsistent linkage between outcomes and drivers NO YES
  9. 9. II) How BSC will BENEFIT US <ul><li>Focus on the organization as a whole, not individual plant targets only </li></ul><ul><li>Align organization to company vision and mission </li></ul><ul><li>Adapt strategically to the changing environment </li></ul><ul><li>Facilitate Decision making with the whole view of the organization </li></ul><ul><li>The performance of the objectives can be properly traced. </li></ul>
  10. 10. III) EXMAPLE of Building BSC <ul><li>Building a BSC is basically a process of translating an organization's vision into strategic objectives , concrete performance measures , and specific targets . </li></ul>
  11. 11. IIIa. Example(MSM)
  12. 12. IIIb. Define departmental action plan 1)Prepare project proposal 2) Measure “IS” Process 3)Estimate project goals Order process reduction program 1. Reduce order process leading time by 12 hr to 24 hr 4th Qtr Action 3rd Qtr Action 2nd Qtr Action 1 st Qtr Action KPI & Targets
  13. 13. IV) IMPLEMENTATION PROBLEMS & COPING STRATEGIES Automate date collection Efficient data collection mechanism vi. Link BSC to incentive Reward and recognition v. Communication iv. Understanding of what is involved iii. Staff ownership ii. Involve staff in developing the BSC. Show BSC performance regularly in common areas. Effective Deployment process i. Copying strategies Implementation problems
  14. 14. IV) More COPING STRATEGIES <ul><li>Training for all managers </li></ul><ul><li>Senior mgr play a role model </li></ul><ul><li>Involvement of the BU managers </li></ul><ul><li>Team work for implementation </li></ul><ul><li>Share with lower level managers on the critical issued for BSC implementation </li></ul><ul><li>Involvement of the lower level managers in the review of the progress of the BSC implementation </li></ul>
  15. 15. V) STEP BY STEP APPROACH <ul><li>Step 1: Reaching an Agreement on Core Processes </li></ul><ul><li>Step 2: Decide on the Generic Form of Scorecard </li></ul><ul><li>Step 3: Define & Link Objectives in Outcome Perspectives </li></ul><ul><li>Step 4: Unpack Each Core Process </li></ul><ul><li>Step 5: Link Objectives in Outcome Perspectives to Hot Spots in Core Processes & Define Process Objectives </li></ul><ul><li>Step 6: Link Objectives in other Driver perspectives to Process Objectives </li></ul><ul><li>Step 7: Add Measures that Support Objectives </li></ul>

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