1. 1
MSC/INTERNATIONAL DEVELOPMENT
20014/15
STUDENT NUMBER: 18323
UNIT NUMBER: POLIM 2048
UNIT TITLE: International Development
Organizations
UNIT TUTOR: Gastón Fornés
ESSAY QUESTION NUMBER: N.A.
ESSAY TITLE: Profamilia and the Balanced
Scorecard: Planning for Survival.
WORD COUNT: 1497

2. 2
PROFAMILIA AND THE BSC: PLANNING
FOR SURVIVAL
SITUATION:
The “Asociación Probienestar de la Familia Colombiana”, called also “Profamilia”, is a
non-profit organization specialized in providing sexual and reproductive health
services (SRHS) to the poorest segment of Colombia’s population. Administered as an
enterprise with a social orientation, Profamilia is the biggest national organisation
providing these services. With a proven successful track record, it was capable of
attracting generous international donations and to close distribution agreements with
global pharmaceutical companies. The key factor for its expansion lie in the distinctive
characteristic of its social objective: provide services at a lower cost than market
value without compromising quality.
At the beginning of the 1990s, two events threatened Profamilia’s survival: USAID, its
principal international donor, began to withdraw its support, while the “Law 100”
modified the way in which health services were offered, provided and financed (see
Exhibit 1). To respond to an increasingly competitive environment, Profamilia had to
alter its financial sustainability from donation-based to sales-based. However, in June
of 2004 senior management perceived that the efforts to secure sustainability without
compromising the social mission were insufficient. Therefore, a strategic plan is
required.
PROBLEMS:
The problems that Profamilia have to face were described as “natural consequences of
the change of the sector1
”. The health care system liberalisation, together with the
vertical integration of health insurance and care provision, reduced significantly its
market share of SRHS and family planning services, which were previously contracted
out in a condition of quasi-monopoly. This affected also the sales of contraceptive
products: the quantity of contraceptive pills sold plummeted in the mid-1990s, while
the condoms declined less dramatically. Moreover, the rapid fall of USAID donations
1 Lobo Ivan D, Gutierrez, Roberto, and Sanabria, Raul. 2006. “Profamilia: Planning For Survive”. Social
Enterprise Knowledge Network, November 30, p.11.

3. 3
deepened the organisation’s financial problems.
As a value based organisation, Profamilia do not want to risk damaging its social
commitment. However, for its own survival, it has to decide which direction to take
and where to specialize.
TOOLS AND TECHNIQUES
Developing a balanced scorecard (BSc) can be a useful operation to help Profamilia
defining its objectives while moving towards its uncertain future position. The BSc is a
methodological tool based upon the cause-and-effect relationship of financial and
operational measures derived from the organisation’s decisions. It offers a full and
straightforward picture of the business while maintaining focus on its bottom-line
goal2
. Identifying and measuring the specific value drivers that underpin performance,
the BSc converts vision and strategy into goals, indicators and targets. The aim is to
have each area equally aligned with the overall strategic objective and organisation’s
mission3
.
Adopting the balanced scorecard paradigm presents a number of advantages for
Profamilia. Firstly, it enables senior management to understand that decisions to
improve one area may have negative impacts in another. Secondly, it facilitates
communication and understanding of goals and strategies at all levels of the
organisation, structuring personal objectives with the organisational ones4
.
ANALYSIS
As stated above, the main Profamilia challenge derives from the increasingly
competitive environment. In a five years period, the NGO saw its income reduce by
26% (see Exhibit 2). Furthermore, the health sector reform and the contraction of aid
marked a drastic change in its financial structure. The organisation’s income shifted to
70% dependence on sales of products and SRHS, with a cross subsidy between these
services and other financially unviable but socially necessary programs. However,
even if the distribution of contraceptive products (in particular contraceptive pills) has
2 Kaplan, S. Robert and Norton, P. David. 1992. “The Balanced Scorecard – Measures that Drive
Performance”, Harvard Business Review, January – February, Harvard Business School Publishing, Boston,
MA, US.
3 Contrada, Michael. 1999. “Using the Balanced Scorecard to Manage Value in Your Business”. Harvard
Business Review, January, Harvard Business School Publishing, Boston, MA, US.
4 Kaplan, S. Robert. 2002. “Lead and Manage Your Organization with the Balanced Scorecard”. Harvard
Business Review, July, Harvard Business School Publishing, Boston, MA, US.

4. 4
been one of its major sources of income, nowadays competitors controla good part of
the market share. Moreover, the RSHS suffered a slight decrease, underlining that the
organisation have to look for new customers and focus on different services to return
to the levels reached in mid 1990s (see Exhibit 3). Undoubtedly, the large number of
Colombians uncovered by either contributory or subsidized regime creates a concrete
expansion opportunity (see Exhibit 4). Since this is a strong non-profit organisation,
Profamilia possess the knowledge, local infrastructures, and relationships necessary
for reaching low- income customers, qualities often neglected by private
corporations5
.
Internally, improvements in management effectiveness and accountability, as well as
the professionalization and specialisation of its administrative structure, are key
factors for the accomplishment of its mission. Managing donations requires a relatively
simple structure, while generating income and competing in a free market requires
complex organisational skills and a well-crafted architecture, which deficiency is
potentially resource consuming. Indeed, achieving efficiency will contribute
substantially to maintaining affordable prices for disadvantaged people. Avoid loss of
quality is another imperative, since not only is it stated in Profamilia mission, but also
surveys on the perception of clients show that superior service quality and timely
attention are relevant driving forces for its success (see Exhibit 5).
For the creation of an effective business plan, Profamilia needs to individuate its own
competitive advantages and align them with its values. The prestigious image that
Profamilia created during 36 years of service, its specialisation, the ties with
international suppliers, and the relationship with the local population are inestimable
resources to play in the Colombian RSHS arena.
RECOMMENDATIONS
The organisation needs to embark on a new process of strategic planning in order to
“refine the business”6
and strengthen itself as an enterprise. It should define its
objectives under the four perspectives embodied in the BSc, deciding which factors
will drive future financial performance without compromising Profamilia’s vision (see
Exhibit 6).
5 Brugmann, Jeb and Proahalad, Coimbatore K. 2007. “Cocreating Business’s New Social Compact”. Harvard
Business Review, February, Harvard Business School Publishing, Boston, MA, US.
6 Lobo Ivan D, Gutierrez, Roberto, and Sanabria, Raul. 2006. “Profamilia: Planning For Survive”. Social
Enterprise Knowledge Network, November 30, p.11.

5. 5
 Financial Perspective
Concerning the financial perspective, Profamilia needs to increase revenues as
well as improve efficiency within the organisation. In expanding revenues,
Profamilia should launch new services and products, in order to cross subsidise
socially necessary programmes and therefore sustain its bottom-line objective.
Crucial to its survival, increase the market share by targeting the unmet
demand must assume a pivotal role. Decentralisation, community-based
programmes, and strengthening the mobile brigades are viable options, but an
evaluation of community needs should be the first step of the operation.
Undoubtedly, a positive cash flow as well as low ratio of asset to liabilities
represents essential indicators for measuring Profamilia’s success in the RSHS
sector.
 Customer Perspective
Regarding the customer perspective, the intent is to improve the general image
of the NGO by developing regular communication between customer,
stakeholders and employees. Systematise communication between
departments, foster transparency and involve stakeholders in the amelioration
of the business are key elements for increasing the eminent and trustworthy
reputation that Profamilia already enjoy. Moreover, the publication of an annual
memory, together with a constant presence on the web, will facilitate the
process with tangible and immediate results.
 Internal Business Perspective
In support of achieving its customer and financial objectives, Profamilia should
elaborate initiatives to sustain its image and grow its revenue base. To maintain
affordable prices for low-income population, the organisation must strengthen
the relationship with suppliers and evaluate and provide operational excellence
in the cross subside system. Furthermore, Profamilia needs to deepen the
relationship with local population by making consumers aware of available
services, both to increase its customer base and to spread family planning
culture. Diversification of RSHS and schools programmes are useful initiatives
that will create long-term benefits necessary to achieve its goals.
 Learning & Growth Perspective
In order to satisfy the strategic objective, Profamilia must create an
environment that maximize the contribution of his employees. Spreading an
objective-oriented culture among personnel is a challenging task for every

6. 6
enterprise that is willing to compete at its best. Generally, training and
outcome-based agreements are the most common solution for fostering such
an environment. However, the elaboration of a BSc in every department of
Profamilia’s structure will definitely help this process, as it defines clear targets
and increases the commitment of lower level management. The amelioration of
existent structures and equipment is another pivotal point, as surveys show
that quality of installation figures are at the bottom side among the reasons for
choosing Profamilia services (see Exhibit 5).
CONLCUSIONS
Refine the business, meet the unmet demand, and launch new products and services
are undoubtedly the organisation priorities. The workload for the employees is
considerable, and the lack of focus on the human resources dimension is perhaps the
greatest BSc weakness. However, thanks to Profamilia solid reputation and
experience, the organisation has substantial room of improvement in the RSHS sector.

7. 7
Exhibit 1. The Health Sector Reform in Colombia

8. 8
Exhibit 2. Profamilia – Composition of Income (in US Dollars)
Exhibit 3. Volume of Services in Profamilia

9. 9
Exhibit 4. Population and Participation to the Contributory Regime (by type of insurer)
Population and Participation to the Subsidized Regime (by type of insurer)

10. 10
Exhibit 5. Percentage of Clients by Preferences (by type of client)
Perception of Quality of Attention (by type of client)

11. 11Exhibit 6. Profamilia BSc

12. 12
Actual Dec
‘04
Jun
‘05
Dec
‘04
Target
% of Customer Judging Quality of Attention as “Very Good” 45.5% 2% 1.5% 1% 50%
% Returning Customer 77.5% 5% 4% 3.5% 90%
% of Clinics Showing Advertising Material X 75% 25% 0% 100%
% of Customer Considering Profamilia “Extrimely Trustworthy” X 80% 10% 5% 95%
# of Clincs Producing High-Quality Monthly Reports X 80% 20% 0% 100%
# of Clinics Publicising Annual Memory X 80% 10% 10% 100%
# of Clinincs Producing Monthly Informs X 80% 10% 10% 100%
Customer Perspective
Objectives
A)LEADERSHIP IN FAMILY PLANNIG SECTOR
B)GIVE A TRUSTWORTHY IMMAGE
C)TRANSPARENT COMMUNICATION WITH CUSTOMER
AND STAKEHOLDERS SYSTEMATISED
D)ADVOCACY IMPROVED

13. 13
-Review And AmeliorateQuality ControlSystem
-Monthly Service-LevelReview Meeting To Review Service-LevelComplianceAnd ImplementImprovements
-ProactiveManagement Of Risk To Reputation
-ElaborateASystemAnd APracticalGuideTo Handling Customer Complaints
Benchmark Competitors For Quality,Pricing And Coverage
-Renew Advertising
-Improve Material Distribution
-Refresh Constantly Web Pages
-Improve Doctor-Patient Communication
-Clinic Balance Available On Request
-Identify Key Stakeholders WhoCanHelp ProvideAn Outside-In View
-PresentAnnualHigh-Quality Report (Financialand Programmatic) To Stakeholders
-Publish An Annual Memory
-Foster ACulture OfSystematisation AndPublicationOfPublic Reports About TheCompany's Activities
-Strength Efforts To GenerateStrong Public,Political,And Financial Commitment To And Support ForSexual AndReproductive
Health AndRights At TheNationalAnd InternationalLevel
Initiatives
A
B
C
D

14. 14
*The case study does not provide sufficient data to carry out an accurate financial analysis.
Actual Dec
‘04
Jun
‘05
Dec
‘04
Target
Ratio of Total Asset to Current Liabilities X X X X X
Ratio of Current Assets to Total Liabilities X X X X X
Net Income $13787060 +1% +1% +2% $14345464
Gross Revenues X X X X X
Total Market Share Quota X X X X X
# of New Affiliates to Profamilia X 1700 1700 1700 5600
Mean-Time Response to a Service Call X -5% -5% -5% -15%
Cost of Physician Visit / Number of Physician X X X X X
Cost Per Couple Year Protection X X X X X
Financial Perspective*
Objectives
A)FINANCIAL STABILITY MANTAINED
B)GROWTH NEW REVENUE
C)INCREASE THE MARKET SHARE
D)EFFICIENCY INCREASED

15. 15
-Organisation Restructuring
-Conduct A Feasibility Analysis, PrepareFinancialProjections And A Business Plan
-Provide High-Quality FinancialInforms
-EvaluateThe Opportunity Of FinancialInvestments
- IncreasePrivateDonations
-Reduce / ReorganisePersonnelCosts
- Diversification OfSexual And ReproductiveHealth Services
-Sales OfNon-Contraceptive (PapSmearKit, Pregnancy Test)
-Advertising Campaign ThroughEducational Community Programme
-EvaluateNeeds OfLocalCommunities
-Create ACommunity-Based DistributionProgramFor Rural Areas
-Empower And Sustain MobileBrigades
-Decentralizing Budgeting AndManagement OfServiceDelivery, WithLocal Managers Rather Than Headquarters
Officials Making Staffing And Spending Decisions
-Benchmark Other Organisation
-Measure Employees Productivity
-Apply Code OfConduct
Initiatives
A
B
C
D

16. 16
*The case study does not provide sufficient data about the market share quota.
Actual Dec
‘04
Jun
‘05
Dec
‘04
Target
Start of Period Prices / End of Period Prices 0 +0% +0% +0% +0%
% of Local School Launching Familiy Planning Programme 0 10% 10% 10% 30%
Market Share Quota For Alternative Contraceptove Methods* X X X X X
# of New Opportunities Identified 0 1 1 1 3
Internal Business Perspective
Objectives
A)PROVIDE AFFORDABLE SERVICE FOR LOWER CLASS
B)EDUCATE YOUNG COUPLE TO FAMILY PLANNING
C)PROVIDE A VAST RANGE OF PRODUCTS AND
PROCEDURES FOR FAMILY PLANNING
D)SEXUAL AND REPRODUCTIVE HEALTH SERVICES
DIVERSIFICATED

17. 17
-MaintainFavorableRelationshipWith Suppliers Making Early Cash Payment
-StrengthenTies With LocalRetailers With An On-TimeSupply, Ongoing CommunicationAnd DiscountFor
ImmediateCash Payment
-Value Efficiency OfCross Subsidy
-Design Family Planning ProgrammeFor Young Couples
-Monthly Hours To Spend Within School Programmes
-Establish ACommissionFor IncreaseAwareness Of AlternativeContraceptiveMethods Among
Population
-Monthly Service-Opportunity Review Meeting To ReviewCommunity Needs
-Improve Mobile Brigades And Clinics Communication
A
rB
C
rD
Initiatives

18. 18
Actual Dec
‘04
Jun
‘05
Dec
‘04
Target
# of Clinics Providing Monthly Reports X 35 X X 35 (100%)
# of Chief Physicians Successfully Completing Leadership
Training
X 17 17 17 51
# of Employees Successfully Completing Risk Management
Training
X 80 80 80 240
# of Clinics Developing a BSc X 35 X X 35 (100%)
# of Value Bases Training Hours X 40 40 40 120
# of Clinics Elaborating Diagnosis for Technical Equipment X 35 X X 35(100%)
# of New Products Launched X X 1 1 2
Learning & Growth Perspective
Objectives
A)OBJECTIVE-ORIENTED MANAGEMENT CULTURE
DEVELOPED
B)CULTURAL ALIGNEMENT AMONG EMPLOYEES
C)DIAGNOSIS AND STOCK LISTING OF TECHNICAL
EQUIPMENT DRAFTED
D)NEW PRODUCTS INTRODUCED

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-NegotiateOutcome-Based Agreement And Goals With Personnel
-Conduct ASWOTAnalysis
-FormulateAnd EvaluateOperationalPlans Periodically
-Establish Indicators And Agreeing On Outcomes To Monitor And Evaluate
-Implement Performance-Related Policy OfBenefits And Sanctions
-Develop ARisk Management Training ProgrammeFor Employees
-Provide Guidelines For Management To Assess Risk Probabilities Or Impacts
-Establish Long-Term StrategicGoals
-Create ALeadershipTraining
And Provide ChiefPhysicians With Leadership Manuals
-Benchmarks For Activities And ImmediateOutputs
-Renew Advertising
-Improve Material Distribution
-Refresh Constantly Web Pages
-Improve Doctor-Patient Communication
-Clinic Balance Available On Request
-Identify Key Stakeholders WhoCanHelp ProvideAn Outside-In View
-ElaborateADiagnosis For Technical Equipment
-Contact Suppliers NewEquipmentProposal
-Develop Non-Contraceptive Products (PapSmear Kit, PregnancyTest)
A
B
C
D
Initiatives

20. 20
Bibliography
Brugmann, Jeb and Proahalad, Coimbatore K. 2007. “Cocreating Business’s New Social Compact”.
Harvard Business Review, February, Harvard Business School Publishing, Boston, MA, US.
Contrada, Michael. 1999. “Using the Balanced Scorecard to Manage Value in Your Business”.
Harvard Business Review, January, Harvard Business School Publishing, Boston, MA, US.
Kaplan, S. Robert. 2002. “Lead and Manage Your Organization with the Balanced Scorecard”.
Harvard Business Review, July, Harvard Business School Publishing, Boston, MA, US.
Kaplan, S. Robert and Norton, P. David. 1992. “The Balanced Scorecard – Measures that Drive
Performance”, Harvard Business Review, January – February, Harvard Business School Publishing,
Boston, MA, US.
Case Study:
Lobo Ivan D, Gutierrez, Roberto, and Sanabria, Raul. 2006. “Profamilia: Planning For Survive”.
Social Enterprise Knowledge Network, November 30.