Presented By: Hani Zamani (MC112030) Muhammad ALiif Ahmad (MC112098) Nesa Nabipour (MC112075) Nurhayati Othman (MC112100) Sakirin Tam (MC112109)
IntroductionIs an framework for a strategic measurement andmanagement system Balance Scorecardan approach for drivingorganizational improvement towardpre-selected goals integrated management system components: 1) strategic management system 2) communication tool, 3) measurement system
History of BSC 19961990s • Using the• Robert Kaplan Balanced and David Norton Scorecard as a develop BSC Strategic• links strategy with Management performance System 1993 Currently • Putting the • used by some of Balanced the worlds most Scorecard to Work successful companies
Component of BSC Identify financial measures. - return on capital employed - operating income- Customer retention - economic value added- Customer satisfaction - Salve growth & cash flow- Market share target segments - Operationwhere it can improve and create value - Internal value chain- Employee satisfaction - Innovation- Skill & moral - Sale service- Employee retention.- Real time system
Component of BSCPaul Niven’s analogy of the Balanced Scorecard is that of a tree
Phases of BSC Kaplan and Norton, 2000 Planning TechnicalReadiness Implementation Organizational Operation/MoAssessment • Leadership Team Integration • Input Information dification• Identify • Strategic Review (mission/vision/str (vision/strategies/ • Integrate • Data Update Needs measures) /Existing ategic plan) • Analysis• Identify • Build Scorecards • Communicate • Assign Strategies • Regular Resources to BSC • Set Targets and Objectives Reporting• Confirm Perspectives Alert Levels • Assign • Refinement Leadership • Develop Strategy • Standardize Data Measurement Commitment Definitions Data Map • Identify/Agree on • Presentation of Responsibility Measures Data • Develop Implementation Plan
0 Zhang Shu Engineering.0 Revenue of approximately 10 million US dollars per year.0 It is striving to maintain its viability in the highly competitive engineering market.0 It develops its business strategy along with objectives.
Perspectiv Strategy ObjectiveeFinancial • We will ensure that we use our resources and • Financial success. people to maintain financial success.Customer • We will meet or exceed our customers’ current • Customers impressed with quality of engineering and future expectations and requirements with solutions and services. innovative, high quality engineering solutions and • Attract new customers. superior service, at a reasonable cost. • Retain current customers. • Provide on-time delivery of solutions, goods and services.Internal • We will provide our engineering and • Achieve and maintain cutting-edge production programming professionals and staff with an capability. efficient and effective means to produce and deliver • Maintain or if necessary acquire well-functioning high quality, innovative technical engineering facilities. solutions and services in a timely fashion.Innovation • We will attract and retain high calibre people and • Maintain a trained and knowledgeable workforce.Learning promote an environment that develops their • Be on the cutting edge of engineering, computerand technical, interpersonal, and business skills and and business technology.Growth knowledge. • Develop business through innovative client • We will strive to develop and maintain an active identification and acquisition means of attracting new clients and a means to expand our practice into related engineering and computer development areas. • We will strive to be aware and on the cutting-edge of engineering and computer technology.
Perspective Measures TargetsFinancial • Increased operating income. • Increase by 10%. • Dollar amount of operating expenses. • Maintain expense levels.Customer • Number of new customers. • Increase by 50% • Number of repeat customers. • Increase 10% • Number of requests for clarifications. • One per sheet • Number of required revisions. • Decrease by 30% • Number of missed project deadlines. • Reduce to zeroInternal • Software version currency. • Use latest software versions • Number of departures from the firm’s • Reduce to zero engineering standards. • Use of templates. • Use at least 90% • Number of common elements used. • Increase by 10%Innovation • Amount of language training for each • 2 hours per weekLearning and employee. • 2 sessions yearGrowth • Amount of business training for each • 5 per year employee. • Amount of technical training, seminars or • Increase by 10% conferences attended for each employee. • Number of price quotations from innovative client sources.
0 From both strategy map, we found that the company’s targets is tied to measure and each measure is tied to an objectives.0 Other point is each objective is tied to at least one element of company’s strategy.0 The success of any balanced scorecard implementation is depend in that critical connection.0 The reason: Short-term strategy execution, and strategy is the means of realizing the company’s mission, values, and vision.
Advantages of BSC1. Balance between financial and non-financial indicators of success2. Balance between internal and external constituents of theorganization3. Balance between lag and lead indicators of performance
LimitationsCause-and-effect relations are not time-wise connected and not related inrealityExternal environment and several interest groups are out of pictureHierarchical top-down set-up creates problems in implementationUnsuitability to unique or unhealthy enterprises