SlideShare a Scribd company logo
1 of 104
Download to read offline
1/104
   Background, Purpose, And Position
   Practice Themes
   The Balanced Scorecard Offering
   Thoughts On Strategy
   Strategy
   Planning
   Beneficial Outcomes
   Measurement
   Sample Balanced Scorecards
   BSC Training Resources
   References
                                        2/104
3/104
Positioning




      4/104
Positioning




   BSC has many confusing and sometimes conflicting definitions




IT Performance Management applies these concepts to the strategic,
               tactical and operational aspects of IT


                                                                     5/104
6/104
Success starts with the management of intangible assets

                                                          7/104
Drivers




† “The Balanced Scorecard: To Adopt or not to adopt?” Kevin Hendricks, Larry Menor
and Christine Wiedman, Ivey Business Journal, Nov/Dec 2004
                                                                                        8/104
Drivers




             Balanced Scorecard would more likely benefit firms that
             followed a Prospector or Analyzer strategy, and likely not
             benefit firms that followed a Defender or Reactor strategy.


† “The Balanced Scorecard: To Adopt or not to adopt?” Kevin Hendricks, Larry Menor
and Christine Wiedman, Ivey Business Journal, Nov/Dec 2004
                                                                                        9/104
Drivers




   10/104
Drivers




            “There is no such thing as a free lunch,” — Milton Friedmann




† “New Math for the New Economy,” Baruch Lev, Fast Company, 31, January, 2000

                                                                                   11/104
Drivers




Identify the needs of the IT department that focus on …




                                                            12/104
13/104
Approach




Balanced Scorecard Is 1 Of 4 Needed Capabilities For Success



                  Business and Technology Governance




                                                                    Competitive Advantage
                                   Real Options        Enterprise




                                                                         Sustained
                    Capabilities
    Balanced                          Based           Program &
                      Based
    Scorecard                       Portfolio           Project
                     Planning
                                   Management         Management

                Enterprise Class Tools and Work Processes

       Readiness Assessment
       Mobilization
       Alignment
       Sustainment


                                                                                            14/104
Approach




Mission and Vision are starting points for developing a Balanced
Scorecard from the “top down.” Without a Mission and Vision, the
underlying performance measures have no foundation on which to rest.




                                 Balanced Scorecard
            Mission                                     Why We Exist

        Values                                        Guiding Principles

     Vision                                            Picture of the Future

 Strategy                                              Differentiating activities




                                                                                    15/104
Approach




Identifying the strategic initiatives that support the organization strategies is key
beneficial outcome of deploying a Balanced Scorecard in IT

                  General Mission                           What do we do?

                 Strategic Themes                       Why is it important?


                Desired Outcomes                    What results do we want?

                                                How will we know when we’ve
                        Metrics                 achieved these results?

                                           What specific actions do we
                       Strategic           believe will lead to these results?
                      Initiatives

                              Connecting specific actions with the strategy of the
                              firm is the role of a Balanced Scorecard
                                                                                     16/104
Approach




The four phases of the Balanced Scorecard deployment are broad and
general purpose, focused on increasing maturity. The details of the
deployment must be developed in order to achieve success
   Readiness            Mobilization             Alignment             Sustainment
 Assess readiness      Mobilize change       Translate the         Motivate the staff
  for BSC initiative     through executive      strategy              Govern the
 Identify gaps &        leadership            Align the              organization
  closure plans                                 organization

 Conduct               Achieve               Define and clarify    Focus the staff
  Readiness              commitment from        the strategy          Align
  Assessments            the top                connections            accountability and
    • Cultural          Build the             Establish long         rewards
    • Operational        executive team         term targets          Develop human
    • Data              Build the case for    Communicate the        capital
    • Governance         change                 strategy              Re–define
 Identify and close    Identify initial      Connect measures       governance
  gaps                   KPIs, CSFs, Goals      with strategies       Get results
 Prepare for            and Initiatives
  deployment            Identify target
                         strategies

     Discovery             Missionary           Change Agent         Strategy Focused
                                                                                            17/104
Approach




      Readiness               Mobilization                   Alignment                   Sustainment

                                                       Translate the strategy
 Assess readiness for
  BSC initiative
                          Mobilize change
                           through executive           Align the organization
                                                                                     Motivate the staff
                                                                                     Govern the
                                                                                                                The four phases of the
 Identify gaps &          leadership                                                 organization              BSC deployment are a
  closure plans
                                                                                                                sequence that builds
 Conduct Readiness       Achieve commitment           Define and clarify the        Focus the staff
  Assessments              from the top                  strategy connections          Align accountability    the increasing maturity
  • Cultural
  • Operational
                          Build the executive
                           team
                                                        Establish long term
                                                         targets                    
                                                                                        and rewards
                                                                                        Develop human           of the scorecard.
  • Data                  Build the case for           Communicate the                capital
  • Governance             change                        strategy                      Re–define
 Identify and close      Identify initial KPIs,       Connect measures               governance
  gaps                     CSFs, Goals and               with strategies               Get results
 Prepare for              Initiatives
  deployment              Identify target
                           strategies
       Discovery                Missionary                  Change Agent                Strategy Focused                 With the scorecard in place, the
                                                                                                                         Capabilities needed to fulfill the
                                                                                                                         strategy, the options trade–offs
                                                                                                                         for existing and future projects,
                                                                                                                         and the enterprise tools to
                                                                                                                         manage this portfolio.


                                                      Business and Technology Governance




                                                                                                                             Competitive Advantage
                                                                                  Real Options                  Enterprise




                                                                                                                                  Sustained
                                                       Capabilities
                                Balanced                                             Based                     Program &
                                                         Based
                                Scorecard                                          Portfolio                     Project
                                                        Planning
                                                                                  Management                   Management


                                                    Enterprise Class Tools and Work Processes



                                                                                                                                                        18/104
Approach




† Alignment: Using Balanced Scorecard to Create Company Synergies,
Norton and Kaplan, Harvard Business School Publishing Company, 2006
                                                                         19/104
Approach




                                            Clarify mission &
                              Mission       Vision statement
                                                                     Vision

                                                 Develop
                                             Strategic Goals
                                                                 Strategic Goals

                                                                         Balanced Scorecard
                                                 Derive                     Strategy Map
                          Sub–Goals            Sub–Goals                                                                     Stakeholder Perspective

                                                                                                        Service Attributes                                     Relationships          Image
                                                                                                                                                              Recognition          Stakeholder
                                                                          Application Quality           Time to Delivery        System Capabilities
                                                                                                                                                                of Value            Relations



                                                                                                                    Internal Processes Perspective

                                           Map Sub-Goals to                       Operations
                                                                                  Management
                                                                                                                       Stakeholder
                                                                                                                       Management
                                                                                                                                                       Innovation
                                                                                                                                                       Processes
                                                                                                                                                                               Regulatory
                                                                                                                                                                               Processes




                                          each quadrant of the                                                     Learnings & Growth Perspective
                                                                                                                                   Human Capital

                                                                                                                                 Information Capital


                                          Balanced Score Card                                 Culture
                                                                                                                                Organizational Capital
                                                                                                                        Leadership                       Alignment             Teamwork


                                                                                                                               Budget Perspective
                                                                                                          Project                     Budget                  Resource
                                                                                                        Performance                 Management               Management




                       GQ(I)M                                                                                                                             KPI’s, Targets,
                         Goal
                         Question
                                        For each BSC Quadrant                                                                                             CSF’s for each
                         Indicator                                                                                                                        Objective
                         Measure     Apply GQ(I)M to:                                                        Indicators
                                      – Identify measurement areas


                                                                                   Trouble Reports
                                      – Develop measurement goals
                                      – Pose relevant questions                                           Module




Derived from                          – Postulate indicators                   Performance Data
“Developing Enterprise–Wide
Measures for Tracking
                                      – Identify data elements                     Elements
Performance,” Software
Engineering Institute
                                                                                                                                                                                                    20/104
Approach




      Focusing on Goals, the Success Criteria separates the measures of success
      from the task progress indicators. This separation distinguishes physical
      progress from business value – both are needed, but they are not the
      same.
                                                                                                    Success
                                                              Goal                                  Criteria



                                                         Strategy to                     Success Indicators
                                                         accomplish
                                                         the goal                                   %


                                                                                                        1   2   3   4   1   2   3   4
                                                                                                        Reporting Periods
             Analysis Indicators
                   100
                    80
                    60                             Tasks to Accomplish
                    40
                    20                                     goal
                                 Tasks                                                        Progress Indicators
                                                  Task 1
                                                  Task 2                                      100                                       Actual
                   Test Cases
                   Complete




                                                                                               80
                                                  Task 3                                       60
                                                     •                                         40                                                Planned

                                Functions
                                                     •                                         20
                                                  Task n                                                                                Reporting Periods

Derived from “Developing Enterprise–Wide Measures for Tracking Performance,” Software Engineering Institute”
                                                                                                                                                                21/104
Approach




                                                                 GOAL(s)

                                Question 1                        Question 2   •••    Question n




                          SLOC             Staff-hours              Trouble Reports   Milestone Dates



Derived from “Developing Enterprise–Wide Measures for Tracking
Performance,” Software Engineering Institute``
                                                                                                           22/104
Approach




                        IT Development
                            Balanced
                           Scorecard
 Business       IT
Balanced    Balanced
Scorecard   Scorecard
                         IT Operations
                            Balanced
                           Scorecard



                                            23/104
Approach




   24/104
Themes




† Michael E. Nagel, Vice President, Balanced Scorecard Collaborative
                                                                         25/104
Themes




  26/104
Themes




If executives are having a normal meeting and talking about strategy, but
instead focusing on tactics – then they’re not fulfilling their roles as
leaders of their respective organizations




                                                                        27/104
Themes




  28/104
Themes




  29/104
Themes




† Advice from Bruce W. Harber, CEO North Shore Health Board, Vancouver, B.C.
                                                                                 30/104
Positioning




      31/104
Positioning




From, Functions of an Executive, Chester Barnard, 1938.
Barnard laid the foundations of management theory. Bernard is widely
credited with having originated the “Systems” approach to the study of
organizations. He recognized that in order for the organization to survive in
the external environment and to succeed in the long run, it was necessary
to sustain cooperation from employees by satisfying the condition of
efficiency.

                                                                                      32/104
Positioning




      33/104
Positioning




      34/104
Positioning




These are core issues with almost every organization




                                                             35/104
Positioning




 The original 4–quadrant BSC fails to make the cause and effect connection
 between action and outcome – strategy maps replace this approach and
 show how to “connect the dots”

1.


2.


3.



                                                                         36/104
Positioning




A scorecard practice should move the client toward the 3rd generation.
They’ll have to get there eventually in order to impact their organization
– might as well start out headed in that direction on day one.

    First Generation                 Second Generation       Third Generation



             BSC as a                     BSC as a
                                                                BSC as a framework for
           performance                 management
                                                                 organizational change
         evaluation system                 system




     • Performance measures             • Organizational learning   • Organizational change
     • Breakdown of strategy            • Identifying and solving   • Strategy maps
     • Four perspectives                  operational problems      • Strategy patterns
     • Strategic objectives,            • Feedback for planning     • Integration of budget
       performance indicators, key      • Organizational              and personnel plans
       performance parameters             knowledge                 • Changing the
     • Performance linked to                                          organizational behavior
       compensation
                                                                                          37/104
Positioning




      38/104
Positioning




      39/104
Positioning




      40/104
Positioning




Strategies fail for a simple reason – their inability to be executed




                                                                             41/104
Positioning




     The four primary barriers that lay the seeds of strategy failure …

              Only 10% of organizations successfully execute their strategies
     Vision Barrier
          Only 5% of the workforce                                    85% of executive teams spend
           understands the strategy                                     less than one hour per month
          Informed action is virtually                                 discussing strategy
           impossible without sound                                    Without a clear and concise
           knowledge of the organizations                               blueprint for success – the
           strategy                                                     strategy – manage will focus
     People Barrier                                                    on financial and operational
                                                                        details
          Only 25% of managers have                                   Resource Barrier
           incentives linked to strategy
          Incentives linked to short-                                 60% of organizations don’t
           term financial targets, leads to                             link budget to strategy
           less than rational decision                                 Based on strategy, what
           making at the expense of long                                initiatives distinguish us from
           term sustainable success                                     our competition?
† Norton and Kaplan and, in Balanced Scorecard Diagnostics: Maintaining Maximum Performance,
Paul R. Niven, John Wiley & Sons and Strategy Safari, Mintzbert, Ahlstrand and Lampel, The Free
Press, 1998.
                                                                                                        42/104
Positioning




     Instituting change is at the heart of a successful Scorecard
     In many studies of patients who have undergone coronary bypass
     surgery, only one in nine people, on average, adopts healthier day-to-day
     habits […] [even if] they clearly see the value of changing their behavior.




“The Neuroscience of Leadership,” David Rock and Jeffery Schwartz, strategy+business, Summer 2006
                                                                                                          43/104
Positioning




All five components of strategy are needed for true success

 Vision      Skills     Incentives   Resources Action Plan     Success


 Vision      Skills     Incentives   Resources Action Plan     Confusion


 Vision       Skills    Incentives   Resources Action Plan     Anxiety


                        Incentives Resources Action Plan       Gradual
 Vision      Skills
                                                               Change

 Vision      Skills     Incentives   Resources Action Plan     Frustration


 Vision      Skills     Incentives   Resources   Action Plan   False Starts



                                                                         44/104
Positioning




      The BSC must be placed in the context of process improvement




Deriving Enterprise-Based Measures Using the Balanced Scorecard and Goal-Driven measurement Techniques, Wolfhart
Goethert and Matt Fisher, Software Engineering and Measurement Analysis Initiative, CMU/SEI-2003-TN-024, October 2003

                                                                                                                              45/104
Positioning




A simple set of goals provides a good staring point for a BSC

              Strategies            Key Performance Indicators
                                       Customer satisfaction
       User Be the supplier of         User survey score
 Orientation choice for services
                                       Percentage of projects delivered on time
                                       Total business impact
           Focus resources on          Service budget as a percentage of revenue
  Business attaining business
     Value strategies through          Cost impact for each release
           effective delivery          Percentage of budget allocated to new
                                        development
                                       Budget versus actual
Operational Deliver timely andat       Staff utilization
Excellence effective services
            or under budget            Staff turnover
                                       Historical availability
             Develop internal
     Future capabilities toto
                            learn    Number of documented best practices
 Orientation and innovate
             exploit future          Existence of Process Architecture
             opportunities

                                                                                    46/104
Positioning




                                                                      Stakeholder Perspective

                                                 Service Attributes                                     Relationships          Image
                                                                                                       Recognition          Stakeholder
                           Application Quality   Time to Delivery        System Capabilities
                                                                                                         of Value            Relations



                                                             Internal Processes Perspective
                                   Operations                   Stakeholder                     Innovation              Regulatory
                                   Management                   Management                      Processes               Processes



                                                            Learnings & Growth Perspective
                                                                            Human Capital

                                                                          Information Capital
                                                                         Organizational Capital
                                       Culture                   Leadership                       Alignment             Teamwork


                                                                        Budget Perspective
                                                   Project                     Budget                  Resource
                                                 Performance                 Management               Management




Connecting Critical Success Factors with Key Performance Indicators provides
traceability from execution at the project level to fulfillment of strategic
objectives.
                                                                                                                                          47/104
Positioning




  Selection Key Performance Indicators identified
 Connection align KPIs with Critical Success Factors
  Collection Manage KPI process
             Dashboards, Strategy Maps, Performance
Presentation
             Indicators
      Action Drive performance improvement


                                                             48/104
Positioning




        Vision              Top Down
   Positively Impact        Making the effect-and-cause connection between
       Financial
     Performance
                            Strategy and Key Performance Indicators is the role of
                            an Balanced Scorecard automation system
Strategic   Objective          Performance Goal           Critical Success     Key Performance
                                                           Factor (CSF)         Indicator (KPI)
    Be The Preferred
 Supplier Of Business          Provide on-time, on-        Budget Variance         BPI ≥ 0.95
      Applications                 budget, on-
                                                           Schedule Variance       CPI ≥ 0.97
      Traceable to             specification for our
  Increased Customer          enterprise applications                            Function Points
        Revenue                                            % Requirements
                                                                                Delivered ≥ 90%
                                                              Variance
                                                                                     Target

                                                            Cost of Delivery   Declining Cost per
                                 Provide scalable               Impact             Customer
                                   platform for
                                                                               SLA Compliance ≥
                                 acquisition and          Performance Impact
                                                                                     0.98
                                  growth of our
                                  customer base           Global Operational   24/7/365 Non-Stop
                                                               Baseline            Operations


         Why                          What                       How              Measures

                        Flow Down from Strategy to KPIs
                                                                                                    49/104
Positioning




       Vision           Bottom Up
  Positively Impact     Making the cause-and-effect connection between Key
      Financial
    Performance
                        Performance Indicators and Strategy is the role of an
                        Balanced Scorecard automation system
Strategic Objective         Performance Goal           Critical Success     Key Performance
                                                        Factor (CSF)         Indicator (KPI)
   Be The Preferred
Supplier Of Business        Provide on-time, on-        Budget Variance         BPI ≥ 0.95
     Applications               budget, on-
                                                        Schedule Variance       CPI ≥ 0.97
     Traceable to           specification for our
 Increased Customer        enterprise applications                            Function Points
       Revenue                                          % Requirements
                                                                             Delivered ≥ 90%
                                                           Variance
                                                                                  Target

                                                         Cost of Delivery   Declining Cost per
                              Provide scalable               Impact             Customer
                                platform for
                                                                            SLA Compliance ≥
                              acquisition and          Performance Impact
                                                                                  0.98
                               growth of our
                               customer base           Global Operational   24/7/365 Non-Stop
                                                            Baseline            Operations


        Why                        What                       How              Measures

                       Flow Up from KPIs to Strategy
                                                                                                 50/104
Positioning




Many organizations have operational metrics in place. Identifying the Key
performance measures is the starting place for developing a strategy
based Scorecard
       Vision          Moving from ad hoc collections of performance metrics to Key Performance Metrics (KPI) to a
                       Strategy Focused Organization (SFO), is a natural progression for many organizations.
 Positively Impact
     Financial         Making the connections between “ad hoc” metrics to KPI’s then to CSF’s creates a Line of Sight
   Performance         between tactical performance measurement of strategy.
Strategic Objective       Performance Goal           Critical Success Factor      Key Performance
                                                               (CSF)               Indicator (KPI)
   Be The Preferred
Supplier Of Business      Provide on-time, on-           Budget Variance               BPI ≥ 0.95
     Applications             budget, on-
                                                        Schedule Variance              CPI ≥ 0.97
     Traceable to         specification for our
 Increased Customer      enterprise applications                                   Function Points
                                                         % Requirements
       Revenue                                                                     Delivered ≥ 90%
                                                            Variance                                     An ad hoc collection of
                                                                                        Target
                                                                                                         existing operational
                                                         Cost of Delivery          Declining Cost per    performance metrics.
                             Provide scalable                Impact                    Customer          Each metric was
                               platform for                                                              created for a good
                                                       Performance Impact        SLA Compliance ≥ 0.98
                         acquisition and growth                                                          reason, but not
                          of our customer base          Global Operational        24/7/365 Non-Stop      necessarily for a the
                                                             Baseline                 Operations         measurement of a
                                                                                                         strategic objective
        Why                      What                         How                     Measures

                       Flow Up from Ad Hoc to KPIs to CSF to Goals to Strategy




                                                                                                                              51/104
Positioning




                                           Stakeholder Perspective

                      Service Attributes                                     Relationships          Image
                                                                                                                                                         The Metrics Map describes the
                                                                                                               Bi-directional
                                                                            Recognition          Stakeholder

                                                                                                                                                          relationships between the Key
Application Quality   Time to Delivery        System Capabilities
                                                                              of Value            Relations



                                  Internal Processes Perspective
                                                                                                                traceability                             Performance Indicators, Critical
                                                                                             Regulatory
                                                                                                                  between                                       Success Factors, and
                                                                                                                tactics and
        Operations                   Stakeholder                     Innovation
        Management                   Management                      Processes               Processes
                                                                                                                                                          Performance Goals in support
                                 Learnings & Growth Perspective                                                   strategy                                    of a Strategic Objective
                                                 Human Capital
                                               Information Capital
                                              Organizational Capital
            Culture                   Leadership                       Alignment             Teamwork


                                             Budget Perspective                                                        Vision              Bottom Up
                        Project                     Budget                  Resource                                                       Making the cause-and-effect connection between Key
                                                                                                                   Positively Impact
                      Performance                 Management               Management                           Financial Performance      Performance Indicators and Strategy is the role of an
                                                                                                                                           Balanced Scorecard automation system
                                                                                                                Strategic Objective            Performance Goal          Critical Success Factor      Key Performance
                                                                                                                                                                                   (CSF)               Indicator (KPI)

                                                                                                                   Be The Preferred                                           Budget Variance              BPI ≥ 0.95
                                                                                                                                               Provide on-time, on-
                                                                                                                 Supplier Of Business
                                                                                                                                              budget, on-specification
                                                                                                                Applications Traceable                                       Schedule Variance             CPI ≥ 0.97
                                                                                                                                                 for our enterprise
                                                                                                                to Increased Customer
                                                                                                                                                    applications
                                                                                                                       Revenue
                                                                                                                                                                              % Requirements             Function Points
                                                                                                                                                                                 Variance            Delivered ≥ 90% Target

 The Strategy Map described the
   cause and effect connection
                                                                                                                                                                                                       Declining Cost per
                                                                                                                                                                           Cost of Delivery Impact
                                                                                                                                                                                                           Customer
                                                                                                                                                  Provide scalable

     between each Strategic
                                                                                                                                              platform for acquisition
                                                                                                                                                                            Performance Impact       SLA Compliance ≥ 0.98
                                                                                                                                                 and growth of our
                                                                                                                                                   customer base

            Objective                                                                                                                                                        Global Operational
                                                                                                                                                                                 Baseline
                                                                                                                                                                                                      24/7/365 Non-Stop
                                                                                                                                                                                                          Operations



                                                                                                                        Why                           What                         How                    Measures



                                                                                                                                         Flow Up from KPIs to Strategy

                                                                                                                                                                                                                            52/104
53/104
Strategy




Strategy is not the same as operational excellence …




                                                          54/104
Strategy




                         Obtaining
                         commitment for a                       Staking out the
                         grand purpose                          Territory


                                  Core                            Risks to be
        Belief
      Systems
                                 Values                            Avoided        Boundary
                                                                                  Systems



                                               Business
                                               Strategy

                                                                    Critical
    Interactive                                                                   Diagnostic
       Control               Strategic                                            Control
      Systems
                           Uncertainties                         Performance      Systems
                                                                   Variables
                          Positioning for                       Getting the job
                          tomorrow                              done


† “Levers of Control: How Managers          Internal Controls
Use Innovative Control Systems to
Drive Strategic Renewal ,” R. Simons,
Harvard Business School, 1995
                                                                                               55/104
Strategy




† “The Balanced Scorecard: To Adopt or not to adopt?” Kevin Hendricks, Larry Menor
and Christine Wiedman, Ivey Business Journal, Nov/Dec 2004

                                                                                        56/104
Strategy




Mission and Vision provide the anchors for developing strategy. Without
a mission and vision the underlying performance metrics don’t have a
foundation on which to stand. “Why are we measuring this activity?” Ask
the Mission and Vision for the answer




  ‒                              ‒
  ‒
  ‒                              ‒




                                                                       57/104
Strategy




                   To be effective, the scorecard should have attributes like these




† Implementing Balanced Scorecard, Jessica Keys, and compensation is important, but it is also important to
   The connection between scorecard performance Auerbach, 2005
   understand that this connection comes ONLY in a mature organization where the scorecard and the resulting
   performance has been operational for some time. Without this maturity the expected benefits will not appear
                                                                                                                    58/104
Strategy




      It is easy to fall into the trap of being metrics focused rather than strategy
         focused. Make sure these “sins” are not present in the BSC. If they are,
                            take explicit actions to remove them

                         Common Pit Falls                       Impact on the Performance Initiative
                         An IT centric view of IT               Lack of senior management involvement in metrics
            Selection




                         performance                            selection and refinement
                         Measures that don’t                    No explicit link between metrics and IT strategy
                         matter to the business
                         Lack of common ground                  Lack of common metrics definitions complicates
            Collection




                                                                aggregation
                         An over reliance on tools              Lack of focus on data collection processes leads to
                                                                inaccurate and outdated data
                         No drill–down capability               Unavailable context for scorecard–level metrics
            Reporting




                                                                hinders interpretation
                         Too many metrics                       Lack of aggregation and screening of low–level
                                                                metrics results in cumbersome reports
                         No individual impact                   Individual lack incentives to impact scorecard
            Use




Implementing Balanced Scorecard, Jessica Keys, Auerbach, 2005
                                                                performance

                                                                                                                         59/104
Strategy




                                 It is VALUE we’re after with the IT Balanced Scorecard

                                                                                              

                                                                                               
      

      
                                                                                               


                                                                                              

                                                                                               

      



“The Market–Based Adaptive Enterprise: Listening, Learning and Leading Through Systems Thinking, Vincent
P. Barabba, in Proceedings Russell L. Ackoff and The Advent of Systems Thinking, March 1999


                                                                                                              60/104
Strategy




In order to deliver value we must first be ready to deliver value




                                                                       61/104
Strategy




    ¾’s of the BSC value comes from intangible assets.
Only the financial quadrant can be traced to tangible assets




                                                                  62/104
Strategy




An example of intangible asset manage built around a scorecard




   Strategy converts intangible assets into tangible outcomes


                                                                    63/104
64/104
65/104
Planning




                            Planning is a continuous improvement process




Information Outlook Online, March 2005

                                                                              66/104
Planning




                       Role Responsibilities
                                      Assumes ownership for the Balanced Scorecard project
                                      Provides background information to the team on the strategy and methodology
                Executive             Maintain communication with senior management
                 Sponsor              Commit resources to the team
                                      Provide support and enthusiasm for the Balanced Scorecard throughout the
                                       organization
                                      Coordinates meetings; plans, tracks and reports team results to all audiences
                Balanced              Provides thought leadership on the Balanced Scorecard methodology
               Scorecard              Ensures that all relevant background material is available to the team
               Champion               Provides feedback to the executive sponsor and senior management
                                      Facilitates the development of an effective team through coaching and support
                                      Provide expert knowledge of business unit or functional operations
                                      Inform and influence their respective senior executives
        Team Members
                                      Act as Balanced Scorecard ambassadors within their business units
                                      Act in the best interest
                                    Increase awareness of organizational change issues
        Organizational
                                    Investigates change-related issues affecting the Balanced Scorecard project
        Change Expert
                                    Works with the team to produce solutions mitigating change-related risks

Balanced Scorecard Diagnostics: Maintaining Maximum Performance, Paul R.
Niven, John Wiley & Sons

                                                                                                                       67/104
Planning




                                                                                                               1   1   1   1   1   1   1   1   1   1    2
             Planning Phase                                                1   2   3   4   5   6   7   8   9
                                                                                                               0   1   2   3   4   5   6   7   8   9    0

       1     Develop objectives for the BSC
       2     Determine the appropriate business unit
       3     Gain executive sponsorship
       4     Build the BSC team
       5     Formulate the project plan
       6     Develop the communication plan
             Development Phase
       1     Gather and distribute background material
       2     Develop or confirm, mission, values, vision, & strategy
       3     Conduct executive interviews
       4     Develop objectives and measures
      4a     Executive workshop
      4b     Gather employee feedback
       5     Develop cause and effect linkages
      5a     Executive workshop
       6     Establish targets for measures
      6a     Executive workshop
       7     Develop ongoing Balance Scorecard plan


Balanced Scorecard Diagnostics: Maintaining Maximum Performance, Paul R.
Niven, John Wiley & Sons

                                                                                                                                                       68/104
69/104
Beneficial Outcomes




            The benefits appear “soft” at first, they are “booked” as well




Allan R. Bailey, Chee W. Chow, and Kamal M. Haddad,
"Continuous Improvement in Business Education: Insights from the
For-Profit Sector and Business School Deans," Journal of
Education for Business, January-February 1999, pp. 165-181
                                                                                70/104
Beneficial Outcomes




             71/104
72/104
73/104
Measurement




      74/104
Measurement




             Information Needs   Techncial &       User Feedback
                                 Management
                                  Processes




                     Core Measure Processes

 Establish
                        Plan             Perform          Evaluate
Commitment
                                                   Analysis
                                                   Results


              Improvement Actions



                                                                     75/104
Measurement




    People           Procedures                Data             Software           Hardware
 Owner of the       Procedures           Performance       Software for       Personal
  PMS                 and rules for         relevant data,     the extraction,     computers
 People              the definition of     the “as is”        transformation     Servers
  accountable for     the                   values             and loading of
                      performance                              the data           Communication
  the units of                             “To be” values                         infrastructure
  measure             indicators            of the            Database
                     Rules for data        performance        management         Storage
 People who set
  up and              management            indicators         software. Data
  maintain the       Rules for data       Performance        warehousing
  PMS                 communication         results            software
 Data suppliers     Rules for the         (calculated       Data analysis
                      use of the            data)              software
 Internal and
  external users      performance          Meta data         Presentation
  of the PMS          results               description of     and
                                            the                communication
 Internal and                              performance        software
  external                                  indicators
  stakeholders




                                                                                              76/104
Measurement




Guide to a Balanced Scorecard
Performance Management Methodology,
National Partnership for Reinventing
Government, U. S. Department of
Commerce, 1999




                                         77/104
Measurement




      78/104
Measurement




                 It’s easy to create “ugly” measures, so test the outcomes of each measure before use




“What to do with your ugly measures!,” Stacey Barr, www.staceybarr.com


                                                                                                        79/104
Measurement




     Too many CXOs judge implementations by measuring the technical
     capacity of a project, instead of considering how it has improved their
     companies' business
“The Metrics Trap,” CIO Magazine, Feb 15, 2004

                                                                               80/104
Measurement




                  Each metric needs to be tested against these attributes
      1.

      2.

      3.

      4.

      5.

“Two Mistakes Most Professional Services Organizations Make,” Thomas Lah,
Technology Professional Services Association (TPSA)
                                                                                  81/104
Measurement




          Perverse metrics, linked to perverse incentives, always yields to perverse results



    1.
    2.
    3.
    4.
    5.




Implementing Balanced Scorecard, Jessica Keys, Auerbach, 2005

                                                                                               82/104
Measurement




                          Metrics are useful, indicators are better suited for strategy




Deriving Enterprise-Based Measures Using the Balanced Scorecard and Goal-Driven measurement
Techniques, Wolfhart Goethert and Matt Fisher, Software Engineering and Measurement Analysis Initiative,
CMU/SEI-2003-TN-024, October 2003

                                                                                                                 83/104
84/104
85/104
86/104
Stakeholder Perspective

                      Service Attributes                                     Relationships          Image
                                                                            Recognition          Stakeholder
Application Quality   Time to Delivery        System Capabilities
                                                                              of Value            Relations



                                  Internal Processes Perspective
        Operations                   Stakeholder                     Innovation              Regulatory
        Management                   Management                      Processes               Processes



                                 Learnings & Growth Perspective
                                                 Human Capital

                                               Information Capital
                                              Organizational Capital
            Culture                   Leadership                       Alignment             Teamwork


                                             Budget Perspective
                        Project                     Budget                  Resource
                      Performance                 Management               Management


                                                                                                               87/104
“Do the right things, do them well, do them with less, to…”
Business
 Results




                        ……reduce overall
                        ……reduce overall                          …enable profitable
                                                                  …enable profitable                        …enable firm to accelerate
                                                                                                            …enable firm to accelerate
                       operating costs -- R2
                       operating costs R2                          operations -- R1
                                                                   operations R1                             market deployment -- R3
                                                                                                             market deployment R3

                                        Competency                                                      Contribution
Expectations




                                        Competency                        Credibility                   Contribution
  Project




                         “Keep my
                          “Keep my                   “Manage to
                                                      “Manage to                “Understand my              “Implement timely and cost-
                                                                                 “Understand my              “Implement timely and cost-
                     systems running”
                     systems running”              corporate goals”
                                                   corporate goals”              operation” -- E3              effective solutions” -- E4
                                                                                  operation” E3                effective solutions” E4
                            -- E1
                               E1                        -- E2
                                                            E2

                         Operational Excellence
                         Operational Excellence                            Project // IT Alignment
                                                                           Project IT Alignment                  Solutions Leadership
                                                                                                                 Solutions Leadership
                          Reduce the cost of
                           Reduce the cost of                         Provide appropriate technology to
                                                                      Provide appropriate technology to                Provide innovative
                                                                                                                       Provide innovative
                        providing services -- P1
                        providing services P1                               enable success -- P2
                                                                             enable success P2                           solutions -- P3
                                                                                                                         solutions P3
Internal Processes




                                                    Deliver solutions
                                                    Deliver solutions                     Manage
                                                                                           Manage                        Leverage
                                                                                                                          Leverage
                         Improve
                          Improve                                                    requirements -- P7
                                                    on schedule -- P6
                                                    on schedule P6                    requirements P7                 knowledge and
                                                                                                                      knowledge and
                      processes for
                      processes for
                                                                                                                    best practices -- P10
                                                                                                                    best practices P10
                        efficiency
                        efficiency
                       and quality --
                       and quality                     Centralize IT
                                                       Centralize IT                 Enhance customer
                                                                                     Enhance customer
                            P4
                             P4                      resources -- P5
                                                      resources P5                   relationships -- P9
                                                                                      relationships P9

                                                      Strategically deploy services -- P8
                                                      Strategically deploy services P8
People and




                       Develop and
                        Develop and                                                     Recognize team
                                                                                         Recognize team          Provide employees with
                                                                                                                  Provide employees with
  Tools




                                               Build a high performance
                                               Build a high performance
                       retain critical
                        retain critical                                                   and individual
                                                                                          and individual         the tools and knowledge
                                                                                                                  the tools and knowledge
                                                      culture -- S2
                                                      culture S2
                         skills -- S1
                          skills S1                                                     performance -- S3
                                                                                        performance S3                 they need -- S4
                                                                                                                        they need S4




                                                                                                                                            88/104
89/104
90/104
91/104
Enterprise mission    % mission improvement (cost, time, quantity) attributed to
goals                    IT solutions and services
                        % planned IT benefits achieved
                        % IT strategies fully matched to enterprise strategies
Portfolio Analysis      % IT portfolio reviewed and disposed
and Management          % compliance to approved IT solution deployment
                        % reusability of core modules
Financial and           % total IT costs by major asset categories (hardware,
investment               software, personnel, facilities, management)
performance             IT budget as % of operational budget and compare to
                         industry average net present value, internal rate of return,
                         return of investment, return on assets percentages
                         (aggregate or by project)
IT resources          % databases that can be shared
usage                 % hardware/software with interoperability capabilities



                                                                                        92/104
Customer             % cooperative customer and IT applications design
partnership and      % joint development service level agreements
involvement          % customers attending IT investment meetings
                     % customers reporting full use of applications
                     % customers satisfied with IT application design
                     % customers satisfied with IT maintenance and
Customer              support
satisfaction
                     % of problems resolved within target time
                     % products launched on time taken to fulfill service
                      requests
                     degree to which IT solution support process
                      improvement plans
                     degree to which IT aids process analysis
Business
process support      degree to which IT solutions can adapt to new
                      requirements
                     incremental cost to transfer application to new
                      hardware platform
                                                                             93/104
 % procurement exception to architecture
                     standards
Architecture
                    N variations from standards detected by
standards            review and audit per year
compliance
                    % increase in systems using standard
                     architecture
                    % projects on time, on budget
                    % projects using standard methodology for
Project              systems analysis and design
performance
                    N backlog on enhancement and
                     maintenance requests
                    % system availability
Infrastructure      % applications availability
availability
                    on-line system response time
                                                             94/104
Workforce       N staff trained by skill area
competency      % staff training uses new technologies and
and              techniques
development     % staff professionally certified
                % IT budget devoted to training and staff
                 development
Employee        % employees satisfied with the existing
satisfaction     technical and operating environment to
                 deliver quality products or services
                % employees satisfied with training
                % employee turnover by function




                                                              95/104
96/104
97/104
http://www.balancedscorecard.org/

http://www.bscol.org

http://www.continuinged.uncc.edu/certificate/proc_mgmt/proc-
mgmt.htm

http://www.scip.org/

http://www.academyci.com/scip.html




                                                               98/104
http://www.casewise.com/index.php




                                    99/104
100/104
101/104
These books are Mandatory reading for anyone claiming to practice the discipline of
Balanced Scorecard




                                                                                      102/104
These papers and articles are reading for background, ideas, and guidance




        www.ejise.com




                                                                            103/104
104/104

More Related Content

What's hot

Change transition management.....
Change transition management.....Change transition management.....
Change transition management.....Moch Kurniawan
 
Guiding the Organizational Change Journey
Guiding the Organizational Change JourneyGuiding the Organizational Change Journey
Guiding the Organizational Change JourneyArturo J. Bencosme, PhD
 
Strategic management and strategic planning
Strategic management and strategic planningStrategic management and strategic planning
Strategic management and strategic planningOvidijus Jurevicius
 
Strategic planning powerpoint
Strategic planning powerpointStrategic planning powerpoint
Strategic planning powerpointrobdude9626
 
Introduction To Operational Excellence
Introduction To Operational ExcellenceIntroduction To Operational Excellence
Introduction To Operational ExcellenceAhmed Mansour
 
Master IT balanced scorecard (final).pptx
Master IT balanced scorecard (final).pptxMaster IT balanced scorecard (final).pptx
Master IT balanced scorecard (final).pptxGlen Alleman
 
Strategic Planning Workshop BY Francis Karugu, MSc, BComm, CPA
Strategic Planning Workshop BY Francis Karugu, MSc, BComm, CPAStrategic Planning Workshop BY Francis Karugu, MSc, BComm, CPA
Strategic Planning Workshop BY Francis Karugu, MSc, BComm, CPAFrancis Karugu
 
Business Focused IT Strategy
Business Focused IT StrategyBusiness Focused IT Strategy
Business Focused IT Strategymuhammadsjameel
 
IT Governance Presentation
IT Governance PresentationIT Governance Presentation
IT Governance Presentationjmcarden
 
Strategic Planning Toolkit - Framework, Best Practices and Templates
Strategic Planning Toolkit - Framework, Best Practices and TemplatesStrategic Planning Toolkit - Framework, Best Practices and Templates
Strategic Planning Toolkit - Framework, Best Practices and TemplatesAurelien Domont, MBA
 
Management Consulting Toolkit - Framework, Best Practices and Templates
Management Consulting Toolkit - Framework, Best Practices and TemplatesManagement Consulting Toolkit - Framework, Best Practices and Templates
Management Consulting Toolkit - Framework, Best Practices and TemplatesAurelien Domont, MBA
 
Performance Measurement
Performance MeasurementPerformance Measurement
Performance Measurementlleuciuc1
 
Intro to Key Performance Indicators
Intro to Key Performance IndicatorsIntro to Key Performance Indicators
Intro to Key Performance IndicatorsKlipfolio
 
The Transformation Office - A new organisational capability for the digital e...
The Transformation Office - A new organisational capability for the digital e...The Transformation Office - A new organisational capability for the digital e...
The Transformation Office - A new organisational capability for the digital e...Rafael Lemaitre
 
Basic Concept of Strategy & Strategic Management
Basic Concept of Strategy & Strategic Management Basic Concept of Strategy & Strategic Management
Basic Concept of Strategy & Strategic Management Djadja Sardjana
 
Balanace score card ppt
Balanace score card pptBalanace score card ppt
Balanace score card pptAravind Reddy
 

What's hot (20)

Change transition management.....
Change transition management.....Change transition management.....
Change transition management.....
 
Guiding the Organizational Change Journey
Guiding the Organizational Change JourneyGuiding the Organizational Change Journey
Guiding the Organizational Change Journey
 
Strategic management and strategic planning
Strategic management and strategic planningStrategic management and strategic planning
Strategic management and strategic planning
 
Strategic planning powerpoint
Strategic planning powerpointStrategic planning powerpoint
Strategic planning powerpoint
 
Introduction To Operational Excellence
Introduction To Operational ExcellenceIntroduction To Operational Excellence
Introduction To Operational Excellence
 
Master IT balanced scorecard (final).pptx
Master IT balanced scorecard (final).pptxMaster IT balanced scorecard (final).pptx
Master IT balanced scorecard (final).pptx
 
Strategic Planning Workshop BY Francis Karugu, MSc, BComm, CPA
Strategic Planning Workshop BY Francis Karugu, MSc, BComm, CPAStrategic Planning Workshop BY Francis Karugu, MSc, BComm, CPA
Strategic Planning Workshop BY Francis Karugu, MSc, BComm, CPA
 
Business Focused IT Strategy
Business Focused IT StrategyBusiness Focused IT Strategy
Business Focused IT Strategy
 
Strategic Planning & Management
Strategic Planning & ManagementStrategic Planning & Management
Strategic Planning & Management
 
Change Management
Change ManagementChange Management
Change Management
 
Strategic planning
Strategic planningStrategic planning
Strategic planning
 
IT Governance Presentation
IT Governance PresentationIT Governance Presentation
IT Governance Presentation
 
Strategic Planning Toolkit - Framework, Best Practices and Templates
Strategic Planning Toolkit - Framework, Best Practices and TemplatesStrategic Planning Toolkit - Framework, Best Practices and Templates
Strategic Planning Toolkit - Framework, Best Practices and Templates
 
Management Consulting Toolkit - Framework, Best Practices and Templates
Management Consulting Toolkit - Framework, Best Practices and TemplatesManagement Consulting Toolkit - Framework, Best Practices and Templates
Management Consulting Toolkit - Framework, Best Practices and Templates
 
Performance Measurement
Performance MeasurementPerformance Measurement
Performance Measurement
 
Intro to Key Performance Indicators
Intro to Key Performance IndicatorsIntro to Key Performance Indicators
Intro to Key Performance Indicators
 
The Transformation Office - A new organisational capability for the digital e...
The Transformation Office - A new organisational capability for the digital e...The Transformation Office - A new organisational capability for the digital e...
The Transformation Office - A new organisational capability for the digital e...
 
Basic Concept of Strategy & Strategic Management
Basic Concept of Strategy & Strategic Management Basic Concept of Strategy & Strategic Management
Basic Concept of Strategy & Strategic Management
 
IT Strategy
IT StrategyIT Strategy
IT Strategy
 
Balanace score card ppt
Balanace score card pptBalanace score card ppt
Balanace score card ppt
 

Viewers also liked

Five immutable principles
Five immutable principlesFive immutable principles
Five immutable principlesGlen Alleman
 
Earned Value Management Meets Big Data
Earned Value Management Meets Big DataEarned Value Management Meets Big Data
Earned Value Management Meets Big DataGlen Alleman
 
Managing in the presence of uncertainty
Managing in the presence of uncertaintyManaging in the presence of uncertainty
Managing in the presence of uncertaintyGlen Alleman
 
Big data meets evm (submitted)
Big data meets evm (submitted)Big data meets evm (submitted)
Big data meets evm (submitted)Glen Alleman
 
Agile in the government
Agile in the government Agile in the government
Agile in the government Glen Alleman
 
Measurement News Webinar
Measurement News WebinarMeasurement News Webinar
Measurement News WebinarGlen Alleman
 
Agile at scale resources
Agile at scale resourcesAgile at scale resources
Agile at scale resourcesGlen Alleman
 
Cpm 200 C technical performance measures ipm2016
Cpm 200 C technical performance measures ipm2016Cpm 200 C technical performance measures ipm2016
Cpm 200 C technical performance measures ipm2016Glen Alleman
 
Paradigm of agile project management
Paradigm of agile project managementParadigm of agile project management
Paradigm of agile project managementGlen Alleman
 
Building the perfect schedule (v6)
Building the perfect schedule (v6)Building the perfect schedule (v6)
Building the perfect schedule (v6)Glen Alleman
 
Principles and Practices of Performance-Based Project Management®
Principles and Practices of Performance-Based Project Management®Principles and Practices of Performance-Based Project Management®
Principles and Practices of Performance-Based Project Management®Glen Alleman
 
Strategic Performance Management System
Strategic Performance Management SystemStrategic Performance Management System
Strategic Performance Management SystemDaisy Punzalan Bragais
 
Concepts of cutover planning and management
Concepts of cutover planning and managementConcepts of cutover planning and management
Concepts of cutover planning and managementSanjay Choubey
 
Competing On Resources Balance Scorecard
Competing On Resources  Balance ScorecardCompeting On Resources  Balance Scorecard
Competing On Resources Balance Scorecardvinod63
 
Mastergrad final version
Mastergrad final versionMastergrad final version
Mastergrad final versionMarita Myhre
 
Business Process Management - Building The BPM Balanced Scorecard
Business Process Management - Building The BPM Balanced ScorecardBusiness Process Management - Building The BPM Balanced Scorecard
Business Process Management - Building The BPM Balanced ScorecardSteve Towers, CEO and CPP Champion
 

Viewers also liked (20)

Five immutable principles
Five immutable principlesFive immutable principles
Five immutable principles
 
Earned Value Management Meets Big Data
Earned Value Management Meets Big DataEarned Value Management Meets Big Data
Earned Value Management Meets Big Data
 
Managing in the presence of uncertainty
Managing in the presence of uncertaintyManaging in the presence of uncertainty
Managing in the presence of uncertainty
 
Big data meets evm (submitted)
Big data meets evm (submitted)Big data meets evm (submitted)
Big data meets evm (submitted)
 
Agile in the government
Agile in the government Agile in the government
Agile in the government
 
Measurement News Webinar
Measurement News WebinarMeasurement News Webinar
Measurement News Webinar
 
Ev+agile=success
Ev+agile=successEv+agile=success
Ev+agile=success
 
Agile at scale resources
Agile at scale resourcesAgile at scale resources
Agile at scale resources
 
Cpm 200 C technical performance measures ipm2016
Cpm 200 C technical performance measures ipm2016Cpm 200 C technical performance measures ipm2016
Cpm 200 C technical performance measures ipm2016
 
Paradigm of agile project management
Paradigm of agile project managementParadigm of agile project management
Paradigm of agile project management
 
Building the perfect schedule (v6)
Building the perfect schedule (v6)Building the perfect schedule (v6)
Building the perfect schedule (v6)
 
Principles and Practices of Performance-Based Project Management®
Principles and Practices of Performance-Based Project Management®Principles and Practices of Performance-Based Project Management®
Principles and Practices of Performance-Based Project Management®
 
Strategic Performance Management System
Strategic Performance Management SystemStrategic Performance Management System
Strategic Performance Management System
 
Control systems
Control systemsControl systems
Control systems
 
Concepts of cutover planning and management
Concepts of cutover planning and managementConcepts of cutover planning and management
Concepts of cutover planning and management
 
Competing On Resources Balance Scorecard
Competing On Resources  Balance ScorecardCompeting On Resources  Balance Scorecard
Competing On Resources Balance Scorecard
 
Strategy map 16
Strategy map 16Strategy map 16
Strategy map 16
 
Mastergrad final version
Mastergrad final versionMastergrad final version
Mastergrad final version
 
Business Process Management - Building The BPM Balanced Scorecard
Business Process Management - Building The BPM Balanced ScorecardBusiness Process Management - Building The BPM Balanced Scorecard
Business Process Management - Building The BPM Balanced Scorecard
 
Introduction to BPM
Introduction to BPMIntroduction to BPM
Introduction to BPM
 

Similar to Balanced Scorecard Phases: From Discovery to Strategy Focus

Introduction to Balanced Scorecard - Large Group Orientation
Introduction to Balanced Scorecard - Large Group OrientationIntroduction to Balanced Scorecard - Large Group Orientation
Introduction to Balanced Scorecard - Large Group OrientationGlen Alleman
 
Ariba Knowledge Nuggets: Supplier Performance Management Part 2
Ariba Knowledge Nuggets: Supplier Performance Management Part 2Ariba Knowledge Nuggets: Supplier Performance Management Part 2
Ariba Knowledge Nuggets: Supplier Performance Management Part 2SAP Ariba
 
Neshs Webinar 12 17 2009 Presentation Handout
Neshs Webinar 12 17 2009 Presentation HandoutNeshs Webinar 12 17 2009 Presentation Handout
Neshs Webinar 12 17 2009 Presentation HandoutAmy MacNulty
 
VAS 3.7 Values Alignment Strategy
VAS 3.7 Values Alignment StrategyVAS 3.7 Values Alignment Strategy
VAS 3.7 Values Alignment StrategyThomasBorie
 
Balanced scorecard overview slides
Balanced scorecard overview slidesBalanced scorecard overview slides
Balanced scorecard overview slidesTools4management.com
 
Kuliah umum strategic management Unhas , 20 April 2018
Kuliah umum strategic management Unhas , 20 April 2018Kuliah umum strategic management Unhas , 20 April 2018
Kuliah umum strategic management Unhas , 20 April 2018Sapri Pamulu, Ph.D
 
Introduction to strategic management
Introduction to strategic managementIntroduction to strategic management
Introduction to strategic managementBibhuti Kumar
 
Apg Capabilities V3
Apg Capabilities V3Apg Capabilities V3
Apg Capabilities V3MrktPwrPnts
 
Overview of Strategy Execution Management - Vision without Execution - The Ha...
Overview of Strategy Execution Management - Vision without Execution - The Ha...Overview of Strategy Execution Management - Vision without Execution - The Ha...
Overview of Strategy Execution Management - Vision without Execution - The Ha...Tom Willingham
 
Balanced Scorecard Framework.pdf
Balanced Scorecard Framework.pdfBalanced Scorecard Framework.pdf
Balanced Scorecard Framework.pdfcatalystbyphiedge1
 
Balanced scorecard
Balanced scorecardBalanced scorecard
Balanced scorecardZaini Ithnin
 
Bt27 mar2012a versluis
Bt27 mar2012a versluisBt27 mar2012a versluis
Bt27 mar2012a versluisHaniza Jasmani
 
Building a Strategic Framework
Building a Strategic FrameworkBuilding a Strategic Framework
Building a Strategic FrameworkHj Arriffin Mansor
 
Strategic Planning Business Service
Strategic Planning Business ServiceStrategic Planning Business Service
Strategic Planning Business ServiceAnthony Maceroli
 

Similar to Balanced Scorecard Phases: From Discovery to Strategy Focus (20)

Strategy deployment
Strategy deploymentStrategy deployment
Strategy deployment
 
ROI training 98
ROI training 98ROI training 98
ROI training 98
 
Introduction to Balanced Scorecard - Large Group Orientation
Introduction to Balanced Scorecard - Large Group OrientationIntroduction to Balanced Scorecard - Large Group Orientation
Introduction to Balanced Scorecard - Large Group Orientation
 
Ariba Knowledge Nuggets: Supplier Performance Management Part 2
Ariba Knowledge Nuggets: Supplier Performance Management Part 2Ariba Knowledge Nuggets: Supplier Performance Management Part 2
Ariba Knowledge Nuggets: Supplier Performance Management Part 2
 
Balanced score card
Balanced score cardBalanced score card
Balanced score card
 
Balanced score card
Balanced score cardBalanced score card
Balanced score card
 
Neshs Webinar 12 17 2009 Presentation Handout
Neshs Webinar 12 17 2009 Presentation HandoutNeshs Webinar 12 17 2009 Presentation Handout
Neshs Webinar 12 17 2009 Presentation Handout
 
VAS 3.7 Values Alignment Strategy
VAS 3.7 Values Alignment StrategyVAS 3.7 Values Alignment Strategy
VAS 3.7 Values Alignment Strategy
 
Balanced scorecard overview slides
Balanced scorecard overview slidesBalanced scorecard overview slides
Balanced scorecard overview slides
 
Kuliah umum strategic management Unhas , 20 April 2018
Kuliah umum strategic management Unhas , 20 April 2018Kuliah umum strategic management Unhas , 20 April 2018
Kuliah umum strategic management Unhas , 20 April 2018
 
Introduction to strategic management
Introduction to strategic managementIntroduction to strategic management
Introduction to strategic management
 
Bp chap1
Bp chap1Bp chap1
Bp chap1
 
Apg Capabilities V3
Apg Capabilities V3Apg Capabilities V3
Apg Capabilities V3
 
Overview of Strategy Execution Management - Vision without Execution - The Ha...
Overview of Strategy Execution Management - Vision without Execution - The Ha...Overview of Strategy Execution Management - Vision without Execution - The Ha...
Overview of Strategy Execution Management - Vision without Execution - The Ha...
 
Balanced Scorecard Framework.pdf
Balanced Scorecard Framework.pdfBalanced Scorecard Framework.pdf
Balanced Scorecard Framework.pdf
 
ICANS 2011
ICANS 2011ICANS 2011
ICANS 2011
 
Balanced scorecard
Balanced scorecardBalanced scorecard
Balanced scorecard
 
Bt27 mar2012a versluis
Bt27 mar2012a versluisBt27 mar2012a versluis
Bt27 mar2012a versluis
 
Building a Strategic Framework
Building a Strategic FrameworkBuilding a Strategic Framework
Building a Strategic Framework
 
Strategic Planning Business Service
Strategic Planning Business ServiceStrategic Planning Business Service
Strategic Planning Business Service
 

More from Glen Alleman

Managing risk with deliverables planning
Managing risk with deliverables planningManaging risk with deliverables planning
Managing risk with deliverables planningGlen Alleman
 
A Gentle Introduction to the IMP/IMS
A Gentle Introduction to the IMP/IMSA Gentle Introduction to the IMP/IMS
A Gentle Introduction to the IMP/IMSGlen Alleman
 
Increasing the Probability of Project Success
Increasing the Probability of Project SuccessIncreasing the Probability of Project Success
Increasing the Probability of Project SuccessGlen Alleman
 
Process Flow and Narrative for Agile+PPM
Process Flow and Narrative for Agile+PPMProcess Flow and Narrative for Agile+PPM
Process Flow and Narrative for Agile+PPMGlen Alleman
 
Practices of risk management
Practices of risk managementPractices of risk management
Practices of risk managementGlen Alleman
 
Principles of Risk Management
Principles of Risk ManagementPrinciples of Risk Management
Principles of Risk ManagementGlen Alleman
 
Deliverables Based Planning, PMBOK® and 5 Immutable Principles of Project Suc...
Deliverables Based Planning, PMBOK® and 5 Immutable Principles of Project Suc...Deliverables Based Planning, PMBOK® and 5 Immutable Principles of Project Suc...
Deliverables Based Planning, PMBOK® and 5 Immutable Principles of Project Suc...Glen Alleman
 
From Principles to Strategies for Systems Engineering
From Principles to Strategies for Systems EngineeringFrom Principles to Strategies for Systems Engineering
From Principles to Strategies for Systems EngineeringGlen Alleman
 
NAVAIR Integrated Master Schedule Guide guide
NAVAIR Integrated Master Schedule Guide guideNAVAIR Integrated Master Schedule Guide guide
NAVAIR Integrated Master Schedule Guide guideGlen Alleman
 
Building a Credible Performance Measurement Baseline
Building a Credible Performance Measurement BaselineBuilding a Credible Performance Measurement Baseline
Building a Credible Performance Measurement BaselineGlen Alleman
 
Integrated master plan methodology (v2)
Integrated master plan methodology (v2)Integrated master plan methodology (v2)
Integrated master plan methodology (v2)Glen Alleman
 
IMP / IMS Step by Step
IMP / IMS Step by StepIMP / IMS Step by Step
IMP / IMS Step by StepGlen Alleman
 
DHS - Using functions points to estimate agile development programs (v2)
DHS - Using functions points to estimate agile development programs (v2)DHS - Using functions points to estimate agile development programs (v2)
DHS - Using functions points to estimate agile development programs (v2)Glen Alleman
 
Making the impossible possible
Making the impossible possibleMaking the impossible possible
Making the impossible possibleGlen Alleman
 
Heliotropic Abundance
Heliotropic AbundanceHeliotropic Abundance
Heliotropic AbundanceGlen Alleman
 
Capabilities based planning
Capabilities based planningCapabilities based planning
Capabilities based planningGlen Alleman
 
Process Flow and Narrative for Agile
Process Flow and Narrative for AgileProcess Flow and Narrative for Agile
Process Flow and Narrative for AgileGlen Alleman
 
Building the Performance Measurement Baseline
Building the Performance Measurement BaselineBuilding the Performance Measurement Baseline
Building the Performance Measurement BaselineGlen Alleman
 
Program Management Office Lean Software Development and Six Sigma
Program Management Office Lean Software Development and Six SigmaProgram Management Office Lean Software Development and Six Sigma
Program Management Office Lean Software Development and Six SigmaGlen Alleman
 
Policy and Procedure Rollout
Policy and Procedure RolloutPolicy and Procedure Rollout
Policy and Procedure RolloutGlen Alleman
 

More from Glen Alleman (20)

Managing risk with deliverables planning
Managing risk with deliverables planningManaging risk with deliverables planning
Managing risk with deliverables planning
 
A Gentle Introduction to the IMP/IMS
A Gentle Introduction to the IMP/IMSA Gentle Introduction to the IMP/IMS
A Gentle Introduction to the IMP/IMS
 
Increasing the Probability of Project Success
Increasing the Probability of Project SuccessIncreasing the Probability of Project Success
Increasing the Probability of Project Success
 
Process Flow and Narrative for Agile+PPM
Process Flow and Narrative for Agile+PPMProcess Flow and Narrative for Agile+PPM
Process Flow and Narrative for Agile+PPM
 
Practices of risk management
Practices of risk managementPractices of risk management
Practices of risk management
 
Principles of Risk Management
Principles of Risk ManagementPrinciples of Risk Management
Principles of Risk Management
 
Deliverables Based Planning, PMBOK® and 5 Immutable Principles of Project Suc...
Deliverables Based Planning, PMBOK® and 5 Immutable Principles of Project Suc...Deliverables Based Planning, PMBOK® and 5 Immutable Principles of Project Suc...
Deliverables Based Planning, PMBOK® and 5 Immutable Principles of Project Suc...
 
From Principles to Strategies for Systems Engineering
From Principles to Strategies for Systems EngineeringFrom Principles to Strategies for Systems Engineering
From Principles to Strategies for Systems Engineering
 
NAVAIR Integrated Master Schedule Guide guide
NAVAIR Integrated Master Schedule Guide guideNAVAIR Integrated Master Schedule Guide guide
NAVAIR Integrated Master Schedule Guide guide
 
Building a Credible Performance Measurement Baseline
Building a Credible Performance Measurement BaselineBuilding a Credible Performance Measurement Baseline
Building a Credible Performance Measurement Baseline
 
Integrated master plan methodology (v2)
Integrated master plan methodology (v2)Integrated master plan methodology (v2)
Integrated master plan methodology (v2)
 
IMP / IMS Step by Step
IMP / IMS Step by StepIMP / IMS Step by Step
IMP / IMS Step by Step
 
DHS - Using functions points to estimate agile development programs (v2)
DHS - Using functions points to estimate agile development programs (v2)DHS - Using functions points to estimate agile development programs (v2)
DHS - Using functions points to estimate agile development programs (v2)
 
Making the impossible possible
Making the impossible possibleMaking the impossible possible
Making the impossible possible
 
Heliotropic Abundance
Heliotropic AbundanceHeliotropic Abundance
Heliotropic Abundance
 
Capabilities based planning
Capabilities based planningCapabilities based planning
Capabilities based planning
 
Process Flow and Narrative for Agile
Process Flow and Narrative for AgileProcess Flow and Narrative for Agile
Process Flow and Narrative for Agile
 
Building the Performance Measurement Baseline
Building the Performance Measurement BaselineBuilding the Performance Measurement Baseline
Building the Performance Measurement Baseline
 
Program Management Office Lean Software Development and Six Sigma
Program Management Office Lean Software Development and Six SigmaProgram Management Office Lean Software Development and Six Sigma
Program Management Office Lean Software Development and Six Sigma
 
Policy and Procedure Rollout
Policy and Procedure RolloutPolicy and Procedure Rollout
Policy and Procedure Rollout
 

Recently uploaded

Introducing the Analogic framework for business planning applications
Introducing the Analogic framework for business planning applicationsIntroducing the Analogic framework for business planning applications
Introducing the Analogic framework for business planning applicationsKnowledgeSeed
 
Jewish Resources in the Family Resource Centre
Jewish Resources in the Family Resource CentreJewish Resources in the Family Resource Centre
Jewish Resources in the Family Resource CentreNZSG
 
Technical Leaders - Working with the Management Team
Technical Leaders - Working with the Management TeamTechnical Leaders - Working with the Management Team
Technical Leaders - Working with the Management TeamArik Fletcher
 
Darshan Hiranandani [News About Next CEO].pdf
Darshan Hiranandani [News About Next CEO].pdfDarshan Hiranandani [News About Next CEO].pdf
Darshan Hiranandani [News About Next CEO].pdfShashank Mehta
 
Appkodes Tinder Clone Script with Customisable Solutions.pptx
Appkodes Tinder Clone Script with Customisable Solutions.pptxAppkodes Tinder Clone Script with Customisable Solutions.pptx
Appkodes Tinder Clone Script with Customisable Solutions.pptxappkodes
 
WSMM Media and Entertainment Feb_March_Final.pdf
WSMM Media and Entertainment Feb_March_Final.pdfWSMM Media and Entertainment Feb_March_Final.pdf
WSMM Media and Entertainment Feb_March_Final.pdfJamesConcepcion7
 
Cyber Security Training in Office Environment
Cyber Security Training in Office EnvironmentCyber Security Training in Office Environment
Cyber Security Training in Office Environmentelijahj01012
 
Driving Business Impact for PMs with Jon Harmer
Driving Business Impact for PMs with Jon HarmerDriving Business Impact for PMs with Jon Harmer
Driving Business Impact for PMs with Jon HarmerAggregage
 
Effective Strategies for Maximizing Your Profit When Selling Gold Jewelry
Effective Strategies for Maximizing Your Profit When Selling Gold JewelryEffective Strategies for Maximizing Your Profit When Selling Gold Jewelry
Effective Strategies for Maximizing Your Profit When Selling Gold JewelryWhittensFineJewelry1
 
Supercharge Your eCommerce Stores-acowebs
Supercharge Your eCommerce Stores-acowebsSupercharge Your eCommerce Stores-acowebs
Supercharge Your eCommerce Stores-acowebsGOKUL JS
 
Horngren’s Financial & Managerial Accounting, 7th edition by Miller-Nobles so...
Horngren’s Financial & Managerial Accounting, 7th edition by Miller-Nobles so...Horngren’s Financial & Managerial Accounting, 7th edition by Miller-Nobles so...
Horngren’s Financial & Managerial Accounting, 7th edition by Miller-Nobles so...ssuserf63bd7
 
trending-flavors-and-ingredients-in-salty-snacks-us-2024_Redacted-V2.pdf
trending-flavors-and-ingredients-in-salty-snacks-us-2024_Redacted-V2.pdftrending-flavors-and-ingredients-in-salty-snacks-us-2024_Redacted-V2.pdf
trending-flavors-and-ingredients-in-salty-snacks-us-2024_Redacted-V2.pdfMintel Group
 
BAILMENT & PLEDGE business law notes.pptx
BAILMENT & PLEDGE business law notes.pptxBAILMENT & PLEDGE business law notes.pptx
BAILMENT & PLEDGE business law notes.pptxran17april2001
 
Cybersecurity Awareness Training Presentation v2024.03
Cybersecurity Awareness Training Presentation v2024.03Cybersecurity Awareness Training Presentation v2024.03
Cybersecurity Awareness Training Presentation v2024.03DallasHaselhorst
 
20220816-EthicsGrade_Scorecard-JP_Morgan_Chase-Q2-63_57.pdf
20220816-EthicsGrade_Scorecard-JP_Morgan_Chase-Q2-63_57.pdf20220816-EthicsGrade_Scorecard-JP_Morgan_Chase-Q2-63_57.pdf
20220816-EthicsGrade_Scorecard-JP_Morgan_Chase-Q2-63_57.pdfChris Skinner
 
Unveiling the Soundscape Music for Psychedelic Experiences
Unveiling the Soundscape Music for Psychedelic ExperiencesUnveiling the Soundscape Music for Psychedelic Experiences
Unveiling the Soundscape Music for Psychedelic ExperiencesDoe Paoro
 
Healthcare Feb. & Mar. Healthcare Newsletter
Healthcare Feb. & Mar. Healthcare NewsletterHealthcare Feb. & Mar. Healthcare Newsletter
Healthcare Feb. & Mar. Healthcare NewsletterJamesConcepcion7
 
WSMM Technology February.March Newsletter_vF.pdf
WSMM Technology February.March Newsletter_vF.pdfWSMM Technology February.March Newsletter_vF.pdf
WSMM Technology February.March Newsletter_vF.pdfJamesConcepcion7
 

Recently uploaded (20)

Introducing the Analogic framework for business planning applications
Introducing the Analogic framework for business planning applicationsIntroducing the Analogic framework for business planning applications
Introducing the Analogic framework for business planning applications
 
Jewish Resources in the Family Resource Centre
Jewish Resources in the Family Resource CentreJewish Resources in the Family Resource Centre
Jewish Resources in the Family Resource Centre
 
Technical Leaders - Working with the Management Team
Technical Leaders - Working with the Management TeamTechnical Leaders - Working with the Management Team
Technical Leaders - Working with the Management Team
 
WAM Corporate Presentation April 12 2024.pdf
WAM Corporate Presentation April 12 2024.pdfWAM Corporate Presentation April 12 2024.pdf
WAM Corporate Presentation April 12 2024.pdf
 
Darshan Hiranandani [News About Next CEO].pdf
Darshan Hiranandani [News About Next CEO].pdfDarshan Hiranandani [News About Next CEO].pdf
Darshan Hiranandani [News About Next CEO].pdf
 
Appkodes Tinder Clone Script with Customisable Solutions.pptx
Appkodes Tinder Clone Script with Customisable Solutions.pptxAppkodes Tinder Clone Script with Customisable Solutions.pptx
Appkodes Tinder Clone Script with Customisable Solutions.pptx
 
WSMM Media and Entertainment Feb_March_Final.pdf
WSMM Media and Entertainment Feb_March_Final.pdfWSMM Media and Entertainment Feb_March_Final.pdf
WSMM Media and Entertainment Feb_March_Final.pdf
 
Cyber Security Training in Office Environment
Cyber Security Training in Office EnvironmentCyber Security Training in Office Environment
Cyber Security Training in Office Environment
 
Driving Business Impact for PMs with Jon Harmer
Driving Business Impact for PMs with Jon HarmerDriving Business Impact for PMs with Jon Harmer
Driving Business Impact for PMs with Jon Harmer
 
Effective Strategies for Maximizing Your Profit When Selling Gold Jewelry
Effective Strategies for Maximizing Your Profit When Selling Gold JewelryEffective Strategies for Maximizing Your Profit When Selling Gold Jewelry
Effective Strategies for Maximizing Your Profit When Selling Gold Jewelry
 
Supercharge Your eCommerce Stores-acowebs
Supercharge Your eCommerce Stores-acowebsSupercharge Your eCommerce Stores-acowebs
Supercharge Your eCommerce Stores-acowebs
 
Horngren’s Financial & Managerial Accounting, 7th edition by Miller-Nobles so...
Horngren’s Financial & Managerial Accounting, 7th edition by Miller-Nobles so...Horngren’s Financial & Managerial Accounting, 7th edition by Miller-Nobles so...
Horngren’s Financial & Managerial Accounting, 7th edition by Miller-Nobles so...
 
trending-flavors-and-ingredients-in-salty-snacks-us-2024_Redacted-V2.pdf
trending-flavors-and-ingredients-in-salty-snacks-us-2024_Redacted-V2.pdftrending-flavors-and-ingredients-in-salty-snacks-us-2024_Redacted-V2.pdf
trending-flavors-and-ingredients-in-salty-snacks-us-2024_Redacted-V2.pdf
 
BAILMENT & PLEDGE business law notes.pptx
BAILMENT & PLEDGE business law notes.pptxBAILMENT & PLEDGE business law notes.pptx
BAILMENT & PLEDGE business law notes.pptx
 
The Bizz Quiz-E-Summit-E-Cell-IITPatna.pptx
The Bizz Quiz-E-Summit-E-Cell-IITPatna.pptxThe Bizz Quiz-E-Summit-E-Cell-IITPatna.pptx
The Bizz Quiz-E-Summit-E-Cell-IITPatna.pptx
 
Cybersecurity Awareness Training Presentation v2024.03
Cybersecurity Awareness Training Presentation v2024.03Cybersecurity Awareness Training Presentation v2024.03
Cybersecurity Awareness Training Presentation v2024.03
 
20220816-EthicsGrade_Scorecard-JP_Morgan_Chase-Q2-63_57.pdf
20220816-EthicsGrade_Scorecard-JP_Morgan_Chase-Q2-63_57.pdf20220816-EthicsGrade_Scorecard-JP_Morgan_Chase-Q2-63_57.pdf
20220816-EthicsGrade_Scorecard-JP_Morgan_Chase-Q2-63_57.pdf
 
Unveiling the Soundscape Music for Psychedelic Experiences
Unveiling the Soundscape Music for Psychedelic ExperiencesUnveiling the Soundscape Music for Psychedelic Experiences
Unveiling the Soundscape Music for Psychedelic Experiences
 
Healthcare Feb. & Mar. Healthcare Newsletter
Healthcare Feb. & Mar. Healthcare NewsletterHealthcare Feb. & Mar. Healthcare Newsletter
Healthcare Feb. & Mar. Healthcare Newsletter
 
WSMM Technology February.March Newsletter_vF.pdf
WSMM Technology February.March Newsletter_vF.pdfWSMM Technology February.March Newsletter_vF.pdf
WSMM Technology February.March Newsletter_vF.pdf
 

Balanced Scorecard Phases: From Discovery to Strategy Focus

  • 2. Background, Purpose, And Position  Practice Themes  The Balanced Scorecard Offering  Thoughts On Strategy  Strategy  Planning  Beneficial Outcomes  Measurement  Sample Balanced Scorecards  BSC Training Resources  References 2/104
  • 4. Positioning 4/104
  • 5. Positioning BSC has many confusing and sometimes conflicting definitions IT Performance Management applies these concepts to the strategic, tactical and operational aspects of IT 5/104
  • 7. Success starts with the management of intangible assets 7/104
  • 8. Drivers † “The Balanced Scorecard: To Adopt or not to adopt?” Kevin Hendricks, Larry Menor and Christine Wiedman, Ivey Business Journal, Nov/Dec 2004 8/104
  • 9. Drivers Balanced Scorecard would more likely benefit firms that followed a Prospector or Analyzer strategy, and likely not benefit firms that followed a Defender or Reactor strategy. † “The Balanced Scorecard: To Adopt or not to adopt?” Kevin Hendricks, Larry Menor and Christine Wiedman, Ivey Business Journal, Nov/Dec 2004 9/104
  • 10. Drivers 10/104
  • 11. Drivers “There is no such thing as a free lunch,” — Milton Friedmann † “New Math for the New Economy,” Baruch Lev, Fast Company, 31, January, 2000 11/104
  • 12. Drivers Identify the needs of the IT department that focus on … 12/104
  • 14. Approach Balanced Scorecard Is 1 Of 4 Needed Capabilities For Success Business and Technology Governance Competitive Advantage Real Options Enterprise Sustained Capabilities Balanced Based Program & Based Scorecard Portfolio Project Planning Management Management Enterprise Class Tools and Work Processes  Readiness Assessment  Mobilization  Alignment  Sustainment 14/104
  • 15. Approach Mission and Vision are starting points for developing a Balanced Scorecard from the “top down.” Without a Mission and Vision, the underlying performance measures have no foundation on which to rest. Balanced Scorecard Mission Why We Exist Values Guiding Principles Vision Picture of the Future Strategy Differentiating activities 15/104
  • 16. Approach Identifying the strategic initiatives that support the organization strategies is key beneficial outcome of deploying a Balanced Scorecard in IT General Mission What do we do? Strategic Themes Why is it important? Desired Outcomes What results do we want? How will we know when we’ve Metrics achieved these results? What specific actions do we Strategic believe will lead to these results? Initiatives Connecting specific actions with the strategy of the firm is the role of a Balanced Scorecard 16/104
  • 17. Approach The four phases of the Balanced Scorecard deployment are broad and general purpose, focused on increasing maturity. The details of the deployment must be developed in order to achieve success Readiness Mobilization Alignment Sustainment  Assess readiness  Mobilize change  Translate the  Motivate the staff for BSC initiative through executive strategy  Govern the  Identify gaps & leadership  Align the organization closure plans organization  Conduct  Achieve  Define and clarify  Focus the staff Readiness commitment from the strategy  Align Assessments the top connections accountability and • Cultural  Build the  Establish long rewards • Operational executive team term targets  Develop human • Data  Build the case for  Communicate the capital • Governance change strategy  Re–define  Identify and close  Identify initial  Connect measures governance gaps KPIs, CSFs, Goals with strategies  Get results  Prepare for and Initiatives deployment  Identify target strategies Discovery Missionary Change Agent Strategy Focused 17/104
  • 18. Approach Readiness Mobilization Alignment Sustainment  Translate the strategy  Assess readiness for BSC initiative  Mobilize change through executive  Align the organization  Motivate the staff  Govern the The four phases of the  Identify gaps & leadership organization BSC deployment are a closure plans sequence that builds  Conduct Readiness  Achieve commitment  Define and clarify the  Focus the staff Assessments from the top strategy connections  Align accountability the increasing maturity • Cultural • Operational  Build the executive team  Establish long term targets  and rewards Develop human of the scorecard. • Data  Build the case for  Communicate the capital • Governance change strategy  Re–define  Identify and close  Identify initial KPIs,  Connect measures governance gaps CSFs, Goals and with strategies  Get results  Prepare for Initiatives deployment  Identify target strategies Discovery Missionary Change Agent Strategy Focused With the scorecard in place, the Capabilities needed to fulfill the strategy, the options trade–offs for existing and future projects, and the enterprise tools to manage this portfolio. Business and Technology Governance Competitive Advantage Real Options Enterprise Sustained Capabilities Balanced Based Program & Based Scorecard Portfolio Project Planning Management Management Enterprise Class Tools and Work Processes 18/104
  • 19. Approach † Alignment: Using Balanced Scorecard to Create Company Synergies, Norton and Kaplan, Harvard Business School Publishing Company, 2006 19/104
  • 20. Approach Clarify mission & Mission Vision statement Vision Develop Strategic Goals Strategic Goals Balanced Scorecard Derive Strategy Map Sub–Goals Sub–Goals Stakeholder Perspective Service Attributes Relationships Image Recognition Stakeholder Application Quality Time to Delivery System Capabilities of Value Relations Internal Processes Perspective Map Sub-Goals to Operations Management Stakeholder Management Innovation Processes Regulatory Processes each quadrant of the Learnings & Growth Perspective Human Capital Information Capital Balanced Score Card Culture Organizational Capital Leadership Alignment Teamwork Budget Perspective Project Budget Resource Performance Management Management GQ(I)M KPI’s, Targets, Goal Question For each BSC Quadrant CSF’s for each Indicator Objective Measure Apply GQ(I)M to: Indicators – Identify measurement areas Trouble Reports – Develop measurement goals – Pose relevant questions Module Derived from – Postulate indicators Performance Data “Developing Enterprise–Wide Measures for Tracking – Identify data elements Elements Performance,” Software Engineering Institute 20/104
  • 21. Approach Focusing on Goals, the Success Criteria separates the measures of success from the task progress indicators. This separation distinguishes physical progress from business value – both are needed, but they are not the same. Success Goal Criteria Strategy to Success Indicators accomplish the goal % 1 2 3 4 1 2 3 4 Reporting Periods Analysis Indicators 100 80 60 Tasks to Accomplish 40 20 goal Tasks Progress Indicators Task 1 Task 2 100 Actual Test Cases Complete 80 Task 3 60 • 40 Planned Functions • 20 Task n Reporting Periods Derived from “Developing Enterprise–Wide Measures for Tracking Performance,” Software Engineering Institute” 21/104
  • 22. Approach GOAL(s) Question 1 Question 2 ••• Question n SLOC Staff-hours Trouble Reports Milestone Dates Derived from “Developing Enterprise–Wide Measures for Tracking Performance,” Software Engineering Institute`` 22/104
  • 23. Approach IT Development Balanced Scorecard Business IT Balanced Balanced Scorecard Scorecard IT Operations Balanced Scorecard 23/104
  • 24. Approach 24/104
  • 25. Themes † Michael E. Nagel, Vice President, Balanced Scorecard Collaborative 25/104
  • 27. Themes If executives are having a normal meeting and talking about strategy, but instead focusing on tactics – then they’re not fulfilling their roles as leaders of their respective organizations 27/104
  • 30. Themes † Advice from Bruce W. Harber, CEO North Shore Health Board, Vancouver, B.C. 30/104
  • 31. Positioning 31/104
  • 32. Positioning From, Functions of an Executive, Chester Barnard, 1938. Barnard laid the foundations of management theory. Bernard is widely credited with having originated the “Systems” approach to the study of organizations. He recognized that in order for the organization to survive in the external environment and to succeed in the long run, it was necessary to sustain cooperation from employees by satisfying the condition of efficiency. 32/104
  • 33. Positioning 33/104
  • 34. Positioning 34/104
  • 35. Positioning These are core issues with almost every organization 35/104
  • 36. Positioning The original 4–quadrant BSC fails to make the cause and effect connection between action and outcome – strategy maps replace this approach and show how to “connect the dots” 1. 2. 3. 36/104
  • 37. Positioning A scorecard practice should move the client toward the 3rd generation. They’ll have to get there eventually in order to impact their organization – might as well start out headed in that direction on day one. First Generation Second Generation Third Generation BSC as a BSC as a BSC as a framework for performance management organizational change evaluation system system • Performance measures • Organizational learning • Organizational change • Breakdown of strategy • Identifying and solving • Strategy maps • Four perspectives operational problems • Strategy patterns • Strategic objectives, • Feedback for planning • Integration of budget performance indicators, key • Organizational and personnel plans performance parameters knowledge • Changing the • Performance linked to organizational behavior compensation 37/104
  • 38. Positioning 38/104
  • 39. Positioning 39/104
  • 40. Positioning 40/104
  • 41. Positioning Strategies fail for a simple reason – their inability to be executed 41/104
  • 42. Positioning The four primary barriers that lay the seeds of strategy failure … Only 10% of organizations successfully execute their strategies  Vision Barrier  Only 5% of the workforce  85% of executive teams spend understands the strategy less than one hour per month  Informed action is virtually discussing strategy impossible without sound  Without a clear and concise knowledge of the organizations blueprint for success – the strategy strategy – manage will focus  People Barrier on financial and operational details  Only 25% of managers have  Resource Barrier incentives linked to strategy  Incentives linked to short-  60% of organizations don’t term financial targets, leads to link budget to strategy less than rational decision  Based on strategy, what making at the expense of long initiatives distinguish us from term sustainable success our competition? † Norton and Kaplan and, in Balanced Scorecard Diagnostics: Maintaining Maximum Performance, Paul R. Niven, John Wiley & Sons and Strategy Safari, Mintzbert, Ahlstrand and Lampel, The Free Press, 1998. 42/104
  • 43. Positioning Instituting change is at the heart of a successful Scorecard In many studies of patients who have undergone coronary bypass surgery, only one in nine people, on average, adopts healthier day-to-day habits […] [even if] they clearly see the value of changing their behavior. “The Neuroscience of Leadership,” David Rock and Jeffery Schwartz, strategy+business, Summer 2006 43/104
  • 44. Positioning All five components of strategy are needed for true success Vision Skills Incentives Resources Action Plan Success Vision Skills Incentives Resources Action Plan Confusion Vision Skills Incentives Resources Action Plan Anxiety Incentives Resources Action Plan Gradual Vision Skills Change Vision Skills Incentives Resources Action Plan Frustration Vision Skills Incentives Resources Action Plan False Starts 44/104
  • 45. Positioning The BSC must be placed in the context of process improvement Deriving Enterprise-Based Measures Using the Balanced Scorecard and Goal-Driven measurement Techniques, Wolfhart Goethert and Matt Fisher, Software Engineering and Measurement Analysis Initiative, CMU/SEI-2003-TN-024, October 2003 45/104
  • 46. Positioning A simple set of goals provides a good staring point for a BSC Strategies Key Performance Indicators  Customer satisfaction User Be the supplier of  User survey score Orientation choice for services  Percentage of projects delivered on time  Total business impact Focus resources on  Service budget as a percentage of revenue Business attaining business Value strategies through  Cost impact for each release effective delivery  Percentage of budget allocated to new development  Budget versus actual Operational Deliver timely andat  Staff utilization Excellence effective services or under budget  Staff turnover  Historical availability Develop internal Future capabilities toto learn  Number of documented best practices Orientation and innovate exploit future  Existence of Process Architecture opportunities 46/104
  • 47. Positioning Stakeholder Perspective Service Attributes Relationships Image Recognition Stakeholder Application Quality Time to Delivery System Capabilities of Value Relations Internal Processes Perspective Operations Stakeholder Innovation Regulatory Management Management Processes Processes Learnings & Growth Perspective Human Capital Information Capital Organizational Capital Culture Leadership Alignment Teamwork Budget Perspective Project Budget Resource Performance Management Management Connecting Critical Success Factors with Key Performance Indicators provides traceability from execution at the project level to fulfillment of strategic objectives. 47/104
  • 48. Positioning Selection Key Performance Indicators identified Connection align KPIs with Critical Success Factors Collection Manage KPI process Dashboards, Strategy Maps, Performance Presentation Indicators Action Drive performance improvement 48/104
  • 49. Positioning Vision Top Down Positively Impact Making the effect-and-cause connection between Financial Performance Strategy and Key Performance Indicators is the role of an Balanced Scorecard automation system Strategic Objective Performance Goal Critical Success Key Performance Factor (CSF) Indicator (KPI) Be The Preferred Supplier Of Business Provide on-time, on- Budget Variance BPI ≥ 0.95 Applications budget, on- Schedule Variance CPI ≥ 0.97 Traceable to specification for our Increased Customer enterprise applications Function Points Revenue % Requirements Delivered ≥ 90% Variance Target Cost of Delivery Declining Cost per Provide scalable Impact Customer platform for SLA Compliance ≥ acquisition and Performance Impact 0.98 growth of our customer base Global Operational 24/7/365 Non-Stop Baseline Operations Why What How Measures Flow Down from Strategy to KPIs 49/104
  • 50. Positioning Vision Bottom Up Positively Impact Making the cause-and-effect connection between Key Financial Performance Performance Indicators and Strategy is the role of an Balanced Scorecard automation system Strategic Objective Performance Goal Critical Success Key Performance Factor (CSF) Indicator (KPI) Be The Preferred Supplier Of Business Provide on-time, on- Budget Variance BPI ≥ 0.95 Applications budget, on- Schedule Variance CPI ≥ 0.97 Traceable to specification for our Increased Customer enterprise applications Function Points Revenue % Requirements Delivered ≥ 90% Variance Target Cost of Delivery Declining Cost per Provide scalable Impact Customer platform for SLA Compliance ≥ acquisition and Performance Impact 0.98 growth of our customer base Global Operational 24/7/365 Non-Stop Baseline Operations Why What How Measures Flow Up from KPIs to Strategy 50/104
  • 51. Positioning Many organizations have operational metrics in place. Identifying the Key performance measures is the starting place for developing a strategy based Scorecard Vision Moving from ad hoc collections of performance metrics to Key Performance Metrics (KPI) to a Strategy Focused Organization (SFO), is a natural progression for many organizations. Positively Impact Financial Making the connections between “ad hoc” metrics to KPI’s then to CSF’s creates a Line of Sight Performance between tactical performance measurement of strategy. Strategic Objective Performance Goal Critical Success Factor Key Performance (CSF) Indicator (KPI) Be The Preferred Supplier Of Business Provide on-time, on- Budget Variance BPI ≥ 0.95 Applications budget, on- Schedule Variance CPI ≥ 0.97 Traceable to specification for our Increased Customer enterprise applications Function Points % Requirements Revenue Delivered ≥ 90% Variance An ad hoc collection of Target existing operational Cost of Delivery Declining Cost per performance metrics. Provide scalable Impact Customer Each metric was platform for created for a good Performance Impact SLA Compliance ≥ 0.98 acquisition and growth reason, but not of our customer base Global Operational 24/7/365 Non-Stop necessarily for a the Baseline Operations measurement of a strategic objective Why What How Measures Flow Up from Ad Hoc to KPIs to CSF to Goals to Strategy 51/104
  • 52. Positioning Stakeholder Perspective Service Attributes Relationships Image The Metrics Map describes the Bi-directional Recognition Stakeholder relationships between the Key Application Quality Time to Delivery System Capabilities of Value Relations Internal Processes Perspective traceability Performance Indicators, Critical Regulatory between Success Factors, and tactics and Operations Stakeholder Innovation Management Management Processes Processes Performance Goals in support Learnings & Growth Perspective strategy of a Strategic Objective Human Capital Information Capital Organizational Capital Culture Leadership Alignment Teamwork Budget Perspective Vision Bottom Up Project Budget Resource Making the cause-and-effect connection between Key Positively Impact Performance Management Management Financial Performance Performance Indicators and Strategy is the role of an Balanced Scorecard automation system Strategic Objective Performance Goal Critical Success Factor Key Performance (CSF) Indicator (KPI) Be The Preferred Budget Variance BPI ≥ 0.95 Provide on-time, on- Supplier Of Business budget, on-specification Applications Traceable Schedule Variance CPI ≥ 0.97 for our enterprise to Increased Customer applications Revenue % Requirements Function Points Variance Delivered ≥ 90% Target The Strategy Map described the cause and effect connection Declining Cost per Cost of Delivery Impact Customer Provide scalable between each Strategic platform for acquisition Performance Impact SLA Compliance ≥ 0.98 and growth of our customer base Objective Global Operational Baseline 24/7/365 Non-Stop Operations Why What How Measures Flow Up from KPIs to Strategy 52/104
  • 54. Strategy Strategy is not the same as operational excellence … 54/104
  • 55. Strategy Obtaining commitment for a Staking out the grand purpose Territory Core Risks to be Belief Systems Values Avoided Boundary Systems Business Strategy Critical Interactive Diagnostic Control Strategic Control Systems Uncertainties Performance Systems Variables Positioning for Getting the job tomorrow done † “Levers of Control: How Managers Internal Controls Use Innovative Control Systems to Drive Strategic Renewal ,” R. Simons, Harvard Business School, 1995 55/104
  • 56. Strategy † “The Balanced Scorecard: To Adopt or not to adopt?” Kevin Hendricks, Larry Menor and Christine Wiedman, Ivey Business Journal, Nov/Dec 2004 56/104
  • 57. Strategy Mission and Vision provide the anchors for developing strategy. Without a mission and vision the underlying performance metrics don’t have a foundation on which to stand. “Why are we measuring this activity?” Ask the Mission and Vision for the answer ‒ ‒ ‒ ‒ ‒ 57/104
  • 58. Strategy To be effective, the scorecard should have attributes like these † Implementing Balanced Scorecard, Jessica Keys, and compensation is important, but it is also important to The connection between scorecard performance Auerbach, 2005 understand that this connection comes ONLY in a mature organization where the scorecard and the resulting performance has been operational for some time. Without this maturity the expected benefits will not appear 58/104
  • 59. Strategy It is easy to fall into the trap of being metrics focused rather than strategy focused. Make sure these “sins” are not present in the BSC. If they are, take explicit actions to remove them Common Pit Falls Impact on the Performance Initiative An IT centric view of IT Lack of senior management involvement in metrics Selection performance selection and refinement Measures that don’t No explicit link between metrics and IT strategy matter to the business Lack of common ground Lack of common metrics definitions complicates Collection aggregation An over reliance on tools Lack of focus on data collection processes leads to inaccurate and outdated data No drill–down capability Unavailable context for scorecard–level metrics Reporting hinders interpretation Too many metrics Lack of aggregation and screening of low–level metrics results in cumbersome reports No individual impact Individual lack incentives to impact scorecard Use Implementing Balanced Scorecard, Jessica Keys, Auerbach, 2005 performance 59/104
  • 60. Strategy It is VALUE we’re after with the IT Balanced Scorecard           “The Market–Based Adaptive Enterprise: Listening, Learning and Leading Through Systems Thinking, Vincent P. Barabba, in Proceedings Russell L. Ackoff and The Advent of Systems Thinking, March 1999 60/104
  • 61. Strategy In order to deliver value we must first be ready to deliver value 61/104
  • 62. Strategy ¾’s of the BSC value comes from intangible assets. Only the financial quadrant can be traced to tangible assets 62/104
  • 63. Strategy An example of intangible asset manage built around a scorecard Strategy converts intangible assets into tangible outcomes 63/104
  • 66. Planning Planning is a continuous improvement process Information Outlook Online, March 2005 66/104
  • 67. Planning Role Responsibilities  Assumes ownership for the Balanced Scorecard project  Provides background information to the team on the strategy and methodology Executive  Maintain communication with senior management Sponsor  Commit resources to the team  Provide support and enthusiasm for the Balanced Scorecard throughout the organization  Coordinates meetings; plans, tracks and reports team results to all audiences Balanced  Provides thought leadership on the Balanced Scorecard methodology Scorecard  Ensures that all relevant background material is available to the team Champion  Provides feedback to the executive sponsor and senior management  Facilitates the development of an effective team through coaching and support  Provide expert knowledge of business unit or functional operations  Inform and influence their respective senior executives Team Members  Act as Balanced Scorecard ambassadors within their business units  Act in the best interest  Increase awareness of organizational change issues Organizational  Investigates change-related issues affecting the Balanced Scorecard project Change Expert  Works with the team to produce solutions mitigating change-related risks Balanced Scorecard Diagnostics: Maintaining Maximum Performance, Paul R. Niven, John Wiley & Sons 67/104
  • 68. Planning 1 1 1 1 1 1 1 1 1 1 2 Planning Phase 1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 Develop objectives for the BSC 2 Determine the appropriate business unit 3 Gain executive sponsorship 4 Build the BSC team 5 Formulate the project plan 6 Develop the communication plan Development Phase 1 Gather and distribute background material 2 Develop or confirm, mission, values, vision, & strategy 3 Conduct executive interviews 4 Develop objectives and measures 4a Executive workshop 4b Gather employee feedback 5 Develop cause and effect linkages 5a Executive workshop 6 Establish targets for measures 6a Executive workshop 7 Develop ongoing Balance Scorecard plan Balanced Scorecard Diagnostics: Maintaining Maximum Performance, Paul R. Niven, John Wiley & Sons 68/104
  • 70. Beneficial Outcomes The benefits appear “soft” at first, they are “booked” as well Allan R. Bailey, Chee W. Chow, and Kamal M. Haddad, "Continuous Improvement in Business Education: Insights from the For-Profit Sector and Business School Deans," Journal of Education for Business, January-February 1999, pp. 165-181 70/104
  • 74. Measurement 74/104
  • 75. Measurement Information Needs Techncial & User Feedback Management Processes Core Measure Processes Establish Plan Perform Evaluate Commitment Analysis Results Improvement Actions 75/104
  • 76. Measurement People Procedures Data Software Hardware  Owner of the  Procedures  Performance  Software for  Personal PMS and rules for relevant data, the extraction, computers  People the definition of the “as is” transformation  Servers accountable for the values and loading of performance the data  Communication the units of  “To be” values infrastructure measure indicators of the  Database  Rules for data performance management  Storage  People who set up and management indicators software. Data maintain the  Rules for data  Performance warehousing PMS communication results software  Data suppliers  Rules for the (calculated  Data analysis use of the data) software  Internal and external users performance  Meta data  Presentation of the PMS results description of and the communication  Internal and performance software external indicators stakeholders 76/104
  • 77. Measurement Guide to a Balanced Scorecard Performance Management Methodology, National Partnership for Reinventing Government, U. S. Department of Commerce, 1999 77/104
  • 78. Measurement 78/104
  • 79. Measurement It’s easy to create “ugly” measures, so test the outcomes of each measure before use “What to do with your ugly measures!,” Stacey Barr, www.staceybarr.com 79/104
  • 80. Measurement Too many CXOs judge implementations by measuring the technical capacity of a project, instead of considering how it has improved their companies' business “The Metrics Trap,” CIO Magazine, Feb 15, 2004 80/104
  • 81. Measurement Each metric needs to be tested against these attributes 1. 2. 3. 4. 5. “Two Mistakes Most Professional Services Organizations Make,” Thomas Lah, Technology Professional Services Association (TPSA) 81/104
  • 82. Measurement Perverse metrics, linked to perverse incentives, always yields to perverse results 1. 2. 3. 4. 5. Implementing Balanced Scorecard, Jessica Keys, Auerbach, 2005 82/104
  • 83. Measurement Metrics are useful, indicators are better suited for strategy Deriving Enterprise-Based Measures Using the Balanced Scorecard and Goal-Driven measurement Techniques, Wolfhart Goethert and Matt Fisher, Software Engineering and Measurement Analysis Initiative, CMU/SEI-2003-TN-024, October 2003 83/104
  • 87. Stakeholder Perspective Service Attributes Relationships Image Recognition Stakeholder Application Quality Time to Delivery System Capabilities of Value Relations Internal Processes Perspective Operations Stakeholder Innovation Regulatory Management Management Processes Processes Learnings & Growth Perspective Human Capital Information Capital Organizational Capital Culture Leadership Alignment Teamwork Budget Perspective Project Budget Resource Performance Management Management 87/104
  • 88. “Do the right things, do them well, do them with less, to…” Business Results ……reduce overall ……reduce overall …enable profitable …enable profitable …enable firm to accelerate …enable firm to accelerate operating costs -- R2 operating costs R2 operations -- R1 operations R1 market deployment -- R3 market deployment R3 Competency Contribution Expectations Competency Credibility Contribution Project “Keep my “Keep my “Manage to “Manage to “Understand my “Implement timely and cost- “Understand my “Implement timely and cost- systems running” systems running” corporate goals” corporate goals” operation” -- E3 effective solutions” -- E4 operation” E3 effective solutions” E4 -- E1 E1 -- E2 E2 Operational Excellence Operational Excellence Project // IT Alignment Project IT Alignment Solutions Leadership Solutions Leadership Reduce the cost of Reduce the cost of Provide appropriate technology to Provide appropriate technology to Provide innovative Provide innovative providing services -- P1 providing services P1 enable success -- P2 enable success P2 solutions -- P3 solutions P3 Internal Processes Deliver solutions Deliver solutions Manage Manage Leverage Leverage Improve Improve requirements -- P7 on schedule -- P6 on schedule P6 requirements P7 knowledge and knowledge and processes for processes for best practices -- P10 best practices P10 efficiency efficiency and quality -- and quality Centralize IT Centralize IT Enhance customer Enhance customer P4 P4 resources -- P5 resources P5 relationships -- P9 relationships P9 Strategically deploy services -- P8 Strategically deploy services P8 People and Develop and Develop and Recognize team Recognize team Provide employees with Provide employees with Tools Build a high performance Build a high performance retain critical retain critical and individual and individual the tools and knowledge the tools and knowledge culture -- S2 culture S2 skills -- S1 skills S1 performance -- S3 performance S3 they need -- S4 they need S4 88/104
  • 92. Enterprise mission  % mission improvement (cost, time, quantity) attributed to goals IT solutions and services  % planned IT benefits achieved  % IT strategies fully matched to enterprise strategies Portfolio Analysis  % IT portfolio reviewed and disposed and Management  % compliance to approved IT solution deployment  % reusability of core modules Financial and  % total IT costs by major asset categories (hardware, investment software, personnel, facilities, management) performance  IT budget as % of operational budget and compare to industry average net present value, internal rate of return, return of investment, return on assets percentages (aggregate or by project) IT resources  % databases that can be shared usage  % hardware/software with interoperability capabilities 92/104
  • 93. Customer  % cooperative customer and IT applications design partnership and  % joint development service level agreements involvement  % customers attending IT investment meetings  % customers reporting full use of applications  % customers satisfied with IT application design  % customers satisfied with IT maintenance and Customer support satisfaction  % of problems resolved within target time  % products launched on time taken to fulfill service requests  degree to which IT solution support process improvement plans  degree to which IT aids process analysis Business process support  degree to which IT solutions can adapt to new requirements  incremental cost to transfer application to new hardware platform 93/104
  • 94.  % procurement exception to architecture standards Architecture  N variations from standards detected by standards review and audit per year compliance  % increase in systems using standard architecture  % projects on time, on budget  % projects using standard methodology for Project systems analysis and design performance  N backlog on enhancement and maintenance requests  % system availability Infrastructure  % applications availability availability  on-line system response time 94/104
  • 95. Workforce  N staff trained by skill area competency  % staff training uses new technologies and and techniques development  % staff professionally certified  % IT budget devoted to training and staff development Employee  % employees satisfied with the existing satisfaction technical and operating environment to deliver quality products or services  % employees satisfied with training  % employee turnover by function 95/104
  • 102. These books are Mandatory reading for anyone claiming to practice the discipline of Balanced Scorecard 102/104
  • 103. These papers and articles are reading for background, ideas, and guidance www.ejise.com 103/104