The document discusses the Balanced Scorecard (BSC) as a strategic planning and management system used by organizations worldwide to align business activities with their vision and strategy. It covers various aspects of BSC, including its history, stakeholder analysis, performance measurement, and key performance indicators (KPIs), and highlights successful implementations and the benefits of performance measurement. The document also outlines the four perspectives of the BSC—financial, customer, business process, and learning and growth—and provides examples and references for further understanding.

1. Balance Scorecard
Eng. Murhaf Ashi Cascading to Details
10 March , 2010

2. Strategic point of view
“ Do not repeat the tactics which have gained you one
victory, but let your methods be regulated by the
infinite variety of circumstances ”
Sun Tzu c. 490 BC, Chinese military strategist
Eng. Murhaf Ashi

3. Balance Scorecard
Company
current
situation BSC Target
Strategy
Eng. Murhaf Ashi

4. Agenda
• Introduction to BSC
• Measure Performance
• BSC history
• Stake Holder analysis
• S.W.O.T Analysis
• BSC four perspective
• Key Performance Indicators (KPI)
• Initiatives Matrix
• BSC strategy map examples
• References
Eng. Murhaf Ashi

5. Dose it work
• By 2004, the balanced scorecard has been at least partially
implemented in about 57% of global corporations, according
to a survey by Bain. This site contains some examples of
companies and government organizations that have reported
their use of the balanced scorecard. We have prepared a
database of over 130 of these organizations. For details please
see our examples of balanced scorecard usage.
Eng. Murhaf Ashi

6. Success Stories
AMEDD Finds Direction in Strategic Planning
The Army Surgeon General and Commander of the US Army Medical
Command champion the use of the balanced scorecard as "the principal tool
by which they improve operational and fiscal effectiveness and better meet
the needs of patients and stakeholders.
Award for Excellence
The Institute honors Mecklenburg County, NC with an Award for Excellence
for successfully transforming the county government and positioning it for
tough times.
Scorecard Driving Strategy at Veolia Water North America
With a new CEO and ambitious revenue goals, Veolia NA first successfully
implemented a balanced scorecard and then integrated the scorecard
deeper into its organization using an e-learning tool
Eng. Murhaf Ashi

7. Agenda
• Introduction to BSC
• Measure Performance
• BSC history
• Stake Holder analysis
• S.W.O.T Analysis
• BSC four perspective
• Key Performance Indicators (KPI)
• Initiatives Matrix
• BSC strategy map examples
• References
Eng. Murhaf Ashi

8. Why We Should Measure Performance ?
Performance measurement improves communications internally
among employees, as well as externally between the organization and
as customers and stakeholders.
The emphasis on measuring and improving performance (i.e.,
"results- oriented management") has created a new climate, affecting
all government agencies, and most private sector and nonprofit
institutions as well.
Eng. Murhaf Ashi

9. Good Performance Measures
• Provide a way to see if our strategy is working
• Focus employees' attention on what matters most to success
• Allow measurement of accomplishments, not just of the work that is
performed
• Provide a common language for communication
• Are explicitly defined in terms of owner, unit of measure, collection
frequency, data quality, expected value(targets), and thresholds
• Are valid, to ensure measurement of the right things
• Are verifiable, to ensure data collection accuracy
Eng. Murhaf Ashi

10. Agenda
• Introduction to BSC
• Measure Performance
• BSC history
• Stake Holder analysis
• S.W.O.T Analysis
• BSC four perspective
• Key Performance Indicators (KPI)
• Initiatives Matrix
• BSC strategy map examples
• References
Eng. Murhaf Ashi

11. What is the balanced scorecard?
• The balanced scorecard is a strategic planning and management system
that is widely applicable to organizations regardless of size or type of
business.
• The system, extensively used in business and industry, government, and
nonprofit organizations worldwide, provides a method of aligning business
activities to the vision and strategy of the organization, improving internal
and external communications, and monitoring organization performance
against strategic goals
Eng. Murhaf Ashi

12. BSC history
• It was originated by Robert Kaplan and David Norton of Harvard University in
about 1990, but the roots of the balanced scorecard are deep, and include the
pioneering work of General Electric on performance measurement reporting in the
1950’s and the work of French process engineers in the early part of the 20th
century in France.
David Norton Robert Kaplan
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13. Basic Concepts
Balanced Scorecard views the organization from 4 distinct
perspectives:
Learning and Growth Perspective
– What do we excel at?
Business Process Perspective
– How do we continue to grow and create value?
Customer Perspective
– How do our customers see us?
Financial Perspective
– How do we achieve the lowest cost?
Eng. Murhaf Ashi

14. Basic Concepts
Balanced Scorecard views the organization from 4 distinct perspectives:
Learning and Growth Perspective
• What do we excel at?
Business Process Perspective
• How do we continue to grow and create value?
Customer Perspective
• How do our customers see us?
Financial Perspective
• How do we achieve the lowest cost?
Eng. Murhaf Ashi

15. Agenda
• Introduction to BSC
• Measure Performance
• BSC history
• Stake Holder analysis
• S.W.O.T Analysis
• BSC four perspective
• Key Performance Indicators (KPI)
• Initiatives Matrix
• BSC strategy map examples
• References
Eng. Murhaf Ashi

16. Stake Holder analysis
Keep Satisfied Manage Closely
This tool should be
High GM- Peter
applied at the early Mngr- H.Q
stages of the BSC to
CEO- John
identified all Mngr- Vector .S
stakeholder who will
benefit from the BSC VP- David. A
strategy.
Power
Identifying the nature Monitor Minimum Keep Informed
of each stakeholder Effort
Blocker, Neutral and press contractor
Supporter will help to
understand their
demand and to find Coworker-
Government sector
what the new strategy low
could promises them
low Interest High

17. Agenda
• Introduction to BSC
• Measure Performance
• BSC history
• Stake Holder analysis
• S.W.O.T Analysis
• BSC four perspective
• Key Performance Indicators (KPI)
• Initiatives Matrix
• BSC strategy map examples
• References
Eng. Murhaf Ashi

18. S.W.O.T Analysis
SWOT analysis is a tool for auditing an
organization and its environment. It is
the first stage of planning
Strengths Weaknesses
SWOT stands for strengths,
weaknesses, opportunities, and
threats. Strengths and weaknesses
are internal factors. Opportunities
and threats are external factors.
Opportunities Threats

19. Agenda
• Introduction to BSC
• Measure Performance
• BSC history
• Stake Holder analysis
• S.W.O.T Analysis
• BSC four perspective
• Key Performance Indicators (KPI)
• Initiatives Matrix
• BSC strategy map examples
• References
Eng. Murhaf Ashi

20. BSC four perspective
Product quality
Customer
& quantity
satisfaction
Branch and
leafs strength Process
Employees
Quality of Soil Skills and
education

21. BSC four perspective
Customer Perspective
Business Process Perspective
Learning and Growth Perspective
Financial Perspective

22. Customer Perspective
Customer focus, orientation, and satisfaction are key
components
Customer will find other suppliers if they are not satisfied or
their requirements are not being met
Poor customer satisfaction is a leading indicator of future
financial decline. Even if the current financial picture is good
Developing metrics in this area requires that customer
profiles be done as well as the processes that provide the
products and services to them

23. Business Process Perspective
This refers to internal business processes.
Metrics are used in this perspective to determine how well the
organization’s businesses are running.
Determine whether the businesses products and services conform
to customer requirements (the Mission).
Metrics must be carefully designed by those who know the
business processes best.
Typically there are 2 types of business processes relative to BSC:
1) Mission Oriented Processes that are special functions of major lines of
business. Typically this requires specialized metrics.
2) Support Processes that are the day-to-day processes that support the
business and organization. Typically they can be measured and benchmarked
with generic metrics.

24. Learning and Growth Perspective
Employee training.
Corporate culture attitudes on individual and corporate self-
improvement.
Knowledge worker organization with people as the repository of
knowledge.
Continuous learning mode of operation driven by rapid technology
advancements.
Learning is more than training (for example, it includes mentors and
tutors, ease of communication, etc.).
Utilization of technology tools, “high technology work systems” (for
example, the intranet).

25. Financial Perspective
Based on financial data that is timely and accurate funding
data
Implementation of a corporate financial database is key
Centralization and processing, accessibility, and automation of
financial data is key
Special attention must be paid to any possible “skewing” of
the Financial Perspective
Risk Assessment and Cost/Benefit Analysis should be included
in this
perspective

26. Two type of structures (Depend on organization nature)
Profitable organization Non profitable organization
Stakeholder Mission
Financial Perspective Customer Perspective
Customer Perspective Business Process Perspective
Business Process Perspective Learning and Growth Perspective
Learning and Growth Perspective Financial Perspective
Eng. Murhaf Ashi

27. BSC objective example
Operate in the black with 5% margin by increasing
Financial Perspective revenues
Customer Perspective Increase utilization of services
Business Process Perspective Provide high quality services
Learning and Growth Perspective
Motivate, recognize and retain staff
Eng. Murhaf Ashi

28. Cause & Effect relationship
Increase the
annual Financial Perspective
profit
Increase
utilization
of services Customer Perspective
Provide
high quality Business Process Perspective
services
Increase Increase
employers employers
computer Marketing Learning and Growth Perspective
skills skills

29. Agenda
• Introduction to BSC
• Measure Performance
• BSC history
• Stake Holder analysis
• S.W.O.T Analysis
• BSC four perspective
• Key Performance Indicators (KPI)
• Initiatives Matrix
• BSC strategy map examples
• References
Eng. Murhaf Ashi

30. Key Performance Indicators (KPI)
Key performance indicators (KPI) are quantifiable measures of
progress toward an organization’s goals.
For example, the timely collection of receivables is a KPI for
the goal of maintaining healthy cash flow, and value added
per factory payroll hour is a KPI for the goal of maximizing
factory productivity.
Key performance indicators can be financial or non-financial.
But they must be quantifiable—measurable—accurately and
consistently over time.
Each objective of the BSC map has a number of KPI’s to
measure the accomplishment of the objective.
Eng. Murhaf Ashi

31. Types of KPI’s
1 2 3 4
By what is Forward/Backward
By Format
measured Measure By Strategic/Operational
Number Input Lag
Strategic Measures (KPIs)
Ratio Process Lead appearing in a BSC
Percentage Output
Operational Measures
not appearing in a BSC
Ranking Outcome
Rating
Index
Eng. Murhaf Ashi

32. Agenda
• Introduction to BSC
• Measure Performance
• BSC history
• Stake Holder analysis
• S.W.O.T Analysis
• BSC four perspective
• Key Performance Indicators (KPI)
• Initiatives Matrix
• BSC strategy map examples
• References
Eng. Murhaf Ashi

33. Initiatives Matrix
The Initiatives Matrix include all the objectives of the balance
scorecard strategy map and all the projects that support each
objective.
The next slide shows an example of the Initiatives Matrix
Eng. Murhaf Ashi

34. Tourism Centre
F1:Use resources effectively
LG2: Align employee to strategy
IP1:Foster Cultural Development
IP2: Build Effective Infrastructure
F2: Maximize return of investments
C2: Attain a High Quality of Life for All
LG4: Make effective use of technology
C1: Become a Capital of Islamic Culture
LG3: Foster innovative and ethical culture
IP5: Advocate Jeddah Vision and Strategy
IP3:Offer high quality of integrated services
IP4 Plan strategically and build future capacity
IP6: Ensure Effective Governance and Partnership
C3: Achieve and Maintain Sustainable Development
LG1: Recruit and retain talented and motivated people
F3:Ensure diversified and sustained sources of income
Initiatives Matrix
with 4
without
projects
projects
Objective
Objective C4: Make Jeddah a Dynamic & Resilient International Commercial &
Affordable Housing Markets
Programme
3
Area-specific traffic reduction
schemes
3
Associated Hajj Institutions located in
Jeddah
1
1
2
2
3
1
3
3
3
Bahrah Industrial City
2
1
1
1
-1
-3
City Broadband Network
3
1
1
City Densification
City Energy Efficiency
2
1
1
City leisure and entertainment
facilities
3
Example of Initiatives Matrix
City Produce Markets
City Public Transport System
Project
doesn't
support
City wide integrated parking
objective
City Wide Open Space Provision
1
City-wide Street System Upgrade /
Public Realm Enhancement
1
Communication Strategy / Ongoing
3 Public Relations
3
3
2
3
Comprehensive Planning Policy
Framework
1
3
2
2
2
Comprehensive Waste Management
Programme
1
Corniche Projects
1
2
1
1
1
2
1
1
1
1
2
2
Creation of a strategic planning team
to build capacity
2
2
2
2
2
3
2
1
2
Designation of Protected Areas
Eastern Hills Reserve
1
1
1
Education & Skills Advancement
3
1
2
3
1
2
1
Environmental Performance targets for
E-government initative
3
3
3
1
public bodies, businesses and the
1
Establishment of a Jeddah
Environmental Authority
1
2
Establishment of an Urban
Observatory ?
1
Ground water management
1
Historic Core
1
1
2
2
1
Jeddah Central Station
3
1
1
2
2
Jeddah Cultural Events/Festivals
1
2
3

35. Agenda
• Introduction to BSC
• Measure Performance
• BSC history
• Stake Holder analysis
• S.W.O.T Analysis
• BSC four perspective
• Key Performance Indicators (KPI)
• Initiatives Matrix
• BSC strategy map examples
• References
Eng. Murhaf Ashi

36. BSC strategy map examples
Examples of BSC strategy map of global organization
BSC STRATEGY MAP EXAMPLES

37. Eng. Murhaf Ashi

38. Agenda
• Introduction to BSC
• Measure Performance
• BSC history
• Stake Holder analysis
• S.W.O.T Analysis
• BSC four perspective
• Key Performance Indicators (KPI)
• Initiatives Matrix
• BSC strategy map examples
• References
Eng. Murhaf Ashi

39. References
Dr. Mohammed Mustafa Mahmoud workshop & material
Epstein, Marc, and Jean-François Manzoni. "Implementing Corporate Strategy: From Tableaux de Bord to Balanced Scorecards."
European Management Journal , April 1998, pp. 190-203.
"Harvard Business Review Balanced Scorecard Report." Harvard Business Review, 2002 to present (bimonthly).
Kaplan, Robert S., and David P. Norton. Alignment: Using the Balanced Scorecard to Create Corporate Synergies. Harvard Business
School Press, 2006.
Kaplan, Robert S., and David P. Norton. "The Balanced Scorecard: Measures That Drive Performance." Harvard Business Review, July
2005, pp. 71-79.
Kaplan, Robert S., and David P. Norton. The Strategy-Focused Organization: How Balanced Scorecard Companies Thrive in the New
Business Environment. Harvard Business School Press, 2000.
Kaplan, Robert S., and David P. Norton. Strategy Maps: Converting Intangible Assets into Tangible Outcomes. Harvard Business School
Press, 2004.
Niven, Paul R. Balanced Scorecard Diagnostics: Maintaining Maximum Performance. John Wiley & Sons, 2005.
Niven, Paul R. Balanced Scorecard Step-by-Step: Maximizing Performance and Maintaining Results, 2d ed. John Wiley & Sons, 2006
2005 Oak Ridge Associated Universities
RL Information Consulting LLC
http://www.balancedscorecard.org
http://www.bain.com
NAPAL excellence in business management , http://www.napl.org
www.gate2quality.com
www.kellen.net
purestonepartners.com/tag/strategy-management/