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BALANCED SCORCARD
( BSC)
• IT IS A STRATEGIC PERFORMANCE
MANAGEMENT TOOL
• IT CAN BE USED BY MANAGEMENT TO KEEP
TRACK ON THE OGANIGATIONAL PERFORMANCE
CHARACTERISTICS
• BSC IS THE PRESENTATION OF A MIXTURE OF
FINANCIAL AND NON-FINANCIAL MEASURES
COMPARED TO A “TARGET”
• THESE NON-FINANCIAL ARE “CUSTOMER”,
“INTERNAL BUSINESS PROCESSES” AND “LEARNING
& GROWTH”
HISTORY
•THE FIRST BSC WAS CREATED BY ART
SCHNEIDERMAN AN INDEPENDENT CONSULTANT IN
1987
•IN 1996 DR.ROBERT S KAPLAN AND DR.DAVID P
NORTON PUBLISHED THEIR BOOK “BALANCED
SCORECARD : TRANSLATING STRATEGY INTO ACTION”
ORIGINAL DESIGNE METHOD
Objectives Measures Targets Initiatives
Financial
Customer
Process
Learning
DIAGRAM OF THE BALANCED SCORECARD
Financial
StrategyCustomer Business
Processes
Learning
& Growth
DESIGN
Adapted from Robert s. Kaplan & David P. Norton,” using the BSC as a strategic management system”
BSC -FACTORS
Department Areas
Finance Return On Investment
Cash Flow
Return on Capital Employed
Financial Results (Quarterly/Yearly)
Internal Business
Processes
Number of activities per function
Duplicate activities across functions
Process alignment (is the right process in
the right department?)
Process bottlenecks
Process automation
Learning & Growth Is there the correct level of expertise for
the job?
Employee turnover
Job satisfaction
Training/Learning opportunities
Customer Delivery performance to customer
Quality performance for customer
Customer satisfaction rate
Customer percentage of market
Customer retention rate
Department Areas
BSC –FACTORS (Continued..)
IMPROVED DESIGNE METHODS
• IN THE MID 1990,AN IMPROVED DESIGNED
EMERGED.
• MEASURES ARE SELECTED BASED ON A SET OF
“STRATEGIC LINKAGED MODEL” OR STRATEGY
MAP
• THIS STYLE OF BSC WAS KNOWN AS 2ND
GENERATION
• STRATEGY MAP WITH A LONG-TERM OUT
COME KNOWN AS 3RD GENERATION BSC.
BSC AS STRATEGIC MANAGEMENT SYSTEM
• CLARIFYING STRATEGY
• COMMUNICATING STRAGIC OBJECTIVES
• PLANNING, SETTING TERGATES AND ALIGNING
STRATEGIC INITIATIVES
• STRATEGIC FEEDBACK AND LEARNING
BUILDING & IMPLEMENTING A BSC :
Nine steps to success
CRITICISM
• BSC HAS ALWAYS ATTRACTED CRITICISM FROM
MANY SOURCES
• ACADEMIC COMMUNITY DISLIKE EMPIRICAL
NATURE OF FRAMEWORK
• KAPLAN & NORTON FAILED TO INCLUDE ANY
CITATION OF PRIOR ART
• BSC DOES NOT PROVIDE A BOTTOM LINE
SCORE OR RECOMMENDATIONS
• IT IS SIMPLY A LIST OF MERTRICS .
POPULARITY
• IN SPITE OF CRITICISM BSC HAS BEEN IMPLEMENTED
BY GOVT. AGENCIES, MILITARY, BUSINESS UNITS AND
CORPORATIONS.
• BSC WERE OFTEN DESIGNED REMOTELY BY
CONSULTANTS. MANAGERS DID NOT TRUST THEM.
SOFTWARE TOOLS
• BSC IS NOT A COMPLEX THING. IT IS ONLY
SPREAD IN 20 MEASURES
• THE PROCESS OF COLLECTING REPORTING
AND DISTRIBUTING BSC INFORMATION CAN
BE LABOR INTENSIVE AND PROCEDURAL
PROBLEM.
• SOFTWARE PACKAGES ARE ALREADY
AVAILABLE TO AUTOMATE THE COLLECTION
OF INFORMATION
THANK YOU

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Balanced scorcard

  • 1.
  • 2. BALANCED SCORCARD ( BSC) • IT IS A STRATEGIC PERFORMANCE MANAGEMENT TOOL • IT CAN BE USED BY MANAGEMENT TO KEEP TRACK ON THE OGANIGATIONAL PERFORMANCE
  • 3. CHARACTERISTICS • BSC IS THE PRESENTATION OF A MIXTURE OF FINANCIAL AND NON-FINANCIAL MEASURES COMPARED TO A “TARGET” • THESE NON-FINANCIAL ARE “CUSTOMER”, “INTERNAL BUSINESS PROCESSES” AND “LEARNING & GROWTH”
  • 4. HISTORY •THE FIRST BSC WAS CREATED BY ART SCHNEIDERMAN AN INDEPENDENT CONSULTANT IN 1987 •IN 1996 DR.ROBERT S KAPLAN AND DR.DAVID P NORTON PUBLISHED THEIR BOOK “BALANCED SCORECARD : TRANSLATING STRATEGY INTO ACTION”
  • 5. ORIGINAL DESIGNE METHOD Objectives Measures Targets Initiatives Financial Customer Process Learning
  • 6. DIAGRAM OF THE BALANCED SCORECARD Financial StrategyCustomer Business Processes Learning & Growth
  • 7. DESIGN Adapted from Robert s. Kaplan & David P. Norton,” using the BSC as a strategic management system”
  • 8. BSC -FACTORS Department Areas Finance Return On Investment Cash Flow Return on Capital Employed Financial Results (Quarterly/Yearly) Internal Business Processes Number of activities per function Duplicate activities across functions Process alignment (is the right process in the right department?) Process bottlenecks Process automation
  • 9. Learning & Growth Is there the correct level of expertise for the job? Employee turnover Job satisfaction Training/Learning opportunities Customer Delivery performance to customer Quality performance for customer Customer satisfaction rate Customer percentage of market Customer retention rate Department Areas BSC –FACTORS (Continued..)
  • 10. IMPROVED DESIGNE METHODS • IN THE MID 1990,AN IMPROVED DESIGNED EMERGED. • MEASURES ARE SELECTED BASED ON A SET OF “STRATEGIC LINKAGED MODEL” OR STRATEGY MAP • THIS STYLE OF BSC WAS KNOWN AS 2ND GENERATION • STRATEGY MAP WITH A LONG-TERM OUT COME KNOWN AS 3RD GENERATION BSC.
  • 11. BSC AS STRATEGIC MANAGEMENT SYSTEM • CLARIFYING STRATEGY • COMMUNICATING STRAGIC OBJECTIVES • PLANNING, SETTING TERGATES AND ALIGNING STRATEGIC INITIATIVES • STRATEGIC FEEDBACK AND LEARNING
  • 12. BUILDING & IMPLEMENTING A BSC : Nine steps to success
  • 13. CRITICISM • BSC HAS ALWAYS ATTRACTED CRITICISM FROM MANY SOURCES • ACADEMIC COMMUNITY DISLIKE EMPIRICAL NATURE OF FRAMEWORK • KAPLAN & NORTON FAILED TO INCLUDE ANY CITATION OF PRIOR ART • BSC DOES NOT PROVIDE A BOTTOM LINE SCORE OR RECOMMENDATIONS • IT IS SIMPLY A LIST OF MERTRICS .
  • 14. POPULARITY • IN SPITE OF CRITICISM BSC HAS BEEN IMPLEMENTED BY GOVT. AGENCIES, MILITARY, BUSINESS UNITS AND CORPORATIONS. • BSC WERE OFTEN DESIGNED REMOTELY BY CONSULTANTS. MANAGERS DID NOT TRUST THEM.
  • 15. SOFTWARE TOOLS • BSC IS NOT A COMPLEX THING. IT IS ONLY SPREAD IN 20 MEASURES • THE PROCESS OF COLLECTING REPORTING AND DISTRIBUTING BSC INFORMATION CAN BE LABOR INTENSIVE AND PROCEDURAL PROBLEM. • SOFTWARE PACKAGES ARE ALREADY AVAILABLE TO AUTOMATE THE COLLECTION OF INFORMATION