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    SM Balance Scorecard

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    Irsa Rehman
    The document provides an overview of the balanced scorecard model including: 1) It defines the balanced scorecard and explains that it translates strategy into objectives across financial, customer, internal process, and learning/growth perspectives. 2) The elements of a balanced scorecard are identified as financials, customers, internal processes, and learning and growth. 3) Benefits of the balanced scorecard include linking strategy to execution, communicating strategy, and monitoring progress.

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    SM Balance Scorecard

    Uploaded by

    Irsa Rehman
    1K views6 pages
    The document provides an overview of the balanced scorecard model including: 1) It defines the balanced scorecard and explains that it translates strategy into objectives across financial, customer, internal process, and learning/growth perspectives. 2) The elements of a balanced scorecard are identified as financials, customers, internal processes, and learning and growth. 3) Benefits of the balanced scorecard include linking strategy to execution, communicating strategy, and monitoring progress.

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    The document provides an overview of the balanced scorecard model including: 1) It defines the balanced scorecard and explains that it translates strategy into objectives across financial, customer, internal process, and learning/growth perspectives. 2) The elements of a balanced scorecard are identified as financials, customers, internal processes, and learning and growth. 3) Benefits of the balanced scorecard include linking strategy to execution, communicating strategy, and monitoring progress.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    1K views6 pages

    SM Balance Scorecard

    Uploaded by

    Irsa Rehman
    The document provides an overview of the balanced scorecard model including: 1) It defines the balanced scorecard and explains that it translates strategy into objectives across financial, customer, internal process, and learning/growth perspectives. 2) The elements of a balanced scorecard are identified as financials, customers, internal processes, and learning and growth. 3) Benefits of the balanced scorecard include linking strategy to execution, communicating strategy, and monitoring progress.

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    Attribution Non-Commercial (BY-NC)
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    Download as docx, pdf, or txt
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    The passage discusses the balanced scorecard framework, which is a strategic planning tool used to translate an organization's strategy into tangible objectives across four perspectives: financial, customer, internal processes, and learning and growth.

    The four perspectives of the balanced scorecard are financial, customer, internal processes, and learning and growth.

    Financial metrics include revenue, growth, margins, and profitability. Customer metrics include market share, retention, and satisfaction. Internal process metrics include project performance, cycle times, and success rates. Learning and growth metrics include staff performance, employee satisfaction, and training.

    SZABIST

    STRATEGIC MANAGEMENT
    ASSIGNMENT
    Balance Scorecard
    November 30, 2012

    Course Instructor: Syed Nawab Prepared By: Sana Jamil (1225168)

    Balance Scorecard
    Balance Scorecard Defined
    The Balanced Scorecard (BSC) is a management model that translates the strategy into interrelated objectives, measured through indicators and linked to action plans that align the behavior of the members of the organization's strategy the company. A quoted definition states that, 'A strategic planning and management system used to align business activities to the vision statement of an organization.' The Balanced Scorecard is a link between strategy formulation and implementation. In its approach to the traditional financial indicators supplemented by a customer, internal process and learning and growth perspective

    Detailed Explanation
    The CMI model designed by Kaplan and Norton (Balanced Scorecard) seeks a scorecard "balanced", where in addition to the financial perspective takes into account the other three areas at a strategic level within organizations: customers, processes and resources. Most common in organizations with dashboards is that they are based on financial indicators, which offers a view of the potential short-placista organization. Although the concept of Balanced Scorecard can be misleading to consider it a control box that covers all areas of the company without more, the original name Balanced Scorecard (BSC) tells of a scorecard "balanced", where we use indicators to measure strategic objectives. This is a management control tool, whose primary function is the implementation and communication of strategy throughout the company.

    Elements of a BSC
    The Balanced Scorecard is made up of four key elements. These elements are defined as:

    FINANCIALS
    Financial indicators will vary from organization to organization but they are based on the expectancy of the organizations strategic objective. Examples: Revenue, Growth, Reductions, Margins, Profitability, Cash Flow, ROI, Forecasts

    CUSTOMERS
    Identifies Customers, Markets, Value Proposition and Satisfaction Examples: Market Share, Retention, New Customers, Satisfaction Indexes, Customers Profitability, Product/Service Attributes

    INTERNAL PERSPECTIVES
    Internal Perspectives is the critical processes necessary for delivery of superior performance in achieving financial measures. Examples: Project Performance, Reflections/Reworks, Cycle Times, Success Rates

    LEARNING AND GROWTH


    Identity and Resources of the Organizational Framework Examples: Staff Performance, Employee Satisfaction, Training

    Main objectives of the Balanced Scorecard


    Translate the strategy into operational terms Align the organization to the strategy Making the strategy is the daily work worldwide Make strategy a continuous process Mobilize change through executive leadership

    Benefits of Scorecard
    Linking Strategy with Execution defining objectives in the short, medium and long term. Having a tool that allows control decisions in an agile. Communicate the strategy at all levels of the organization and getting aligning people with strategy. Have a clear understanding of the cause-effect of the strategy.

    The Balanced Scorecard is still traditional financial indicators. The difference with other systems is that the Balanced Scorecard financial indicators tell the story of events and past events, an adequate story for industrial age companies for which investments in capabilities and customer relationships in the long term were not critical for success. However, these financial indicators are inadequate for guiding and evaluating the journey that companies in the information age must make to create future value through investment in customers, suppliers, employees, processes, technology and innovation.

    The Balanced Scorecard complements financial measures of past performance with measures of the drivers of future performance. Objectives and Indicators Scorecard derived from the vision and strategy of an organization, and provide for the performance of the organization from four perspectives. The Balanced Scorecard expands the set of objectives of the business units beyond the financial indicators clearly reveals the value inductors for a competitive financial performance and superior long-term.

    Balance Scorecard Implementation


    Implementing the Balanced Scorecard system company-wide should be the key to the successful realization of the strategic plan/vision. A Balanced Scorecard should result in: Improved processes Motivated/educated employees Enhanced information systems Monitored progress Greater customer satisfaction Increased financial usage

    There are many software packages on the market that claim to support the usage of Balanced Scorecard system. For any software to work effectively it should be: Compliant with your current technology platform Always accessible to everyone - everywhere Easy to understand/update/communicate

    It is of no use to anyone if only the top management keeps the objectives in their drawers or cupboards and guards them like the Holy Grail. Feedback is essential and should be ongoing and contributed to by everyone within the organization. And it should be borne in mind that Balanced Scorecards do not necessarily enable better decision-making!

    BALANCE SCOREDCARD OF NOKIA


    Nokia which started as manufacturers of rubber products and cable and telephone cables entered the telecommunication industry in the year 1960. In the early 1990s Nokia made telecommunication their core business. Nokia today over their 147 years of history has become a world leader in mobile communications. Nokia today offers products and services to more than billion people from every demographics (Annual Report 2011; Roberts, 2004, pp. 7588). The BCS aims to influence corporate governance through four areas or perspectives, these are: Learning and Development : In order to analyze whether the business model Nokia can continue to increase business variables such as billing, profit or organic growth Aspects internal business: selecting what are the nuances that differentiate Nokia within the sector in which it operates, determining what Nokias competitive advantages and establish a roadmap to exploit (Roberts, 2004, pp. 7588) Customer relationship : the customer is the centre of the system, and as such should show a high sensitivity to the formation of opinion about Nokia these Aspects financial , that in turn has the objective of creating shareholder value, which must be compensated for their investment trust (Hansen, 2005, pp. 125150) The steps that as Nokia we must continue to implement an IMC are: 1. Design of a consistent and transparent business strategy: we must be aware of where we started and where we want to go. The first thing is to know ourselves, analyzing SWOT (Strengths, Weaknesses, Threats, Strengths and Opportunities) 2. Establish a clear distinction between the objectives regarding Nokia structural (Smith, 2004, pp. 183205) 3. Communication strategy: once the roadmap determined following the preliminary assessment should be communicated to Nokia, in order that the whole boat can row in the same direction. The way to communicate is similar to that of any other corporate decision, from top to bottom, i.e. from the steering committee to the technical and administrative staff (Roberts, 2004, pp. 7588) 4. Coordination of objectives : related to the above, departmental objectives must align in order to avoid unwanted conflicts of interest that take the strength of the efforts of Nokia 5. Moving targets budgets , this means moving the qualitative importance of the quantitative importance plans within company budgets 6. Establish metrics and indicators in order to detect deviations from the planning and time to perform various remedial plans to comply in a timely manner with the proposed objectives (Kaplan & Norton, 2004)

    BALANCE SCORECARD FOR NOKIA


    Goals financial stability sustainable growth retention of customers keep them satisfied employee efficiency and effectiveness, technology improvement continuous improvement, employee training, technical efficiency, less cost on technology management Measurement cost reduction, working capital, sales, increased revenues customer service, number of complaints, terms of service, service quality, response time

    Financial perspective Customer Perspective

    Internal perspective

    development time, improvements in the delivery of supplies, motivation and leadership programs

    Innovation and learning perspective

    number of new products and percentage of sales, number of strategic skills learned, alignment of staff goals with the scorecard

    The BSC has the following business benefits: It minimizes information overload. It brings together in one report key elements of Nokia. Prevents traditionally underestimated aspects are key. Correlates several key aspects and displays effects. Several dimensions in a single board.

    With the implementation of the BSC, Nokia will clarify and translate vision and strategy, communicating and linking strategic objectives, plan and identify targets and align strategic initiatives as well as carrying out the strategic feedback and learning for Nokia to perform strategic integration and optimize the performance of the elements involved in business management

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