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    06 Balanced Scorecard PDF

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    Deepak Pathania
    The document discusses the Balanced Scorecard (BSC), a strategic planning and management tool. It describes the BSC as translating an organization's mission and strategy into performance measures in four perspectives: financial, customer, internal processes, and learning and growth. The document provides details on how to develop objectives and metrics in each perspective and use them to track progress towards goals. It also discusses strategy mapping, software support, implementation benefits, and the evolution of the BSC approach over time.

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    06 Balanced Scorecard PDF

    Uploaded by

    Deepak Pathania
    343 views4 pages
    The document discusses the Balanced Scorecard (BSC), a strategic planning and management tool. It describes the BSC as translating an organization's mission and strategy into performance measures in four perspectives: financial, customer, internal processes, and learning and growth. The document provides details on how to develop objectives and metrics in each perspective and use them to track progress towards goals. It also discusses strategy mapping, software support, implementation benefits, and the evolution of the BSC approach over time.

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    The document discusses the Balanced Scorecard (BSC), a strategic planning and management tool. It describes the BSC as translating an organization's mission and strategy into performance measures in four perspectives: financial, customer, internal processes, and learning and growth. The document provides details on how to develop objectives and metrics in each perspective and use them to track progress towards goals. It also discusses strategy mapping, software support, implementation benefits, and the evolution of the BSC approach over time.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    343 views4 pages

    06 Balanced Scorecard PDF

    Uploaded by

    Deepak Pathania
    The document discusses the Balanced Scorecard (BSC), a strategic planning and management tool. It describes the BSC as translating an organization's mission and strategy into performance measures in four perspectives: financial, customer, internal processes, and learning and growth. The document provides details on how to develop objectives and metrics in each perspective and use them to track progress towards goals. It also discusses strategy mapping, software support, implementation benefits, and the evolution of the BSC approach over time.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 4

    Warsaw University of Technology Faculty of Production Engineering Institute for Organization of Production Systems

    Introduction to the Balanced ScoreCard what is it?


    The Balanced Scorecard translates an organization's mission and strategy into a comprehensive set of performance measures that provides the framework for a strategic measurement and management system.
    (Kaplan and Norton, 1996)

    OPERATIONS AND PRODUCTION MANAGEMENT


    Balanced Scorecard
    Presented by: MSc. Eng. Bartomiej Gadysz MSc. Eng Aldona Kluczek
    OPMAN exercises A.Kluczek&B.Gadysz

    BSC is a tool developed by Robert Kaplan and David P. Norton.


    0/22 22-Nov-11 OPMAN exercises A.Kluczek&B.Gadysz 1/22

    22-Nov-11

    BSC aims
    To achieve strategic objectives.
    To provide quality with fewer resources. To eliminate non-value added efforts. To align customer priorities and expectations with the customer. To track progress. To evaluate process changes. To continually improve. To increase accountability.
    22-Nov-11 OPMAN exercises A.Kluczek&B.Gadysz 2/22

    Balanced Scorecard
    To achieve our vision, how should to appear to our customers?

    Financial

    To succeed, how should to appear to our shareholders?

    Customer

    Vision

    Business Process
    To satisfy our shareholders and customers, what business processes must we excel at?

    To achieve our vision, how will we sustain our ability to change and improve?

    Development

    Source: R.S. Kaplan, D.P. Norton, Strategiczna karta wynikw (The Balanced Scorecard), Warszawa 2001, p. 28. 22-Nov-11 OPMAN exercises A.Kluczek&B.Gadysz 3/22

    BSC perspectives

    The four perspectives


    Financial Perspective Financial performance Diversity and stability of funding Investment strategy Customer Perspective Customer focus Customer satisfaction Changing customer demands and needs The value of the organization to its customers Customer relationships Organization's image and reputation with customers Innovation & Learning Perspective Employee training Individual and institutional improvement Human resource capabilities Learning capacity Motivation and reward system Information technology and systems capabilities and capacity
    5/22

    Internal Process Perspective Internal business processes Resource allocation and unit cost Quality control Productivity

    Adapted from Kaplan R.S., Norton D.P., Using the Balanced Scorecard as a Strategic Management System, Harvard Business Review (January-February 1996): 76.
    22-Nov-11 OPMAN exercises A.Kluczek&B.Gadysz 4/22

    22-Nov-11

    OPMAN exercises A.Kluczek&B.Gadysz

    Why measure?
    To determine how effectively and efficiently the process or service satisfies the customer. To identify improvement opportunities. To make decisions based on FACT and DATA.

    Measurements should:
    Translate customer expectations into goals. Evaluate the quality of processes. Track our improvement. Focus our efforts on our customers. Support our strategies.
    22-Nov-11 OPMAN exercises A.Kluczek&B.Gadysz

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    OPMAN exercises A.Kluczek&B.Gadysz

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    Targets
    Targets need to be set for all measures Should have a solid basis Give personnel something for which to aim If achieved will transform the organization Careful not to develop measures/targets in a fragmented approach: i.e. Asking people to increase customer satisfaction has to be backed up with the knowledge, tools, and means to achieve that target.

    SMART

    Specified Measureable Ambitious Realistic in Time


    8/22 9/22

    22-Nov-11

    OPMAN exercises A.Kluczek&B.Gadysz

    Initiatives
    Once measures and targets are established, it is the responsibility of management to determine HOW the organization will achieve its goals. Measures are used to determine the effectiveness of strategic initiatives.
    22-Nov-11 OPMAN exercises A.Kluczek&B.Gadysz 10/22

    How to start it?

    22-Nov-11

    OPMAN exercises A.Kluczek&B.Gadysz

    11/22

    Business Process Perspective

    Examples of objectives and measurements

    Goals

    Measures An improvement in delivery time (40%) Half the time of completion of an order ( from 4 days to 2 days) The 10% rise to the end of years

    Example
    Customer Perspective Goals Increase customer satisfaction A rise in participation of regular customers Meetinig the customers` need Measures 85% of surveys rank high satisfaction A 40 % increase of customers 0 of broken contracts

    An improvement in delivery time Shortening the time of completion of an order Investing in a safety of information

    Development Perspective Goals Increase customer satisfaction Staff training Measures A 5 % increase in employment in a company An amount of training hours/one person within one year 2 new products within a year

    Vision and strategy Extending the range of products` offer

    Finance Perspective Goals Net turnover Measures A 30% rise in net turnover compared to last year A decrease in spending by 20% to the end of a year

    Source: http://www.exinfm.com/training/pdfiles/course11r.pdf
    22-Nov-11 OPMAN exercises A.Kluczek&B.Gadysz 12/22 22-Nov-11

    Decreasing expenditure on office

    OPMAN exercises A.Kluczek&B.Gadysz

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    Strategy mapping BSC 2nd generation

    The Balanced Scorecard in practice

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    OPMAN exercises A.Kluczek&B.Gadysz

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    OPMAN exercises A.Kluczek&B.Gadysz

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    Why implement the Balanced Scorecard?


    Increase focus on strategy and results Improve organizational performance by measuring what matters Align organization strategy with the work people do on a day-today basis Focus on the drivers of future performance

    BSC software support

    BSC Designer Improve communication of the organizations vision and strategy Prioritize projects / Initiatives
    22-Nov-11 OPMAN exercises A.Kluczek&B.Gadysz 16/22

    List of ca. 100 software vendors


    22-Nov-11 OPMAN exercises A.Kluczek&B.Gadysz 17/22

    BSC few facts


    Cranfield Uni. >50%of large enterprises use BSC

    BSC few facts


    Balanced Scorecard Forum 80% of organizations using BSC reported improvements in operating performance 66% of these organizations reported an increase in profits

    Balanced Scorecard Collaborative

    95% of typical workforce does not understand its organizations strategy 90% of organizations fail to execute their strategies successfully 86% of executive teams spend less than one hour per month discussing strategy 70% of organizations do not link middle management incentives to strategy 60% of organizations do not link strategy to budgeting

    Bain & Co

    ca. 70% of organizations had at least partially implemented a balanced scorecard by 2006 50% of Fortune 1,000 companies are using BSC

    Microsoft Business Intelligence Conference


    22-Nov-11

    30% of companies think that the most important to their company today is performance management

    Source: http://www.bscdesigner.com/balanced-scorecard-fact-sheet.htm
    22-Nov-11 OPMAN exercises A.Kluczek&B.Gadysz 18/22

    Source: http://www.bscdesigner.com/balanced-scorecard-fact-sheet.htm
    OPMAN exercises A.Kluczek&B.Gadysz 19/22

    Evolution
    2nd generation strategy map, links between objectives

    References
    1. Balanced Scorecard Basics, Balanced Scorecard Institute 2008 2. Chen C.-H., Chou S.-Y., A BSC Framework for Air Cargo Terminal Design: Procedure and Case Study, Journal of Industrial technology, Vol. 22, No. 1, http://atmae.org/jit/Articles/chen021606.pdf 3. Kaplan R., Norton E., The Balanced Scorecard, Harvard Business Publishing, 1998. 4. Kaplan R., Norton E., The Strategy-Focused Organization, Harvard Business Publishing, 2001 5. Shanahan Y.P., Proctor Plumbing Limited: A Case Study Of The Balanced Scorecard (BSC), Journal of Business Case Studies 4th Qtr 2006, Vol. 2, No. 4, http://www.cluteinstitute-onlinejournals.com/PDFs/200628.pdf 6. http://www.balancedscorecard.org/BSCResources/AbouttheBalancedScorecard/tabid/55/ Default.aspx 7. Case studies: a. http://www.2gc.co.uk/resources-casestudies b. http://www.balancedscorecard.org/LinkClick.aspx?fileticket=tOmjwPcVlUQ%3D&tabi d=36 c. http://www.balancedscorecard.org/LinkClick.aspx?fileticket=LS4KXycFC%2B8%3D&t abid=56 d. http://www.bscdesigner.com/case-studies e. http://www.excitant.co.uk/pages/case_studies_access.htm f. http://www.exinfm.com/training/pdfiles/course11r.pdf g. http://www.tefkuwait.com/photos/sem121107/handout/NovaScotiaPowerBSC.pdf
    22-Nov-11 OPMAN exercises A.Kluczek&B.Gadysz 21/22

    1st generation only list of metrics


    Ari Schneiderman - 1st BSC
    22-Nov-11

    3rd generation destination statement, framework for drawing links

    OPMAN exercises A.Kluczek&B.Gadysz

    20/22

    Team work
    1.Join Your team. 2.List objectives for each strategic perspective. 3.List measures for each objective. 4.List targets for each measure 5.Draw sketch of BSC for Rockford. 6.Show sketch and improve it at home. 7.Incorporate BSC in final paper.

    Thank you for your time!

    22-Nov-11

    OPMAN exercises A.Kluczek&B.Gadysz

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    22-Nov-11

    OPMAN exercises A.Kluczek&B.Gadysz

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