Introduction

One of the contemporary management accounting tools

that is wide used by the companies around the world is the balanced scorecard (BSC). is no more sufficient. Companies need to focus on nonfinancial accounting measures too. both the financial and non-financial aspects of a firms activities (Sulaiman et. al., 2003).

Additionally, the use of accounting measures to evaluate

That why the used of BSC helps companies to focus on

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Introduction
Therefore base on this understanding, we decided to look

at the balanced scorecard implementation at the Telekom Malaysia Berhad (TM), a company which offers a comprehensive range of communication services and solutions in fixed line, data, mobile and internet, and multimedia in Malaysia.

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Introduction
We interviewed the Human Resource of the corporation;

obtained their BSC process and determine how this process help the organization in planning and controlling purposes as well as for performance measurement purposes.

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TM Profile
From the early days as the Malayan Telecommunications

department in 1946, its corporation in 1987, initial public offering and listing on Bursa Securities in 1990 and its new brand identity in 2005, TM has evolved to become the largest integrated telecommunications solutions provider in Malaysia and one of Asias leading communications companies

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Vision & Mission

Vision of the TM is to be the communications company of choice-focused on delivering Exceptional Value to their customers and other stakeholders. In order to achieve their vision, TM is determined to do the following: Be the recognized leader in all markets we serve Be a customer-focused organization that provides one-stop-total solution

Build enduring relationships based on trust with our customers and partners
Generate shareholder value by seizing opportunities in Asia Pacific and other selected regional markets Be the employer of choice that inspire performance excellence

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TM Group organization structure

The organization is headed by the Group CEO, supported

by the VP Programme Management Office and GM Group Corporation Communication with 10 divisions or departments. Below is a TM Group organization structure:

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Achievement by TM
Telekom Malaysia Berhad (TM) won the Service Provider

of the year award at the 2011 Frost & Sullivan Asia Pacific ICT Awards recently.

It is the first Malaysia operator to receive the honor and

recognizes the companys commitment to the local and regional markets.

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Implementation of BSC
Beside this success there is one tool implemented by TM,

which is BSC. The Balance Scorecard is a very popular tool around the world.

It objective is to translate organizational vision and

strategy into a specific objectives and measures in four main perspectives: finances, customers, internal business processes and learning & growth.

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Scorecard Development Process in TM

Step 1: Step 2: Org. & Industry Develop Assessment The Business Strategic Direction
Assessment of TMs Foundation core beliefs, market opportunities, competition, financial position, short- and longterm goals and an understanding of what satisfies customers. Develop overarching strategic themes that contain specific business strategies. Example Build new business, Improve operational efficiencies.

Step 3: Develop Strategic Objectives

Decompose business strategy into smaller components called objectives which can drive performance and can be measured

Step 4: Create Strategy Map

Step 5: Develop Key Performance Indicators (KPIs)

Step 6: Identify Key Strategic Initiatives

Use cause-effect linkages (if-then logic connections) that shows how an objective (effect) is dependent on another objective (cause) and how taken together, they form a strategic thread from activities to desired outcomes.

Develop KPIs (i.e measures & targets) to track strategic and operational progress. Measures must be meaningful there must be relationship among desired outcomes and the processes used to produce outcomes.

Identify key initiatives to ensure the achievement of the strategic objectives. This include the funding, resource and implementation mechanisms.

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Scorecard Development Timeline in TM

Aug. Dec
Group Finance

Sept.

Oct.
A2. Challenge Meeting (High level strategy alignment)

Nov.

Dec.

Jan.
A4. Communicate Approved Tier 1 KPI to owner

Mar

Apr -

A1. Communicate TM Group Strategic Direction, Strategy Map, Scorecard and Top Down targets to OPCOS and Corporate Centre

A3. Submit Tier 1 KPI for Group Exco Final Approval

Strategy Office/ BSC Driver

C1. Drive The Dev of BP Using BSC Methodology C2. Dev Strategy Map, Scorecard (target and initiatives) and Bottom Up BP

B1. Finalised OPCO / Divisional Strategy Map, Scorecard

B2. Develop Scorecard & KPI for Tier 1

C3. Submit Tier 1 & Tier 2 Scorecard & KPI for MCM Approval

D1. Develop Business Unit Scorecard/ KPI (Tier 2 & Below)

C4. Input/Update Tier 1 & Tier 2 BSC & KPI data & Key Initiative into BSC Online System

C5. Monitor BSC & KPI in BSC Online System

Business Unit
* Business Unit Headed by GM only

E1. Input Business Unit Scorecard / KPI data into BSC Online System*

E2. Monitor BSC & KPI in BSC Online System

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F1. Increase Shareholder Value Financial

Perspective s
F2. Mitigate Fixed DeclineOP2

Grow Revenue Profitably F4. Grow International Business OP4 F5. Grow Revenue of Retained Ventures OP3 Business

Manage Cost Effectively F6. Manage OPEX EfficiencyOP3

TM

F3. Increase Domestic Cellular Business OP2

F7. Manage Assets EffectivelyOP3

Strategy
Customer

Map

3 Delight The Customers And Create Synergy With

Partners External Customer : Home/Personal Enterprise: SME/Corp. Govt. C1. Customer Centric Solution C2. Reliable Services C3. Convenience Partners: (Reseller,Vendor,Govt Agency) C5. Good C4. Win-Win Corporate Partnership Citizen

4 Internal Business Process

IBP1.Turn-around OP2 Fixed IBP2.Turn-around OP2 Celcom IBP5. Improve Critical Business Processes, Quality & Services IBP3. Strategic Regional OP4 Expansion IBP6.Build TM Brand Value

Execution IBP7.Rationalise Ventures OP3 Business IBP9. Ensure Support, Compliance & Influence Regulatory & National Policy IBP8. Improve Cost and OP3 Capital Efficiency IBP10. Perform Corporate Social Responsibility

IBP4. Maximise Group Synergies

Org. Learning & Growth

Boost Human Capital Execution Capacity

OLG1. Intensify Performance OP1 Driven Culture

OLG2. Human Capital & Leadership/ OP1 Talent Development

OLG3. Manpower Optimisation OP1 & Productivity

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BSC Discussion
BSC used as a strategy implementation tool to assist TM in

achieving its business target.

Besides BSC, to gauge employee sentiment on all aspects of

the companys operations, TM carries out a yearly employee satisfaction survey.

They tried to involve the entire employee through the BSC

and KPI by cascaded throughout the organization and monitored through the performance evaluation system for all employees (MAPS-Management Performance System for the personal scorecard).

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BSC Discussion
The key success factor of BSC is competency of the BSC resource

person (the Expert team) in the respective division within corporate centre, OPCOS and subsidiaries.

The Expert team is known as Performance Management Facilitator

that helps in developing BSC for the entire company. Their role is to assist and facilitate the BSC development and KPI cascading within in TM. the TM Group Strategy Map, BSC and KPI with the OPCOS/Divisional and individual KPI.

They also ensure the fairness and uniformity alignment between

Performances Management Facilitator also acts as main resource in

obtain feedback for improvement and communicate shared and common KPI within OPCOS/Divisional.

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BSC Discussion
After implementation of BSC, all executives have to fill

their performance record in a performance evaluation system called MAPS. personal scorecard in MAPS.

All the employees performance is defined based on their

From the discussion, the HR person agreed that BSC has

been used by the organization as performance management tools. This is proven when management will assess the employees performance based on their achievement on their BSC.

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MAPS 2

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MAPS 2

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MAPS 2

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BSC Discussion
For examples, TM has achieved the higher performance of its staff

by using the performance evaluation system (personal scorecard).

The measurement for the performance of each staff can be

evaluated easier so that bonus and other increment will be given to them fairly. harder and show their better performance. The bonus for the nonexecutive is same for every person according to the top management, but the bonus for executives are different depends on their performance evaluation. successfully implemented throughout the organization.
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The bonus and increment actually motivate the staff to work

Finally, the management of TM also believed that recently BSC is

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Problems / challenges
The accountant that we interviewed divided this challenging into 4

different perspectives.
First, the vision barrier - the HR person agreed that the strategy

developed through BSC is not understood by those who must implement it.
Even though, each employees involved in the development of BSC, but sometimes it

difficult to make sure that all the employees understand their role and responsibility.
Besides that, the management also feels that the vision of the organization is not

translated into strategic goals and objectives within corporate centre, OPCOS and subsidiaries.

Second, the people barrier - the personal KPI, goals, knowledge building

and competencies among employees are not linked to strategy implementation of TM.
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Problems / challenges
Finally, the management and operational system.
In TM, management systems are designed for operational control and

tied to budget not the strategy developed. This is not aligned with the idea of implementing BSC.
the key work processes determined in TM are not designed to leverage

the drivers of corporation strategy. For example, the lower level such as management and operational are more focus on the financial that is tied with the budget, for example target revenue and their prospects in the future. They have their own strategy to achieve within different division.
Consequently, it is not tied with the top management strategy because

it was set general. For the lower level, they prefer a specific strategy and easier to understand and achieve.
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Recommendation
TM is facing a lack of commitment, understanding and

communication among their employees.

TM should encourage employee empowerment by

working together with the management.

Eg; set up workshops with employees and management

to translate the strategy and vision into key performance indicator.

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Recommendation
Communication is critical part in implementing BSC and

it difficult to get it right throughout the big organization like TM. management, and top- down commitment, as well as bottom-up input.

Required effective communication among employees and

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Conclusion
Implementing balanced scorecard across the business is attractive

but it is required a mind set change among employees and management. scorecard.

Positive behaviors needed to support the successful of balanced Working together to achieve goals, setting out clear goals and areas

of accountability and responsibility, and implementing a range of hard and soft measures that help to manage the business and drive overall performance improvement.

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