balanced score card 602 168

8/8/2019 Balanced Score Card 602 168

1/12

BALANCED SCORECARD

Amit Kumar


2/12

Less than 10% of strategies

effectively formulated are

effectively executedFortune

Less than 60% of the senior managers

and less than 10% of the employees

think they have a clear understanding

of their company strategy

Cedar / Business Intelligence

Strategic Management Survey 97

The corporate challenge :

implementing business strategy fast


3/12

The Vision Barrier

Strategy is not understood

by those who must

implement it

The People

Barrier The Management Barrier

Personal goals, Management systems are

incentives and designed for operational control

competencies are not and little time is spent on strategy

linked to strategy

The Operational Barrier

Budgeting process is separated

from strategic planning

Strategy

Our research has identified four barrier to strategic implementation

that are built into the way we manage


4/12

What is Balanced Scorecard ?

A Balanced Scorecard is a framework that focuses on

shareholder, customer, internal and learning requirementsof a business in order to create a system of linked

objectives, measures, targets and initiatives which

collectively describe the strategy of an organization and

how that strategy can be achieved .

A Balanced Scorecard is a framework that focuses on

shareholder, customer, internal and learning requirementsof a business in order to create a system of linked

objectives, measures, targets and initiatives which

collectively describe the strategy of an organization and

how that strategy can be achieved .


5/12

Vision

"If we succeed, ho Profitability

will we look to our Growth

shareholders?" Shareholder

Value

"To achieve our Price

vision, how must Service

*Measurement is the language we look at our Quality

that gives clarity to vague customers?"

concepts

*Measurement is used to "To satisfy our Cycle Time

communicate, not simply to customers,what Productivity

control management Costprocesses must we

*Building the Scorecard excel at?"

develops consensus and

teamwork throughout the

organization

"To achieve our Market Innovation

vision,how must Continuous Learning

our organisation Intellectual Assets

learn and

improve?"

Organisation Development

Financial Perspective

Customer Perspective

Internal Perspective

The Balanced Scorecard provides a four perspective framework to

formulate strategy and translate it into operational terms


6/12

Initiatives and Actions

"How do we look to

our shareholders?"

"How do we look "What business

to our customers?" processes are the

value drivers?"

"Are we able to

sustain innovation,

change

& improvement?"

Learning

BusinessProcesses

CustomerPerspective

Organisation

Balanced Scorecard

Vision

Translate the Vision Develop and Align

Financial

Perspective

Shareholder

Value

Activity

Based

CostingCustomer

Satisfaction

BPR

Jobs of

the futureTime based

MgmtI /T

Empowered

Total

Quality

Core

Competencie

Core Process

Organisation

ContinuousImprovement

The Balanced Scorecard makes the strategy operational..


7/12

Outcome Measures Performance Drivers

Financial Return on Investment Revenue Mix

Perspective Revenue Growth

Customer Customer Satisfaction Survey Depth of Relation

Perspective Customer Retention

Internal Share of Segment Product Development Cycle

Perspective New Product Revenue Hours with customers

Cross-Sell Ratio

Learning & Revenue per employee Strategic Skills

Growth Employee Satisfaction Strategic Information

Perspective Personal Goals Aligned

The Scorecard contains a balance between outcome measures

and performance drivers


8/12

NET PROFITSROI,EVA OPERATING PROFIT

ROCE (PBDIT)

- Working Capital Cost Interest & Long Term

- Cash to cash cycle Loan Repayment

Sales Volume & - Risk Management

Revenue & Margins

PRICE -Manufacturing & ProcurementFINANCIAL Productivity

(Growth : ROCE - Cost Management Vs Competition

Sustain:ROI,EVA,ROCE Sales Growth by Customers/Segments/Product Groups - Capacity & Asset Utilisation

Divest/Harvest:Cash Flow Margins Growth by Customers/Segments/Product Groups - Manpower Cost

"If we succeed, how will we

look to our shareholders?" - Technology Tie Up / Upgradation- R&D Investments (%age of Sales )


9/12

Market Share Account or Category Share

Customer Retention Value Propositions

- New Customer Acquisition - Product Quality & Distribution

- Customer Satisfaction - Q.C.D

- Customer Profitability - Customer Relation

- Customer Response

- Brand/Image/Reputation/Trust

CUSTOMER - Customer Problem Solving

MARKET SEGMENTATION OTHERS

- Domestic / Exports - New Applications

- Products - Order Servicing Time / Reliability

- Customers - Cycle time / Speed

- Product Return Rate

- New Product Dev. Speed / Range

" To achieve our vision, how must we

look to our customers?"


10/12

DEMAND GENERATION TO DEMAND FULFILLMENT PROCESS

1 Inventory Turnover 14 Project Management Process

2 Cash to cash cycle time 15 Talent Search/Leadership Dev. Process

3 Procurement Process 16 Recruitment Process

Product Dev. Process/ New Product / 17 Manpower Planning

4 New Product Introduction/Nos/Type/Speed Employee Communication & Involvement

5 SBP /Budgeting/MIS Process 18 Process

INTERNAL Product Management/ Branding & Sales 19 Negotiating Processes

PROCESSES 6 Promotion Process / Advertising 20 Outsourcing Processes7 CRM Process 21 Dealer Selection Processes

8 Commercial Term & Process 22 Customer Satisfaction Process

9 Costing Process (Activity based Costing ) 23 Employee Satisfaction Process

10 Order Tracking Process (Air freight/DHL type) 24 Incentive Schemes

11 PMS (Clarity of Goals/Targets/A/Cs / 25 Reward & Recognition Process

Review Quality/Deliver/Cost/Response Time/Order

12 Delivery Process (TQM/TPM/Six SIGMA)

13 Lean/Flexible Mfg. Process

" To satisfy our customers, what management

processes must we excel at ?"


11/12

- Shared Vision/Mission/Buy-In/Involvement/ Communication Effectiveness

- Competencies of Key Positions & Functions ( Develop / Buy )

- Leadership Styles

- Knowledge/ Skills/ Attitudes ( Technical , Managerial , Behavioral )

- Quality of MCS / Workmen

- Employee Motivation & Satisfaction/ Commitment/ Ownership/ Empowerment

- Organisational Climate / Culture

- Sales Staff Motivation

PEOPLE - Employee Productivity

COMPETENCIES & - Sales Staff Technical Competencies

MOTIVATION + - Team Work

WORK CLIMATE - Socialisation

- Delegation & Empowerment

- HRIS

- Rewards & Recognition

- Organisation Structure ( Nos/ Capability/ Quality)

- ESS

- ARM ( Attract,Retain, Motivate Talent)

"To achieve our vision, how must our

organisation learn and improve?"


12/12

THANK YOU

balanced score card 602 168

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