Balanced Scorecard and its relationship to UMM

P.G. Punchihewa, G.N. Wikramanayake, D.D. Karunaratna University of Colombo School of Computing

1. Introduction In order to facilitate e-commerce communication, many standardisation activities have been initiated in the industry. One of the most influential standardisation efforts, which enable enterprises to search for information efficiently and accurately, establish agreements, and carry out business transactions, is ebXML [1]. UN/CEFACT Modelling Methodology (UMM) [2] describes a method and supporting components, to capture business knowledge, independent of the underlying implemented technology so that the business acumen is retained and usable over generations of implemented technology. Today organisations are competing in dynamic, complex environments. An accurate understanding of their objectives and the methods for quickly achieving those objectives is vital. The Balanced Scorecard [3] is a revolutionary tool that motivates staff to make the organisation’s vision happen. The mapping of the performance measurement and management tool ‘Balanced Scorecard’ using UMM concepts is described here. 2. Balanced Scorecard The Balanced Scorecard does more than just measure performance. It is a management system that focuses the efforts of people, throughout the organisation, towards achieving strategic objectives. It gives feedback on current performance and targets future performance. This strategic management approach translates a vision into a clear set of objectives or critical success factors.

Measures in the Balanced Scorecard are used in four broad areas - financial, customer, internal business processes, and learning and growth of an organisation. The Balanced Scorecard can also be used to test, gain feedback on, and update the organisation’s strategy. It goes beyond short-term management of the bottom line to providing a management system for long-term investment in customers, employees, new product development and systems. 3. UN/CEFACT Modelling Methodology UMM is organised into four main views, namely business operations map (BOM), business requirement view (BRV), business transaction view (BTV) and the business service view (BSV). The BOM of a business process model specifies the use case scenarios, input and output triggers, constraints and system boundaries for business areas, business processes, business collaboration protocols, business transactions and their interrelationships. For example financial, production & sales, purchases, marketing, research & development and management are examples of general business areas, while budgeting & variance analysis, creating financial statements, payroll, authorising payments, management debtors and treasuryship are the process areas of financial. The BOM partitions business processes into business areas and business categories. The BRV represents the process areas applicable to each business area, with an increase in the level of detail such as the inclusion of Category Schema, Category, Objective, Scope and Business justification for each business process area.

BTV captures the semantics of business information entities, inputs, outputs and their flow of exchange between roles as they perform business activities. For every process areas identified above, the relevant business processes are identified. Using activity diagrams the workflow of each business process is explicitly depicted. BSV incorporates the view of a business process model, so that it specifies the network component services and agents and their message interactions. In the context of mapping the processes into the relevant components of the Balanced Scorecard, the BSV is outside the scope of the work presented here. 4. Mapping of Business Processes The business processes and objectives identified are mapped to the pertinent Balanced Scorecard component. Table below identifies the Balanced Scorecard component for some business processes. Business Process Balanced

Scorecard Component

Budgeting & variance analysis

Internal Business

Creating financial statements

Financial

Managing debtors Financial Treasuryship Financial Customisation product Customer Stock management Internal

Business Introduce new product Customer Existing product marketing

Customer

Pure research Growth Applied research Growth Identifying business opportunities

Growth

5. Implementation The Balanced Scorecard software system was implemented using Java language and

the Jbuilder development tool, while MS SQL server was used as the back-end database. Out of the many measurements identified above, the measurements that could be implemented were identified and used in the respective Balanced Scorecard components. They are Financial: debtor analysis, interest rate yield curve, portfolio management, ratio analysis; Internal Business: variance analysis, stock management; Customer: market share, product life cycle; Growth: ratio analysis. 6. Conclusion The Balanced Scorecard in the relation to UMM would enable an organisation to assess its strategic objectives by means of usage of software and thus it is left that this work would be a precursor to future work encompassing knowledge of both information technology and management fields. 7. Acknowledgements Contributions made by Mr. Anders W. Tell and the Open ebXML laboratory members of University of Stockholm are acknowledged. 8. References 1. About ebXML. www.ebXML.org 2. UMM chapters.

www.ebtwg.org/projets/documentation/bioreference/pdf/

3. What is the Balanced Scorecard? www.balancedscorecard.org/basics/bsc1.ht