discuss about tm malaysia balance scrore card

8/12/2019 discuss about TM Malaysia balance scrore card

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2004 Innovation Associates All Rights Reserved

N & SAConsul tancy

Introduction

One of the contemporary management accounting tools

that is wide used by the companies around the world isthe balanced scorecard (BSC).

Additionally, the use of accounting measures to evaluateis no more sufficient. Companies need to focus on non-financial accounting measures too.

That why the used of BSC helps companies to focus onboth the financial and non-financial aspects of a firmsactivities (Sulaiman et. al., 2003).


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Introduction

Therefore base on this understanding, we decided to look

at the balanced scorecard implementation at the TelekomMalaysia Berhad (TM), a company which offers acomprehensive range of communication services andsolutions 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 thisprocess help the organization in planning and controllingpurposes as well as for performance measurementpurposes.


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TM Profile

From the early days as the Malayan Telecommunications

department in 1946, its corporation in 1987, initial publicoffering and listing on Bursa Securities in 1990 and itsnew brand identity in 2005, TM has evolved to becomethe largest integrated telecommunications solutions

provider in Malaysia and one of Asias leadingcommunications companies


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Vision & Mission

Vision of the TM is to be the communications company ofchoice-focused on delivering Exceptional Value to their

customers and other stakeholders. In order to achieve theirvision, 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-totalsolution

Build enduring relationships based on trust with our customersand partners

Generate shareholder value by seizing opportunities in AsiaPacific 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 GMGroup Corporation Communication with 10 divisions ordepartments. Below is a TM Group organizationstructure:



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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 populartool around the world.

It objective is to translate organizational vision andstrategy into a specific objectives and measures in four

main perspectives: finances, customers, internal businessprocesses and learning & growth.



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Scorecard Development Process in TM

Assessment of

TMs Foundation

core beliefs,

market

opportunities,competition,

financial position,

short- and long-

term goals and

an understanding

of what satisfies

customers.

Develop

overarching

strategic themes

that contain

specific business

strategies.

ExampleBuild

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 1:

Org. & IndustryAssessment

Step 2:

DevelopThe Business

Strategic

Direction

Step 4:

Create

Strategy

Map

Use cause-effectlinkages (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

relationshipamong 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.

Step 5:

Develop Key

Performance

Indicators

(KPIs)

Step 6:

Identify

Key Strategic

Initiatives



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A1. CommunicateTM GroupStrategicDirection,

Strategy Map,Scorecard and

Top Down targetsto OPCOS and

Corporate Centre

A2. Challenge

Meeting (Highlevel strategyalignment)

A3. SubmitTier 1 KPI for

GroupExco FinalApproval

GroupFinance

B2. DevelopScorecard &KPI for Tier 1

Strategy

Office/BSCDriver C2. Dev

Strategy Map,Scorecard

(target andinitiatives) andBottom Up BP

BusinessUnit

C1. Drive TheDev of BPUsing BSC

Methodology

D1. DevelopBusiness Unit

Scorecard/ KPI(Tier 2 & Below)

C4. Input/UpdateTier 1 & Tier 2 BSC& KPI data & KeyInitiative into BSC

Online System

C5. MonitorBSC & KPI inBSC Online

System

E1. Input BusinessUnit Scorecard /

KPI data into BSCOnline System*

E2. MonitorBSC & KPI inBSC Online

System

B1. FinalisedOPCO /

DivisionalStrategy

Map,Scorecard

C3. SubmitTier 1 & Tier

2 Scorecard &

KPI for MCMApproval

* Business Unit Headed by GM only

A4.CommunicateApproved

Tier 1 KPI toowner

Aug. Sept. Oct. Nov. Dec. Jan. Mar Apr -Dec

Scorecard Development Timeline in TM


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TM

Strategy

Map

IBP2.Turn-aroundCelcom

IBP1.Turn-aroundFixed

IBP3. StrategicRegionalExpansion

IBP8. ImproveCost andCapitalEfficiency

IBP7.RationaliseVenturesBusiness

IBP9. Ensure Support,Compliance & InfluenceRegulatory &National Policy

IBP6.Build TMBrand Value

Execution

IBP10. PerformCorporate SocialResponsibility

IBP5. ImproveCritical BusinessProcesses, Quality& Services

IBP4. MaximiseGroupSynergies

4

Grow RevenueProfitably

Manage CostEffectively

F3. IncreaseDomestic CellularBusiness

F1. Increase Shareholder Value

F7. ManageAssetsEffectively

F2. MitigateFixedDecline

F4. GrowInternationalBusiness

F6. ManageOPEXEfficiency

1 2

F5. Grow Revenueof RetainedVentures

Business

Financial

Customer

Internal

Business

Process

Org

.

Learnin

g

&Growt

h

Perspective

s

Boost Human Capital Execution Capacity

OP2 OP2 OP3 OP3OP4

5

OLG2. Human Capital& Leadership/TalentDevelopment

OLG1. IntensifyPerformanceDriven Culture

OLG3. ManpowerOptimisation& Productivity

OP1 OP1OP1

OP2OP2 OP3 OP3OP4 OP3

External Customer : Home/Personal Enterprise: SME/Corp. Govt.

C1. CustomerCentric Solution

C3. Convenience

Delight The Customers And Create Synergy WithPartners

C2. ReliableServices

C4. Win-WinPartnership

C5.GoodCorporateCitizen

Partners: (Reseller,Vendor,GovtAgency)

3


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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 BSCand 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 resourceperson (the Expert team) in the respective division within

corporate centre, OPCOS and subsidiaries.

The Expert team is known as Performance Management Facilitatorthat helps in developing BSC for the entire company. Their role isto assist and facilitate the BSC development and KPI cascadingwithin in TM.

They also ensure the fairness and uniformity alignment betweenthe TM Group Strategy Map, BSC and KPI with theOPCOS/Divisional and individual KPI.

Performances Management Facilitator also acts as main resource inobtain feedback for improvement and communicate shared andcommon 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 evaluationsystem called MAPS.

All the employees performance is defined based on theirpersonal scorecard in MAPS.

From the discussion, the HR person agreed that BSC hasbeen used by the organization as performancemanagement tools. This is proven when management

will assess the employees performance based on theirachievement on their BSC.


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MAPS 2

MAPS 2


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MAPS 2

MAPS 2


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MAPS 2

BSC Di i


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BSC Discussion

For examples, TM has achieved the higher performance of its staffby using the performance evaluation system (personal scorecard).

The measurement for the performance of each staff can beevaluated easier so that bonus and other increment will be given tothem fairly.

The bonus and increment actually motivate the staff to workharder and show their better performance. The bonus for the non-executive is same for every person according to the topmanagement, but the bonus for executives are different depends ontheir performance evaluation.

Finally, the management of TM also believed that recently BSC issuccessfully implemented throughout the organization.

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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 alsofeels that the vision of the organization is not

translated into strategic goals and objectiveswithin corporate centre, OPCOS and

subsidiaries.

Second, the people barrier- the personal KPI, goals, knowledge buildingand 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 andtied to budget not the strategy developed. This is not aligned with theidea of implementing BSC.

the key work processes determined in TM are not designed to leveragethe drivers of corporation strategy. For example, the lower level such

as management and operational are more focus on the financial that istied with the budget, for example target revenue and their prospects inthe future. They have their own strategy to achieve within differentdivision.

Consequently, it is not tied with the top management strategy becauseit was set general. For the lower level, they prefer a specific strategyand easier to understand and achieve.

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Recommendation

TM is facing a lack of commitment, understanding andcommunication among their employees.

TM should encourage employee empowerment byworking together with the management.

Eg; set up workshops with employees and management

to translate the strategy and vision into key performanceindicator.

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Recommendation

Communication is critical part in implementing BSC and

it difficult to get it right throughout the big organizationlike TM.

Required effective communication among employees andmanagement, and top- down commitment, as well as

bottom-up input.

C lu i


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Conclusion

Implementing balanced scorecard across the business is attractivebut it is required a mind set change among employees andmanagement.

Positive behaviors needed to support the successful of balancedscorecard.

Working together to achieve goals, setting out clear goals and areasof accountability and responsibility, and implementing a range ofhard and soft measures that help to manage the business and driveoverall performance improvement.

discuss about tm malaysia balance scrore card

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