Hi....you should read article or book about Balance Score Card (BSC). Make a report about what you have learned from that article or book. Remember, every one is different! Please post here the resource you used, before some body else post it here.
AP
73 comments:
Eka Praswati
C1L007002
Article : “Balance Scorecards Explanation, Examples, Aims, Implementation and Teaching Aid Diagram for The Concept”
A Balanced Scorecard approach is to take a holistic view of an organization and co-ordinate MDIs so that efficiencies are experienced by all departments and in a joined-up fashion. To embark on the Balanced Scorecard path an organization first must know (and understand) the following:
The company's mission statement
The company's strategic plan/vision
Then
The financial status of the organization
How the organization is currently structured and operating
The level of expertise of their employees
Customer satisfaction level
Once an organization has analysed the specific and quantifiable results of the above, they should be ready to utilise the Balanced Scorecard approach to improve the areas where they are deficient. The metrics set up also must be SMART (Specific, Measurable, Achievable, Realistic and Timely) - you cannot improve on what you can't measure! Metrics must also be aligned with the company's strategic plan.
A Balanced Scorecard approach generally has four perspectives:
Financial
Internal business processes
Learning & Growth (human focus, or learning and development)
Customer
Each of the four perspectives is inter-dependent - improvement in just one area is not necessarily a recipe for success in the other areas.
SMARA WURI L.D
C1L007003
ARTICLE: Balance Scorecard
Resource : Robert S. Kaplan,David P. Norton
NITA INDRAYANI
C1L007044
Article : "Use Balanced Scorecard for Strategic Management"
by: Roger level
Nur Hikmag S
C1L007053
Resources: article (http://www.ap-institute.com/Balanced%20Scorecard%20management%20not%20measurement.html)
"Balanced Scorecard: management not measurement"
The Balanced Scorecard is a strategic performance management tool designed for managing strategic performance and not only as a measurement and reporting tool. The process of strategic performance management consists of four critical processes:
Clarifying and Translating the Vision and Strategy
The process of identifying the strategic objectives and visualising them in a Strategy Map is the starting point for any Balanced Scorecard implementation.
Communicating and Linking the Strategic Objectives and Measures
A two-way communication system should be put in place to encourage dialogue between the business units and executive management in order to engage people in the strategy process and to allow feedback.
Planning and Target Setting, and Aligning Strategic Initiatives
The target setting process is best done in the context of the strategic initiatives and projects that are linked to each of the strategic objectives. Targets should take into account causal-and-effect lag times and should be stretching but achievable.
Enhancing Strategic Feedback and Learning
This process is the most important aspect of the entire scorecard management process. It is important to put processes in place which enable managers to learn from their performance information and improve their future decision making.
ADRIANSYAH
C1L007041
Article : BALANCE SCORECARD
Article quoted from : Wikipedia
Resource : http://en.wikipedia.org/wiki/Balanced_scorecard
A Balanced Scorecard (BSC) is a strategic performance management tool for measuring whether the smaller-scale operational activities of a company are aligned with its larger-scale objectives in terms of vision and strategy.
Point of interest from my opinion: The Balance score card is not only focusing on financial outcomes but also on the operational, marketing and developmental inputs to these, the Balanced Scorecard helps provide a more comprehensive view of a business, which in turn helps organizations act in their best long-term interests. This tool is also being used to address business response to climate change and greenhouse gas emissions.
This article for : Providing more view effort of business in some organization were encouraged to measure, in addition to financial outputs, those factors which influenced the financial outputs. For example : In the company monitoring the process of performance, market share / penetration, long term learning and skills development. And the early versions of the Balanced Scorecard helped organizations achieve a degree of "balance" in selection of performance measures. In practice, early Scorecards achieved this balance by encouraging managers to select measures from three additional categories or perspectives: "Customer," "Internal Business Processes" and "Learning and Growth."
Rasyadinda P. G.
C1L007051
"Performance Assessment with the Balanced Scorecard Approach in Public Sector Organization (Hospital)"
The concept of performance measurement with the balanced scorecard is a performance measurement concept that does not use a single indicator in assessing the performance of an organization. Performance measures that only look at the financial aspect alone is not relevant in decision making, because the measures (indicators) are not considered financial proactive against potential problems such as operational issues (nonfinancial indicators). Financial and nonfinancial measures is very important and is a unit of mutual support and can reflect the overall organizational performance.
Balanced scorecard is a concept of performance measurement that describes the organization in a comprehensive state of the organization and coherent, so it can be used to support the strategic implementation stage. Each organization's strategic management process by setting the vision, mission and strategy to be achieved to develop the organization. Organization's mission is the establishment of an organization's goals and vision of the organization is a picture of the future and the present is to be achieved. Vision and mission that has been determined at a later elaborated in the strategic target of four balanced scorecard perspectives. Vision and mission of the organization that are not profit-oriented (public sector) to be a driving force for the performance of the organization better. Public sector is the source of the assessment in this report is a hospital.
1. Financial Perspektif
In the public sector, this perspective explains about what is expected by the government and other stakeholders to provide long-term resources related to financial performance. Financial perspective on the measurement of hospital performance can be measured by conducting surveys of the heads of each hospital on its financial performance, the use of funds, revenue, expenses and compliance with budgets.
2. Customer Perspektif
This perspective is the way customers look at us (the organization) and how we see the customer. The size of the customer perspective is used to measure how well the organization in meeting customer demand and needs and then doing the anticipation of what is required by the customer in the future. This perspective is the most important element of organizational performance measurement process that is not profit-oriented. In relation to health services provided by hospitals in this customer's perspective, some things to consider include: the action taken so that the customer (patient) satisfaction of the health services provided, settlement and provided feedback if there are complaints or complaints from customers , fulfillment of customer expectations. This perspective, if done properly and well, it will support the achievement of financial performance. This perspective is an indicator of how customers see the organization and how organizations look at them.
Rasyadinda P. G.
C1L007051
3. Internal Business Process Perspektif
Internal process is the mechanism / framework and tools to link customer satisfaction (patients) with a strategy of internal resource allocation and decision making within the organization. This process can be evaluated with a series of indicators such as surveys of patients regarding the administration and health services, technology, employee attitudes, communication with staff, timeliness of health services and others.
4.Learning and Growth Perspektif
This aspect is seeing the ability of employees, the quality of information systems, technological processes, the effect of aligning the organization in supporting the achievement of goals and objectives. This perspective is focused on improving the organization's ability to meet customer expectations. This process can work well if there is accurate information and timely. This perspective includes an indicator of how far the benefits of new development and how this can contribute to success in the future.
In principle, the four perspectives in the balanced scorecard is a unit of interconnected and influence. Three non-financial perspective of the customer perspective, internal business perspective, and learning and growth perspective is the perspective of supporting the achievement of financial and business continuity. For organizations or for-profit business, achieving financial perspective is the final destination and keep the company's survival.
Reference:
Roberstone, G., 2002. “Lokakarya Review Kinerja Pemerintah” Makalah.
Nurbahtiar, 2003., Pengukuran Kinerja Dengan Pendekatan Balanced Scorecard Pada Rumah Sakit Pemerintah dan Swasta Di Kota Kendari, Sulawesi Tenggara, Publikasi Perpustakaan, Yogyakarta.
Ganjar B. P.
C1L007031
”Balane Scorecard for Study of patient’s Expectations and Satisfaction in Singapore Hospitals”
Balance scorecard covers various aspects 4, including:
1. Financial Perspektif
Financial perspective on business organizations can be measured by looking at ROA, ROI from enterprise business.
2. Customer Perspektif
This perspective is the way customers look at us (the organization) and how we see the customer. , There are five main aspects of this perspective is the measurement of market share, customer retention, customer acquisition, customer satisfaction, customer prifitability.
This perspective is an indicator of how customers see the organization and how organizations look at them. Indicators used to assess the organization how customers looked is the level of customer satisfaction that can be known through customer surveys, attitude and their behavior can be identified from the complaints they made.
3, Internal Process Perspektif
This perspective is the ability of the organization in the service process to meet customer expectations. This perspective includes indicators of quality, delivery time, waiting time and so on. This indicator allows to find out and determine whether the process has experienced an increase or reach the target goal.
4.Perspektif Learning and Growth
In this perspective there are several important dimensions that must be considered the ability of employees, technological capabilities and information systems, motivation, empowerment and limitation of authority. This perspective is focused on improving the organization's ability to meet customer expectations.
Hospital as an example of public sector organizations that provide services to the community. These organizations together with government organizations as a whole is intended to provide optimal service and satisfaction for users of their services. Success indicators of health service organizations have the same characteristics with the public sector organizations in general. Balanced scorecard approach can be used as a management tool to measure the performance of health service organizations.
Ganjar B. P.
C1L007031
Performance measurement of health service organizations, among others made by Lim and Tang (2000), which examined patient satisfaction and patient expectations in Singapore, to evaluate the balanced scorecard approach to performance measurement multidimensional nine hospitals based on Medicare reports. The results of this study indicate that the size of the 9 tested and evaluated (cash flows, asset turnover, mortality, complication, Inpatient length of stay, boarding each case, occupancy, change in occupancy, and percentage of revenue from outpatient care) , there are 7 measures (cash flow, asset turnover, mortality, complication, Inpatient length of stay, boarding per case, and the percentage of revenue from outpatient cure), which is very useful for use in evaluating the performance of hospitals in the U.S. and this measure shows the performance U.S. hospitals and identify opportunities that exist, making the organization more useful.
Referens:
Lim, P.C, dan Tang Nelson K.H, 2000. ”A Study of patient’s expectations and satisfaction in Singapore hospitals”, International Journal of Health Care Quality Assurance, 13/7.
Ganjar B. P.
C1L007031
Performance measurement of health service organizations, among others made by Lim and Tang (2000), which examined patient satisfaction and patient expectations in Singapore, to evaluate the balanced scorecard approach to performance measurement multidimensional nine hospitals based on Medicare reports. The results of this study indicate that the size of the 9 tested and evaluated (cash flows, asset turnover, mortality, complication, Inpatient length of stay, boarding each case, occupancy, change in occupancy, and percentage of revenue from outpatient care) , there are 7 measures (cash flow, asset turnover, mortality, complication, Inpatient length of stay, boarding per case, and the percentage of revenue from outpatient cure), which is very useful for use in evaluating the performance of hospitals in the U.S. and this measure shows the performance U.S. hospitals and identify opportunities that exist, making the organization more useful.
Referens:
Lim, P.C, dan Tang Nelson K.H, 2000. ”A Study of patient’s expectations and satisfaction in Singapore hospitals”, International Journal of Health Care Quality Assurance, 13/7.
PUJI ASTUTI MW
C1L007047
ARTICLE : "THE BALANCE SCORECARD PERFORMANCE IMPROVEMENT-USING THE BALANCE SCORECARD TO COMBINE TO COMBINE VIEWPOINT OF COMPANY SUCCESS
BY DAVID CHAUDRON
PUJI ASTUTI MW
C1L007047
ARTICLE : "THE BALANCE SCORECARD PERFORMANCE IMPROVEMENT-USING THE BALANCE SCORECARD TO COMBINE TO COMBINE VIEWPOINT OF COMPANY SUCCESS
BY DAVID CHAUDRON
What is the balanced scorecard?
The balanced scorecard is just remedy for this kind of problem. First of all, the balanced scorecard is a way of:
· measuring organizational, business unit or department success
· balancing long-term and short-term actions
· balancing different measures of success
· Financial
· Customer
· Internal Operations
· Human Resource Systems & Development (learning and growth)
· A way of tying strategy to measures to action
Four Kinds of Measures
Under the balanced scorecard system, financial measures are the outcome, but do not give a good indication of what is or will be going on in the organization. Measures of customer satisfaction, growth and retention is the current indicator of company performance, and internal operations(efficiency, speed, reducing non-value added work, minimizing quality problems) and human resource systems and development are leading indicators of company performance.
IKA APRILANDINI
C1L007040
MCS ASSIGNMENT
Article : 'Balanced scorecards make teamwork a reality'
http://findarticles.com/p/articles/mi_qa3616/is_199711/ai_n8759569/
Journal for Quality and Participation, The, Nov/Dec 1997,
by : Abernathy, William
The basic concept of the balanced scorecard is this: a company's strategic plan should be translated to a set of specific, objective requirements (metrics on a scorecard) that are reviewed monthly. To balance the factors, or metrics, the scorecard should include both financial and non-financial metrics that reflect the overall business strategy. For example, an organization's strategic goals might be:
1) To achieve the net-income budget.
2) To improve return on assets.
3) To improve customer satisfaction and retention.
4) To increase market penetration.
5) To install a new inventory system.
In designing a balanced scorecard, Step One is to translate the strategy into concrete factors that can be reported monthly.
Step Two is to assign priority weights to each requirement on the scorecard.
Step Three is to assign a base and goal to each criteria.
Step Four is to add sub-goal intervals to the scorecard that recognize incremental improvements toward the goal.
The organizational scorecard can serve as the starting point for a company-wide performance improvement system that pinpoints each department's key contributions to the overall strategy. Such a scorecard would align all employees with the organization's strategy, focusing employees on critical results that drive the strategy.
NITA INDRAYANI
C1L007044
Article : "Use Balanced Scorecard for Strategic Management"
Resources : http://strategic-business-planning.suite101.com/article.cfm/use_balanced_scorecard_for_strategic_management
By: Roger Lever
The Balanced Scorecard is a tool that allows a business to translate its vision and strategy into action. It was developed by Robert S Kaplan and David P Norton. The Balanced Scorecard is not the only tool that can be used for strategic management, however, it is both effective and popular. By linking the business strategies so clearly to the strategic plans it is much easier to see whether those initiatives align with strategy and to unite staff. Strategy maps can be used to help develop the balanced scorecard.
Balanced Scorecard for Strategic Management
The Balanced Scorecard framework is a tool that structures and links the strategies to operational implementation in four areas.
1. Financial – financial measures such as profitability, sales growth, productivity or return on investment
2. Customer - customer measures such as improved customer service, better customer satisfaction or higher loyalty
3. Internal – internal measures such as develop value added services, improve order processing, improve delivery cycle
4. Learning and Development – learning measures such as re-skill workforce, link rewards and performance, develop information assets.
Benefits
The balanced scorecard that results has many benefits to the business through both the process to develop it and as a communication tool to publicise the vision and strategy in action:
• Clarify and gain consensus about strategy
• Align consequent strategic initiatives and plans
• Communicate strategy throughout business
• Align business and personal goals to strategy
• Link strategic objectives to vision and budgets
• Perform periodic review and gain feedback
Yoshiana Muto
C1L007058
ARTICLE : " The development of the balance scorcard as a strategic management tool"
BY :
I.M. Cobbold and G.J.G. Lawrie 2GC Active Management Ltd., Maindenhead, UK
APRILIA DWI S
C1L007033
Resources:http://businessmanagement.suite101.com/article.cfm/balanced_scorecard_is_for_performance_management
Article: "Balanced Scorecard is for Performance Management
(Balanced Score Card Approach Helps Align Operations with Vision)"
by Gopinathan Thachappilly
Balanced Scorecard is an approach where emphasis is on managing operating performance rather than reviewing the financial results of the performance. Instead of just setting a financial budget, businesses seek to identify action initiatives that lead to the achievement of the business vision. Balance Scorecard implementation forces attention to qualitative aspects of performance in addition to the quantitative dimension.
Typical perspective areas are:
* Customer satisfaction
* Business process performance
* Learning and skills development
* Financial outcomes
Balanced Scorecard recognizes that financial outcomes are determined by business processes, value that customers receive and employee competence. Hence the focus on these broad perspectives. Financial outcomes continue to retain their importance; but attention is on the drivers of the financial performance.
Next is the task of identifying how to measure performance under each goal. The business must be able to gauge whether it is achieving or failing to achieve desired performance. It must also be able to identify the underperforming areas. It is right metrics that help proper performance measurement, and considerable attention is devoted to selecting the metrics.
Examples of performance measures:
* Customer: Market share, Customer complaints
* Business Processes: Equipment utilization, Accident ratios, Environment compliance, new Products
* Learning and Skills: Employee turnover, Illness rate, Promotions
* Financial: Financial Results, Return on Equity, Return on Capital Employed
Actionable initiatives are developed to achieve each goal. It is at this stage that the company's vision gets translated into things concrete. The action initiatives provide managers specific programs to implement.
DWI PRAWITA SARI
C1L007032
Article by Thomson, Jeff and Steve Varley, "Developing A Balanced Scorecard at AT&T", Journal of Strategic Performance Measurement, Aug/Sep 1997 Vol. 1, No. 4, p. 14.
DWI PRAWITA SARI
C1L007032
Article by Thomson, Jeff and Steve Varley, "Developing A Balanced Scorecard at AT&T", Journal of Strategic Performance Measurement, Aug/Sep 1997 Vol. 1, No. 4, p. 14.
NUR ESA YULIA PRATIWI
C1L007038
Article : " THE BALANCED SCORECARD METHOD: FROM THEORY TO PRACTICE "
By : Margarita ISORAITE
" Mykolas Romeris Universitety"
Management Control System Assignment
Find out in article, books, journal and other about Balance Score Card
Behavioral Effects of Nonfinancial Performance Measures : The Role Of Procedural Fairness
(Chong M. Lau and Moser)
In this journal, researcher make measurement instrument. The measurement instrument which in used is Nonfinancial measurement. Because this study is designed to investigate the behavioral responses of individual employees to nonfinancial measures use, we employ an instrument that measures the evaluation of individual employee performance rather the organizational or business unit performance. The nonfinancial measures items are based on the performance measures of a balanced scorecard. The balanced Scorecard nonfinancial perspectives are customer, internal business, financial and learning and growth. The five learning and growth measures are employee satisfaction rate, number of employee trained, employee turnover rate, number of innovations developed, and the adoption of new technology. The five internal business perspective measures are quality output, defect rates, setup time, manufacturing cycle, and inventory level. The five customer perspective measures are number of new customer acquired, response to time customers, number of customers complaints, number of overdue deliveries and customer satisfaction rate.
SMARA WURI L.D
C1L007003
article : The Balance Scorecard
The balanced scorecard is a strategic planning and management system that is used extensively in business and industry, government, and nonprofit organizations worldwide to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals. It was originated by Drs. Robert Kaplan (Harvard Business School) and David Norton as a performance measurement framework that added strategic non-financial performance measures to traditional financial metrics to give managers and executives a more 'balanced' view of organizational performance. While the phrase balanced scorecard was coined in the early 1990s, the roots of the this type of approach are deep, and include the pioneering work of General Electric on performance measurement reporting in the 1950’s and the work of French process engineers (who created the Tableau de Bord – literally, a "dashboard" of performance measures) in the early part of the 20th century.
"The balanced scorecard retains traditional financial measures. But financial measures tell the story of past events, an adequate story for industrial age companies for which investments in long-term capabilities and customer relationships were not critical for success. These financial measures are inadequate, however, for guiding and evaluating the journey that information age companies must make to create future value through investment in customers, suppliers, employees, processes, technology, and innovation."
The balanced scorecard concentrates on measures in four key strategic areas--finance, customers, internal business processes and learning and innovation--and requires the implementing organisation to identify goals and measures for each of them. Research and experimentation have come up with the following, which seem to be regularly applied in many organisations.
1) Customer perspective
a customer perspective--which addresses how customers see the organisation.
Goals: Customer acquisition, retention, profitability, satisfaction.
Measures: Market share, transaction cost ratios, customer loyalty satisfaction surveys/index, supplier relationships, key accounts.
2) Internal business process perspective
an internal business perspective--which requires the organisation to identify that at which it needs to excel
Goals: Core competenciesa core competency is something that a firm can do well and that meets the following three conditions specified by Hamel and Prahalad (1990):
It provides customer benefits
It is hard for competitors to imitate
It can be leveraged widely to many products and markets.
Measures: Efficiency measures of working practices and production processes, cycle times, unit costs, defect rates, time to market.
3) Learning and innovation perspective
a learning/innovation perspective--which addresses what the organisation needs to improve to create value in the future.
Goals: Continuous improvement, new product development.
Measures: Productivity of Intrapreneurship, new ideas,and suggestions from employees, employee satisfaction, skill levels, staff attitude, retention and profitability, rate of improvement.
4) Financial perspective
Goals: survival, success/growth, prosperity.
Measures: return on capital, cash flow, revenue growth, liquidity, cost reduction, project profitability, performance reliability.
Resource : Robert S. Kaplan and David P. Norton
IRIANTI PRATIWI
C1L007004
Articel : " Human Resources and Balance scorecard "
by : Sjafri Mangkuprawira
IRIANTI PRATIWI
C1L007004
Articel : "Human Resources and Balnce Scorecard"
by : Sjafri Mangkuprawira
Balanced scorecard (BSC) coined by Robert S. Kaplan and David P. Norton in the Harvard Business Review in 1992 entitled "The Balanced Scorecard-Measures that Drive Performance". BSC is a corporate performance measurement system viewed from four perspectives; financial, customer, internal business processes, and learning and growth. Indicators of financial performance or financial perspective is the highest measure of financial performance that can be given to shareholders. Then in terms of perspective is what level of customer satisfaction and customer loyalty and market scale. Was on the internal business perspective is the main performance measure of the quality and the acceleration time internal business processes to encourage business enterprise. Meanwhile in the learning and growth perspective is the company's ability to maintain and develop the ability to change and improve the process. Or the success of employees and infra structure in influencing business performance. Judging from the BSC as part of strategic management is then how does all these perspectives with the human resources (HR) company?
Dicky Chandra Hermawan
C1L007010
Article : Balance Scorecard
Resources: article(wiki.answers.com)
An approach to performance measurement that also focuses on what managers are doing today to create future shareholder value. A balanced scorecard is a set of performance measures constructed for four dimensions of performance. The dimensions are financial, customer, internal processes, and learning and growth. Having financial measures is critical even if they are backward looking. After all, they have a great effect on the evaluation of the company by shareholders and creditors. Customer measures examine the company's success in meeting customer expectations. Internal process measures examine the company's success in improving critical business processes. And learning and growth measures examine the company's success in improving its ability to adapt, innovate, and grow. The customer, internal processes, and learning and growth measures are generally thought to be predictive of future success (i.e., they are not backward looking). After reviewing these measures, note how "balance" is achieved: (1) performance is assessed across a balanced set of dimensions (financial, customer, internal processes, and innovation); (2) quantitative measures (e.g., number of defects) are balanced with qualitative measures (e.g., ratings of customer satisfaction); and (3) there is a balance of backward-looking measures (e.g., financial measures like growth in sales) and forward-looking measures (e.g., number of new patents as an innovation measure).
Mita wiyanti putri
C1L007015
article : BALANCE SCORECARD AND THE SMALL BUSINESS
Link: http://www.apinstitute.com/Balanced%20scorecard%20and%20the%20small%20business.html
More and more big companies are turning to the balanced scorecard as a management tool – but how can small businesses benefit from the balanced scorecard revolution?
Businesses of all sizes have benefited from the management tools and concepts that come with the balanced scorecard – a mechanism for managers to identify, communicate and monitor the progress of their business strategies.
But for many small- and medium-sized enterprises the concepts of the balanced scorecard get placed on a utopian wishlist because they assume its design and implementation need the budget and manpower of a large organisation to be successful.
But while it is true that the small business should think about the balanced scorecard in a different way to the multinational, there is undoubtedly a place for the balanced scorecard in the SME’s business strategy – and the possibility that the balanced scorecard might be even more influential for the SME than it is for the big corporation.
Different needs for balanced scorecards
In a large organisation, much of the impetus behind the balanced scorecard’s design will be driven by a desire to get a clear picture of the business. As organisations grow and become more complex, senior managers can lose track of their business’s culture and lose control of its performance as a result – something a balanced scorecard can fix.
Managers in an SME don’t have this problem, and can focus instead on creating a strategic vision and set of objectives for the business – which they can then easily and clearly share with the rest of the organisation.
Small is beautiful for implementing balanced scorecards
Once the balanced scorecard has been designed, much evidence shows that large organisations fail to carry through the adjustments needed to make it a success. A commitment is required throughout a management chain that can run to ten or fifteen levels; a level of management unwieldyness that is blissfully absent in the SME.
Small organisations will find a well-designed, well-implemented balanced scorecard presents a powerful snapshot of their organisation and its goals to outside sources – potential investors, banks, and so on. Where the large organisation can point to huge turnovers, glib shareholder presentations and powerful brand valuations, the SME can compensate with a plan shared by management, employees and external stakeholders to drive success.
Balanced scorecards at the Advanced Performance Institute
The Advanced Performance Institute is a world-leading independent research and advisory organisation specialising in organisational performance. The institute provides expert knowledge, research, consulting and training on concepts like balanced scorecards, performance measurement and corporate performance management.
The aim of the API is to provide today’s performance-focused companies, governments and not-for-profit organisations with insight, advice and services that help them deliver lasting change and superior performance.
ESTI SARASWATI
C1L007026
Link : http://www.ap-institute.com/Balanced%20scorecard%20as%20a%20leadership%20tool.html
Balanced scorecard as a leadership tool
Some tips for managers on using a balanced scorecard as a management tool.The success of balanced scorecard theory throughout the business world can in large part be attributed to its potential as a leadership tool. Used to its best effect can have a powerful impact on any size of organisation – and here’s some tips on how to use it.
Managers who see it as a ‘quick fix’ will be disappointed – the balanced scorecard needs to be planned carefully, used wisely and developed as part of a larger sea change in your organisational strategy.
The balanced scorecard and goal-setting
A large part of a balanced scorecard – which is explained more fully elsewhere on this website – comes from setting goals and targets. At a top level, these will apply for the organisation as a whole, but lower down a manager will set his people goals and targets that support those of the organisation.One problem with traditional target setting as opposed to the balanced scorecard is that people work to them at the expense of other things. Salespeople focusing solely on their sales figures may improve your bottom line, of course, but if it means a fall in customer service standards, or ignores their personal development, then it could lead to a long-term decline in the business’s performance.
Setting goals and targets across a balanced scorecard avoids this problem because it reduces the reliance on one single performance measure. While a manager may keep a sales target as a key performance indicator, including other targets across a basket of measures – thinking about the customer’s perspective, the internal business process perspective and the innovation and learning perspective.Before you implement the balanced scorecard
To be successful, you need to fully prepare your business for the balanced scorecard and vice versa. You’ll need to decide, with senior managers and other stakeholders, what your organisation’s goals and targets are. You’ll need to do a lot of analysis and consideration – and then do the same for the processes that will be needed to support it.You’ll then need to communicate the processes, and their rationale, to your people. The better you have prepared your processes and the more you have thought out your balanced scorecard approach, the easier this will be. But for the change to be successful it will need the cooperation of your entire team.Moving forward with a balanced scorecard.Finally, it cannot be emphasised enough that a balanced scorecard approach needs to be continually worked on. If it is introduced and then forgotten it will have no effect. The measurement of goals and targets needs to be continuous, as does the development the scorecard shows is needed.Using visual aids like the dashboard and the ‘traffic light’ systems can give your people a clear focus of where they are doing well in their jobs and where they need to develop. It can be a hugely successful motivational tool, as well as one that supports the success of your organisation – even if it is hard work.Balanced scorecards at the Advanced Performance Institute
Fortunately, you do not need to do all the hard work involved in balanced scorecards alone.The Advanced Performance Institute is a world-leading independent research and advisory organisation specialising in organisational performance. The institute provides expert knowledge, research, consulting and training on concepts like balanced scorecards, performance measurement and corporate performance management. The aim of the API is to provide today’s performance-focused companies, governments and not-for-profit organisations with insight, advice and services that help them deliver lasting change and superior performance.
VENTI ELISANUARESA
C1L007014
Link : http://www.ap-institute.com/Balanced%20scorecard%20keeps%20the%20lifeblood%20of%20business%20pumping.html
Balanced scorecard keeps the “lifeblood of business” pumping
The Daily Telegraph calls innovation “the lifeblood of business” – and using a balanced scorecard can help businesses of all sizes share its benefits.The balanced scorecard can help businesses share the benefits of innovation – something the Daily Telegraph says that without, “British business cannot compete on the world stage,” but “is regarded by too many companies as complicated, high cost and high risk.”Innovation, the paper rightly says in an article on its website, is just as important for small- and medium-sized enterprises as it is for large ones. And for SMEs that don't have the money to hire consultants or devote staff time to “what can seem a fuzzy concept”, a balanced scorecard can be a way to identify and nurture improvements to the way the business works.Balanced scorecard for small enterprises
The Telegraph quotes Paul Hender, the media analysis director of Metrica, a small company who began using a balanced scorecard. "Innovation doesn't have to be a brand new idea," says Paul. "It's about making things new to you and adapting things other industries are doing."the article describes the balanced scorecard as a management tool that “combines financial measurements with intangibles such as internal process, education and training and customer service to provide a total picture of the company's health”.Small companies can use balanced scorecards
It continues, “’We thought, why can't you use [the balanced scorecard] for a small company?’ Hender says. ‘We do things that aren't financial, but are nonetheless integral to whether we're a success or not.’“Metrica has just produced its first balanced scorecard report which revealed surprises, both good and bad. The company realised it was spending too much on stationery, for instance, but client satisfaction is higher than it thought.”Benefits of balanced scorecard as an innovation tool
Using the balanced scorecard as a tool for innovation means the company has quickly and cheaply identified areas where it can cut costs, as well as finding out what it is good at and can perhaps sell itself more strongly on in the marketplace.The Telegraph article also uses an example from Pfizer which could be easily copied by SMEs. The pharmaceutical company finds out its people’s talents outside their job description in order to put them to use in work to which they may be more effective, productive and satisfied. The balanced scorecard, by its very nature, is ideally suited to help measure and identify people’s strengths and weaknesses, whether in their core day-to-day roles or other areas.The Advanced Performance Institute is a world-leading independent research and advisory organisation specialising in organisational performance. The institute provides expert knowledge, research, consulting and training on concepts like balanced scorecards, performance measurement and corporate performance management.
Yulnaezar Pramudya
C1L007011
Article :
"Balanced Scorecard - Lesson"
Source : http://www.marketingteacher.com/Lessons/lesson_balanced_scorecard.htm
The Balanced Scorecard is an approach that can be used by strategic marketing managers to control, and keep track of, key performance indicators. In fact the scorecard itself is designed to be wholly strategic since it contains long-term outcomes and drivers of success. There are four zones in a balanced scorecard namely financial, customers, business processes (or simply processes), and learning and growth. Each measure is part of a longer chain of cause and effect, and all of the measures eventually lead to outcomes (read on and this will become clearer). So the scorecard is 'balanced' in that outcomes are in balance with each other.
The benefit of the scorecard is that is overcomes short-term quick fixes, and gives the strategic marketing manager a straightforward overview of the organisation. In fact, a scorecard should ideally fit onto a single sheet of paper. In fact Kaplan and Norton (1992), the originators of Balanced Scorecard, describe it as the dials in an airplane cockpit.
Learning and Growth.
Learning and Growth deals with measures of corporate success in relation to how it learns as it develops over time. So if the company makes mistakes in any way, then it must learn from them and there must be mechanisms in place to make sure that happens. Growth also includes the way in which it generates leaders for the future and equips employees with the necessary skills that will ultimately sustain its business. Examples include skills sets, employee relations and satisfaction, and staff competences.
Internal Business Processes.
Internal business processes include all operations within the organisation. The measures would cover whether or not value is being delivered to target segments, and the value chain is tracked. Innovation and new product development would also be measured. Examples of internal business processes include Information Technology, manufacturing, marketing operations such as customer service, procurement and quality processes.
Customers.
As marketers we are very concerned with our customers. We need to make sure that they are satisfied with every aspect of their experience with our organisation. We need to make sure that we not only recruit more new customers, but that we also retain them and extend new products and services to them. We also need to make sure that we are meeting the needs of our target segments. So here, examples of customer measures include customer retention and recruitment, their satisfaction and so on.
Financial.
Financial measures are vitally important for any business. A note of caution here, since traditional measures of financial success such as Return On Investment (ROI), and made secondary to 'shareholder value.' Shareholder value is the natural measure of success, and so it is prioritised. Information on customers, markets and technology is far more widely available today, so don't bogged down with old fashioned financial measures.
Resources, individuals and teams within a business are then aligned with the scorecard objectives, measures, targets and initiatives for each of the four areas of measurement.
NURMA WIJARENI
C1L007017
Link: http://www.ap-institute.com/Balanced%20Scorecard%20Software%20for%20Operational%20Effectiveness.html
Balanced Scorecard Software for Operational Effectiveness
More organisations then ever before are accountable for their performance with the emphasis on delivering measurable results, which is why hospitals, the army and the police force are just a few of the organisations using balanced scorecard software.There are hundreds of Balanced Scorecard Software packages available, which is why it’s important to opt for specialised and expert advice on the use, selection and implementation of these packages. There’s no doubt that the role of balanced scorecard software is a crucial one for many organisations that are required to demonstrate transparent results. And there is certainly no shortage of companies in need of efficient balanced scorecard software. Now it’s possible to find cost-effective web-based software programmes with all the features you’d expect from a quality dashboard application.
Balanced Scorecard Software – Accountability and Efficiency
Organisations such as the army and police force are opting for Balanced Scorecard Software to help facilitate improvement and assessment. The UK police force now has to demonstrate performance management through the Policing Performance Assessment Framework - a framework implemented by the Home Office to measure the Force’s effectiveness. The initiative is part of their overall accountability to the public and to the government.
Improving Operational Effectiveness with Balanced Scorecard Software
Any organisation that is accountable to customers, clients or users can benefit from Balanced Scorecard Software. Balanced Scorecard Software will measure operational effectiveness and can help implement goals and targets, helping improve overall performance of complex organisations and businesses. For organisations that are accountable at a local or national level such as the army, health care organisations or police, Balanced Scorecard Software plays an integral role.
Accountability and Transparency
When you have such a strong public accountability, measuring performance in an easy, accessible and effective way is crucial. Effective Balanced Scorecard Software can not only help improve decision making internally for such organisations, but help provide performance indicators and information to users on an ongoing basis – in the case of the police this would include criminal justice agencies and the public. Such organisations are recognising that to implement strategies it’s necessary to find the appropriate tool to help measure and manage those strategies. For obvious reasons of accountability, many organisations also need to be able to provide quality performance data to users, clients or the general public. Well designed Balanced Scorecard Software can be robust, usable, easy to use and quick to build.The Advanced Performance Institute is a world-authority on Performance Management and Balanced Scorecard software and provides independent advice on the selection and usage of these applications. The institute can help you select the right Balanced Scorecard and Corporate Performance Management Software for your organisation. The aim of the API is to provide today’s performance-focused companies, governments and not-for-profit organisations with insight, advice and services that help them deliver lasting change and superior performance.
ISMI BAROKAH
C1L007016
The Balanced Scorecard is a management system that maps an organization's strategic objectives into performance metrics in four perspectives: financial, internal processes, customers, and learning and growth. These perspectives provide relevant feedback as to how well the strategic plan is executing so that adjustments can be made as necessary.
-The Process of Building a Balanced Scorecard:
.Define the measurement architecture
.Specify strategic objectives
.Choose strategic measures
.Develop the implementation plan
-Balanced Scorecard Benefits:
*Translation of strategy into measurable parameters.
*Communication of the strategy to everybody in the firm.
*Alignment of individual goals with the firm's strategic objectives - the BSC recognizes that the selected measures influence the behavior of employees.
*Feedback of implementation results to the strategic planning process.
-Potential Pitfalls
The following are potential pitfalls that should be avoided when implementing the Balanced Scorecard:
*Lack of a well-defined strategy
*Using only lagging measures
*Use of generic metrics
LIAN TANTHI
C1L007055
Link : http://www.ap-institute.com/Balanced%20scorecard%20consulting%20for%20all.html
Balanced scorecard consulting for all
Balanced scorecard consultants can deliver results for any size or type of organisation – and here’s the proof.
An expert, committed balanced scorecard consultancy will be able to deliver results to any kind of organisation – and to any size of business.That’s the message for anyone thinking of working with a balanced scorecard consulting partner to make organisational excellence part and parcel of their everyday working.A look at the case studies on the Advanced Performance Institute’s website reveals the breadth of their balanced scorecard consulting work.
Balanced scorecard consulting helps the RAF fly
For example, there is a report on their balanced scorecard consulting work with the Royal Air Force. The balanced scorecard consultants implemented a strategic performance management system – and the case study outlines how a scorecard reporting approach was designed and put in place.In particular, the study highlights the importance of integrating performance management with risk management as part of a wider balanced scorecard approach. It discusses the problem of objective versus subjective measurement, and it outlines the challenges of automating the system using a custom-built performance management software application.
Belfast City Council’s balanced scorecard consulting
Another balanced scorecard consulting case study illustrates the API’s work with Belfast City Council – a much smaller organisation than the RAF, with a very different mission.The work with the council involved strategy mapping, one of the more recent developments to come out of balanced scorecards which consultants should be familiar with. The balanced scorecard consulting included helping politicians and public servants agree on one strategy and map it into a value creation map, which was then used to identify and agree on priorities.
The balanced scorecard consultants then worked with the customer to design relevant and meaningful key performance indicators; and helped put processes in place to ensure performance information is used to extract management insights and inform learning and future performance improvements.
Balanced scorecard consulting and the Scottish Intellectual Assets Centre
On a smaller scale still, the API did balanced scorecard consulting work with the Scottish Intellectual Assets Centre. The work was about managing and measuring intangibles and performance managment in SMEs.The case study outlines how the Intellectual Assets Centre and their balanced scorecard consulting partner visualised their strategy with all its intangible value drivers and identified key performance questions and key performance indicators to help them better manage their intangibles going forward.
The API: your balanced scorecard consulting partner
The Advanced Performance Institute is a world-leading independent research and advisory organisation specialising in organisational performance. The institute provides expert knowledge, research, consulting and training on concepts like balanced scorecards, performance measurement and corporate performance management.
.
Pipit Etriana P.
C1L007048
Article: Balance Scorecards
Resources:
http://en.wikipedia.org/wiki/Balanced_scorecard
The balanced scorecard (BSC) is a strategic performance management tool - a semi-standard structured report supported by proven design methods and automation tools can be used by managers to keep track of the execution of activities by staff within their control and monitor the consequences arising from these actions. It is perhaps the best known of several such frameworks, and was widely adopted in Anglo-Saxon countries and Scandinavia in the early 1990s. Since 2000, use of BSC, its derivatives (e.g. performance prism), and other similar tools (e.g. Results Based Management) have become common in the Middle East, Asia and Spanish countries also.
The core characteristic of the BSC and its derivatives is the presentation of a mixture of financial and non-financial measures each compared to a 'target' value within a single concise report. The report is not meant to be a replacement for traditional financial or operational reports, rather a succinct summary that captures the information most relevant to those reading it. It is the methods by which this 'most relevant' information is determined (i.e. the design processes used to select the content) that most differentiates the various versions of the tool in circulation.
The first versions of BSC asserted that relevance should derive from the corporate strategy, and proposed design methods that focused on choosing measures and targets associated with the main activities required to implement the strategy. As the initial audience for this were the readers of the Harvard Business Review, the proposal was translated into a form that made sense to a typical reader of that journal - one relevant to a mid-sized US business. Accordingly, initial designs were encouraged to measure three categories of non-financial measure in addition to financial outputs - those of "Customer," "Internal Business Processes" and "Learning and Growth." Clearly these categories were not so relevant to non-financial or units within complex organisations (which might have high degrees of internal specialisation), and much of the early literature on BSC focused on suggestions of alternative 'perspectives' that might have more relevance to these groups.
Modern Balanced Scorecard thinking has evolved considerably since the initial ideas proposed in the late 1980s and early 1990s, and the modern performance management tools including Balanced Scorecard are significantly improved - being more flexible (to suit a wider range of organisational types) and more effective (as design methods have evolved to make them easier to design, and use).
Design of a Balanced Scorecard ultimately is about the identification of a small number of financial and non-financial measures and attaching targets to them, so that when they are reviewed it is possible to determine whether current performance is 'meets expectations'. The idea behind this is that by alerting managers to areas where performance deviates from expectations, they can be encouraged to focus their attention on these areas, and hopefully as a result trigger improved performance within the part of the organisation they lead.
Pipit Etriana P.
C1L007048
Articles: Balance Scorecards
Resources:
http://en.wikipedia.org/wiki/Balanced_scorecard
The original thinking behind Balanced Scorecard was for it to be focused on information relating to the implementation of a strategy, and perhaps unsurprisingly over time there has been a blurring of the boundaries between conventional strategic planning and control activities and those required to design a Balanced Scorecard. This is illustrated well by the four steps required to design a Balanced Scorecard included in Kaplan & Nortons writing on the subject in the late 1990s, where they assert four steps as being part of the Balanced Scorecard design process:
1. Translating the vision into operational goals;
2. Communicating the vision and link it to individual performance;
3. Business planning; index setting
4. Feedback and learning, and adjusting the strategy accordingly.
These steps go way beyond the simple task of identifying a small number of financial and non-financial measures, but illustrate the requirement for whatever design process is used to fit within broader thinking about how the resulting Balanced Scorecard will integrate with the wider business management process. This is also illustrated by books and articles referring to balanced scorecards confusing the design process elements and the balanced scorecard itself. In particular, it is common for people to refer to a “strategic linkage model” or “strategy map” as being a balanced scorecard.
Although it helps focus managers' attention on strategic issues and the management of the implementation of strategy, it is important to remember that the balanced scorecard itself has no role in the formation of strategy. In fact, balanced scorecards can comfortably co-exist with strategic planning systems and other tools.
HENDRA YOLANDA
C1L007056
Link: http://www.ap-institute.com/Balanced%20scorecard%20helps%20pick%20best%20causes.html
Balanced scorecard helps pick best causes
An article in Forbes magazine shows how a charity fund is using a balanced scorecard to choose the best causes for donations
The benefits of using a balanced scorecard can apply in a large number of unexpected places – including a US-based charity fund that is using the balanced scorecard to judge the merits of non-profit organisations and calculate how much cash to ‘invest’ in themThe practice was highlighted in an article in Forbes, the US business magazine. The article focuses on New Profit, a fund that had raised $11 million and redistributed the money to eight charities along similar lines to a unit trust or other investment fund. Vanessa Kirsch, the fund’s manager, used a balanced scorecard to weigh up each organisation and judge how worthy a cause they were.
Balanced scorecard is the key
Forbes says, “The key to New Profit is its scorecard, which rates a non-profit on a series of financial and other sorts of benchmarks.
“An afterschool program, for example, can rack up good points for keeping down costs and improving student performance on standardised tests. New Profit investors get scorecards on all organisations once every quarter. They're usually familiar with them already but, at a glance, they can tell if their money is being put to good use.”
The ‘investors’ that Forbes mentions can donate their money in all confidence that the recipient charity will be effectively putting it to use, because Kirsch knows – thanks to her balanced scorecards – which charities are performing poorly and redistributes funds accordingly. If one organisation starts scoring poorly across her basket of measures, Kirsh will withhold funding until they get their act together – or stop it completely and look for a better cause to support.
The balanced scorecard can work outside business
The fund’s goal is to support the growth of America’s non-profit organisations by using the same theories to select one to support as a hard-nosed investor would use in choosing a business to invest in. Microsoft and Cisco grew from small origins, Kirsch argues, so why can’t a non-profit organisation, if it thinks in the same way. And, like big US businesses, she used a model of the balanced scorecard developed by Robert Kaplan to measure the organisationsKaplan, the Harvard Business School professor who first developed the balanced scorecard for corporate clients, modified it for charities. The non-profit version looks at areas like social impact, user satisfaction, finances, goals met and staff retention, and is supported by a ‘growth plan’ – a list of ‘doable’ objectives, based on the balanced scorecard’s results – which the charity has to follow to get New Profit funding.
Success of New Profit’s balanced scorecard approach
The success of Kirsch’s balanced scorecard approach is demonstrated by the growth of the fund’s portfolio – which was growing at 35 per cent a year, compared with three per cent for the industry overall (at the time of the Forbes article). And, the magazine suggests, she may change her focus and begin applying the same techniques to another needy cause: health care.
The Advanced Performance Institute is a world-leading independent research and advisory organisation specialising in organisational performance. The institute provides expert knowledge, research, consulting and training on concepts like balanced scorecards, performance measurement and corporate performance management. The aim of the API is to provide today’s performance-focused companies, governments and not-for-profit organisations with insight, advice and services that help them deliver lasting change and superior performance.
ISMI BAROKAH
C1L007016
Article: Balance Scorecard
Resource: http://www.netmba.com/accounting/mgmt/balanced-scorecard/
The Balanced Scorecard is a management system that maps an organization's strategic objectives into performance metrics in four perspectives: financial, internal processes, customers, and learning and growth. These perspectives provide relevant feedback as to how well the strategic plan is executing so that adjustments can be made as necessary.
-The Process of Building a Balanced Scorecard:
.Define the measurement architecture
.Specify strategic objectives
.Choose strategic measures
.Develop the implementation plan
-Balanced Scorecard Benefits:
*Translation of strategy into measurable parameters.
*Communication of the strategy to everybody in the firm.
*Alignment of individual goals with the firm's strategic objectives - the BSC recognizes that the selected measures influence the behavior of employees.
*Feedback of implementation results to the strategic planning process.
-Potential Pitfalls
The following are potential pitfalls that should be avoided when implementing the Balanced Scorecard:
*Lack of a well-defined strategy
*Using only lagging measures
*Use of generic metrics
Ratna Dwi A
C1L007001
Article :
"BALANCE SCORECARD AND ACCOUNTANTS AS A VALUE "Strategic Partner" "
By: Arfan Ikhsan Lubis
What is interesting in this article, balance scorecard has a relationship with an accountant, that is as a partner of strategic value. The trigger of this particular change in the business of globalization that is the end-akhlr faster. Because multinational firms operate, so they expect their financial advisers also have experience of multinationals. balance scorecard helps top management to communicate their strategies to the organization, and evaluate progress and organizational strategy. Four perspective Scorecard provides a balance between short-term goals and long term, the desired result achieved with the drivers of these results, and between hard objective measures with subjective measures are more lenient.
In subsequent perkambangan BSC is not only used to measure organizational performance, but developed into the core of strategic management system. There are four strategic management process that combines long-term goals and short-term optimal is:
1.Translating the Vision process.
2.Communicating and Linking Process
3.Business Planning Process
4.Process Feedback and Learning
IKA ZAINITA HUSNA WIDYANA
C1L007013
Article : Improving Corporate Governance with the Balanced Scorecard
Resource : Robert S. Kaplan
& Michael E. Nagel
Link : http://www.hbs.edu/research/facpubs/workingpapers/papers2/0304/04-044.pdf
Mufti Justitia
C1L007020
Article : "A Balanced Scorecard Approach, To Measure Customer Profitability"
Resource :http://hbswk.hbs.edu/item/4938.html
What is balance scorecard?
The balanced scorecard is a strategic planning and management system that is used extensively in business and industry, government, and nonprofit organizations worldwide to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals.
The Balanced Scorecard introduced customer metrics into performance management systems. Scorecards feature all manner of wonderful objectives relating to the customer value proposition and customer outcome metrics—for example, market share, account share, acquisition, satisfaction, and retention.
Unfortunately, many companies cannot accurately decompose their aggregate marketing, distribution, technical, service, and administrative costs into the cost of serving individual customers. Either they treat all such costs as fixed-period costs and don't drive them to the customer level, or they use high-level, inaccurate methods, such as allocating a flat percentage of sales revenue to each customer to cover "below-the-line" indirect expenses.
The remedy to this situation is to apply activity-based costing (ABC) to accurately assign an organization's indirect expenses to customers. Many companies, however, have tried ABC at some time during the past twenty years and abandoned it because it did not capture the complexity of their operations, took too long to implement, and was too expensive to build and maintain. Fortunately, a new approach is now available that is far simpler and much more powerful than traditional ABC.
The payoff: BSC customer profitability metrics is The ability to measure profitability at the individual customer level allows companies to consider new customer profitability metrics such as "percentage of unprofitable customers," or "dollars lost in unprofitable customer relationships." Such customer profitability measures provide a valuable signal that satisfaction, retention, and growth in customer relationships are desirable only if these relationships contribute to higher, not lower, profits. BSC customer profitability metrics are also highly actionable, If a company finds that an important customer is unprofitable, it should first look internally to see how it can improve its internal processes to lower the cost-to-serve. After all, we can't expect customers to pay for our inefficiencies.
DESRENA M.SARI
C1L007046
"Balanced Scorecard Diagnostics: Maintaining Maximum Performance"
by:Paul R.Niven
The Balanced Scorecard system is a robust framework, capable of helping organizations successfully navigate the uncertainties of competition and changing dynamics. However, as many as half of all Balanced Scorecard users aren't achieving the results they hoped for and a significant number of users rate their performance measurement systems as "adequate." Balanced Scorecard expert Paul Niven believes that these organizations aren't reaching the full potential of the Balanced Scorecard due to inadequate methods of implementation. And this book is his remedy.
Balanced Scorecard Diagnostics is a single-source guide to accurately analyzing the effectiveness of an organization's Balanced Scorecard, complete with the latest tools and know-how to implement corrective changes, ensuring your Balanced Scorecard is operating at maximum performance. Throughout this step-by-step guide, self-assessment questions help readers focus company discussions to critically examine their implementation efforts and propel Scorecard initiatives forward.
Balanced Scorecard Diagnostics features real-world case studies and practical tools that help you get started right away. It also:
* Examines the fundamental elements for effectively employing the Balanced Scorecard, including the executive sponsorship critical to implementing a Scorecard initiative
* Offers guidelines for effectively examining your Balanced Scorecard team, training and education regimen, and communication planning
* Provides advice on how to "personalize"your Strategy Map to evoke user acceptance, supplies diagnostics for reviewing the number of objectives on your map, and examines the cause and effect linkages that tell your strategic story
* Features expert coverage on testing your current performance measures by questioning the number of measures comprising your Scorecard and the vital concept of using measure results to learn, as well as helpful guidance on target setting and sources of target information. It also demonstrates how initiatives may be mapped to Scorecard objectives, ensuring your human and financial resources are directed towards the execution of strategy
* Provides cascading principles and tools to gauge the degree of alignment among Scorecards throughout your organization
* Examines the connection between the Balanced Scorecard and budgeting, compensation, and corporate governance and offers proven techniques for effectively forging these linkages
* Outlines various reporting mechanisms, including software and low-tech methods, and investigates how the Balanced Scorecard can be used as a centerpiece of your management review process
Balanced Scorecard Diagnostics is a must-read for every
Keisha Khrisnanda E.N
C1L007029
http://hbswk.hbs.edu/item/4938.html
A Balanced Scorecard Approach
To Measure Customer Profitability
Author: Robert S. Kaplan
The Balanced Scorecard introduced customer metrics into performance management systems. Scorecards feature all manner of wonderful objectives relating to the customer value proposition and customer outcome metrics—for example, market share, account share, acquisition, satisfaction, and retention.
Consider the situation faced in the 1990s by one of the nation's largest distributors of medical and surgical supplies. In five years, sales had more than tripled to nearly $3 billion, yet selling, general, and administrative (SG&A) expenses, thought by many to be a fixed cost, had increased even faster than sales. Despite the tripling in sales, margins had declined by one percentage point and the company had just incurred its first loss in decades. Rather than SG&A costs being fixed or even variable, these costs had become "super-variable."
Companies often capture additional business by offering more services.While all of these services create value and loyalty among customers, none of them come for free. For a differentiated customer intimacy strategy to succeed, the value created by the differentiation—measured by higher margins and higher sales volumes—has to exceed the cost of creating and delivering customized features and services.
BSC customer profitability metrics are also highly actionable. If a company finds that an important customer is unprofitable, it should first look internally to see how it can improve its internal processes to lower the cost-to-serve. After all, we can't expect customers to pay for our inefficiencies.
Customized pricing policies should be at the heart of any strategy to manage customer profitability. The company can set a base price for a standard product or service, with standard packaging, delivery, and payment. The company also provides customers with a menu of options representing variations from the standard order, such as a customized product or service, special packaging, expedited delivery, or extended credit terms.
Finally, as an alternative to raising the price for this single service, the company can encourage the customer to purchase a wider range of services, expecting that the margin from a comprehensive set of services will transform the customer into a profitable relationship.
Keisha Khrisnanda E.N
C1L007029
http://hbswk.hbs.edu/item/4938.html
A Balanced Scorecard Approach
To Measure Customer Profitability
Author: Robert S. Kaplan
The Balanced Scorecard introduced customer metrics into performance management systems. Scorecards feature all manner of wonderful objectives relating to the customer value proposition and customer outcome metrics—for example, market share, account share, acquisition, satisfaction, and retention.
Consider the situation faced in the 1990s by one of the nation's largest distributors of medical and surgical supplies. In five years, sales had more than tripled to nearly $3 billion, yet selling, general, and administrative (SG&A) expenses, thought by many to be a fixed cost, had increased even faster than sales. Despite the tripling in sales, margins had declined by one percentage point and the company had just incurred its first loss in decades. Rather than SG&A costs being fixed or even variable, these costs had become "super-variable."
Companies often capture additional business by offering more services.While all of these services create value and loyalty among customers, none of them come for free. For a differentiated customer intimacy strategy to succeed, the value created by the differentiation—measured by higher margins and higher sales volumes—has to exceed the cost of creating and delivering customized features and services.
BSC customer profitability metrics are also highly actionable. If a company finds that an important customer is unprofitable, it should first look internally to see how it can improve its internal processes to lower the cost-to-serve. After all, we can't expect customers to pay for our inefficiencies.
Customized pricing policies should be at the heart of any strategy to manage customer profitability. The company can set a base price for a standard product or service, with standard packaging, delivery, and payment. The company also provides customers with a menu of options representing variations from the standard order, such as a customized product or service, special packaging, expedited delivery, or extended credit terms.
Finally, as an alternative to raising the price for this single service, the company can encourage the customer to purchase a wider range of services, expecting that the margin from a comprehensive set of services will transform the customer into a profitable relationship.
RISQI AYU KUSUMASARI
C1L007059
Article : "The Balanced Scorecard: A Strategic Chart of Accounts"
Link :
http://knol.google.com/k/balanced-scorecard-for-nonprofit-organizations#
RISQI AYU KUSUMASARI
C1L007059
Link : http://knol.google.com/k/balanced-scorecard-for-nonprofit-organizations#
The Balanced Scorecard: A Strategic Chart of Accounts
The Balanced Scorecard is the “strategic chart of accounts” for organizations that focus on strategy. It captures both the financial and the non-financial elements of an organization’s strategy, and discusses the cause and effect relationships that drive results. The Balanced Scorecard allows, for the first time, an organization to look ahead, using leading indicators, instead of only looking back using lagging indicators. The Balanced Scorecard puts strategy – the key driver of results today – at the center of the management process. The major components of the Balanced Scorecard provide both a holistic view of an organization’s strategy and the path toward executing its strategy. The major components are:
Perspectives
A central idea of the Balanced Scorecard is the idea of cause-and-effect relationships between elements of the strategy. In the mission-driven Balanced Scorecard model, there are five perspectives, linked in a cause and effect relationship. They are:
- Mission
- Customer perspective
- Final perspective
- Internal perspective
- Learning and growth perspective
Objectives
Within each perspective, there are a set of key objectives that seek to answer the questions outlined above. They are high-level statements of elements of your strategy. For example, in the financial perspective, typical objectives might include:
• Manage Program Effectiveness
• Increase Major Gifts
• Satisfy Evolving Client Needs
These objectives are themselves linked together in a cause and effect relationship. For example, both “Increase Major Gifts” and “Increase Productivity” are linked to “Maintain Long-Term Viability.” Most Balanced Scorecards have between 15-20 objectives, distributed equally across the four perspectives.
RISQI AYU KUSUMASARI
C1L007059
Strategy Map
The strategy map visualizes the logic behind your strategic hypotheses. Good strategy maps can “tell the story of your strategy”:
“If we provide employees with the necessary training, technol-ogy, and culture then they will be able to develop the necessary internal processes that will provide customers the right value proposition that in turn will result in achieving our financial objectives, allowing us to execute on our mission.”
Measures
“What gets measured gets managed.” Progress in achieving objectives is determined through measurement. By creating a set of measures, linked to the organization’s strategy, you can ensure that you are measuring and managing your organization based on your strategy. It’s important to develop a set of balanced measures in a Balanced Scorecard. Most Balanced Scorecards have between 20-25 measures, distributed across the four perspectives equally.
Targets
Targets describe the level at which a measure must be achieved in order to execute the strategy. Generally, a stretch target is set from 3-5 years out, and the current period targets are backed into based on the stretch targets. Targets also help determine the level of investment in particular areas of the strategy. For example, a revenue growth strategy might have particularly high revenue targets, and more achievable cost targets. A profitability strategy might have equally hard cost and revenue targets.
Initiatives
Initiatives are the projects that are put in place to help close the performance gap between the actual and the target on a measure. Initiatives are not the “day-to-day” business operations but rather are special projects that generally have a budget, timeline, person accountable, and other resources. Initiatives may be large or small in scope. They generally are owned by a person or group and are managed like projects.
NAME : NURHAYATI UTAMI
NIM : C1L007028
Source : http://books.google.co.id/books?id=mRHC5kHXczEC&dq=the+book+about+balance+scorecard&printsec=frontcover&source=bn&hl=id&ei=EW8jS8rSOIyA7QPgofGzBg&sa=X&oi=book_result&ct=result&resnum=4&ved=0CB0Q6AEwAw#v=onepage&q=&f=false
Article : Translating Strategy Into Action The Balance Scorecard. "A Landmark Achievement"
Pengarang : Robert S. Kaplan, and David P. Norton
"Measurement and Management in the Information Age"
The Balanced Scorecard (BSC) provides managers with the instrumentation they need to negative to future competitive success. 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.
The information age environment for both manufacturing and service organizations requires new capabilities for competitive success. The ability of a company to mobilize and exploit its intangible or invisible assets has become far more decisive than investing and managing physical, tangible assets. Intangible assets enable and organization to :
* Develop customer relationships that retain the loyalty of existing customers and enable new customer segments and market areas to be served effectively and efficiently;
* Introduce innovative products and services desired by targeted customer segments;
* Produce customized high-quality products and services at low cost and with short lead times;
* Mobilize employee skills and motivation for continuous improvements in process capabilities, quality, and response times; and
* Deploy information technology, data bases, and systems.
As organizations attempt to transform themselves to compete successfully in the future, they are turning to a variety of improvement initiatives:
* Total Quality Management.
* Just-In-Time (JIT) production and distribution systems.
* Time-Based competition.
* Lean production/lean enterprise.
* Building customer-focused organizations.
*Activity-Based cost management.
* Employee empowerment.
* Reengineering.
DECKY PRAMADHITYA
C1L007030
Article : Using Balance Scorecard Approach to Measure Performance
Source : http://www.work911.com/cgi-bin/links/jump.cgi?ID=773
Traditionally, many Federal agencies have measured their organizational performance by focusing on internal or process performance, looking at factors such as the number of full-time equivalents (FTE) allotted, the number of programs controlled by the agency, or the size of the budget for the fiscal year. In contrast, private sector businesses usually focus on the financial measures of their bottom line: return-on-investment, market share, and earnings-per-share. Alone, neither of these approaches provides the full perspective of an organization's performance that a manager needs to manage effectively. But by balancing internal and process measures with results and financial measures, managers will have a more complete picture and will know where to make improvements.
• Balancing Measures
• Four Perspectives
• Tie-In to Employee Performance
Balancing Measures. Robert S. Kaplan and David P. Norton have developed a set of measures that they refer to as "a balanced scorecard." These measures give top managers a fast but comprehensive view of the organization's performance and include both process and results measures. Kaplan and Norton compare the balanced scorecard to the dials and indicators in an airplane cockpit. For the complex task of flying an airplane, pilots need detailed information about fuel, air speed, altitude, bearing, and other indicators that summarize the current and predicted environment. Reliance on one instrument can be fatal. Similarly, the complexity of managing an organization requires that managers be able to view performance in several areas simultaneously. A balanced scorecard or a balanced set of measures provides that valuable information.
Four Perspectives. Kaplan and Norton recommend that managers gather information from four important perspectives:
• The customer's perspective. Managers must know if their organization is satisfying customer needs. They must determine the answer to the question, How do customers see us?
• The internal business perspective. Managers need to focus on those critical internal operations that enable them to satisfy customer needs. They must answer the question, What must we excel at?
• The innovation and learning perspective. An organization's ability to innovate, improve, and learn ties directly to its value as an organization. Managers must answer the question, Can we continue to improve and create value for our services?
• The financial perspective. In the private sector, these measures have typically focused on profit and market share. For the public sector, financial measures could include the results oriented measures required by the Government Performance and Results Act of 1993 (GPRA). Managers must answer the question, How do we look to Congress, the President, and other stakeholders?
Tie-In to Employee Performance. The balanced scorecard philosophy need not apply only at the organizational level. A balanced approach to employee performance appraisal is an effective way of getting a complete look at an employee's work performance, not just a partial view. Too often, employee performance plans with their elements and standards measure behaviors, actions, or processes without also measuring the results of employees' work. By measuring only behaviors or actions in employee performance plans, an organization might find that most of its employees are appraised as Outstanding when the organization as a whole has failed to meet its objectives.
By using balanced measures at the organizational level, and by sharing the results with supervisors, teams, and employees, managers are providing the information needed to align employee performance plans with organizational goals. By balancing the measures used in employee performance plans, the performance picture becomes complete.
Originally published on April 1997.
Keisha Khrisnanda E.N
C1L007029
http://www.ap-institute.com/Balanced%20Scorecard%20How%20to%20create%20a%20public%20sector%20BSC.html
Balanced Scorecard: How to create a public sector BSC
Public Sector and Not-for-Profit Balanced Scorecard
While the Balanced Scorecard has been designed for commercial companies, the framework has found wide-spread use in the public and not-for-profit sector. The Advanced Performance Institutes has worked with many government and not-for-profit organisations to implement performance management frameworks.
The challenge is how to apply the commercial company focused template of the Balanced Scorecard in public sector and not-for-profit organisations. Here are the key changes to the Balanced Scorecard template in order to make it relevant to those organisations:
* Move the Financial Perspective of the Balanced Scorecard to the bottom of the template. The overall objective of most public sector, government and not-for-profit organisations is not to maximise profits and shareholder return. Instead, money and infrastructure are important resources that have to be managed as effectively and efficiently as possible to deliver the strategic objectives.
* The overall objective in of public sector, government and not-for-profit Balanced Scorecards is to deliver services to their key stakeholders, which can be the public, central government bodies or certain communities. This perspective usually sits at the top of the template to highlight the key stakeholder deliverables and outcomes.
* The two remaining Balanced Scorecard perspectives will stay as they are. Any public sector, government and not-for-profit organisations needs to build the necessary human, information and organisational capital to deliver its key processes in the middle of the map.
For more information, articles and case study material on balanced scorecard and performance management, please visit the resources section of the Advanced Performance Institute website.
The Advanced Performance Institute (API) is a world-leading independent research and advisory organisation specialising in organisational performance. The institute provides expert knowledge, research, consulting and training on concepts like balanced scorecards, performance measurement and corporate performance management.
The aim of the API is to provide today’s performance-focused companies, governments and not-for-profit organisations with insight, advice and services that help them deliver lasting change and superior performance.
ARNELLA WILANANDA
C1L007039
ARTICLE: "Balanced Scorecards in the Business-Centric BI Architecture"
SOURCE : http://www.information-management.com/issues/20041001/1011014-1.html ( BY Steve Williams)
The balanced scorecard is generally presented by the Balanced Scorecard Collaborative (BS-Col) as a strategic management framework, the use of which provides management the means to measure company performance in key business areas against target performance levels. It should be noted at the outset that the methodology is essentially silent about the data architecture and data management issues involved in deploying a balanced scorecard.
To develop a balanced scorecard, one typically performs a top-down mapping between business drivers, business strategies and value-driving business processes. One then selects financial and non financial performance measures for those value-driving processes, with the measures drawn from four perspectives: financial performance, performance for the customer, internal operating performance and learning. For example, if a business competes on price, its balanced scorecard might include the following performance measures:
1.Financial perspective: operating margin dollars and percentage.
2.Internal perspective: unit cost, capacity utilization.
3.Customer perspective: order-to-delivery cycle time, percent perfect orders.
4.Learning perspective: number and percentage of certified customer service reps.
To develop a business-centric BI architecture for a given organization, one typically does a top-down mapping between business drivers, business strategies and value-driving business processes - the same analytic pathway followed when designing a balanced scorecard. The processes diverge after the initial mapping because of different objectives: the balanced scorecard is designed to present key strategic performance measures, whereas the business-centric BI architecture is aimed at specifying the ways that BI - business information, business analyzes and structured business decisions - can be used to improve the core business processes that drive business performance and business value.
The balanced scorecard is generally presented by the Balanced Scorecard Collaborative (BS-Col) as a strategic management framework, the use of which provides management the means to measure company performance in key business areas against target performance levels. It should be noted at the outset that the methodology is essentially silent about the data architecture and data management issues involved in deploying a balanced scorecard.
To develop a balanced scorecard, one typically performs a top-down mapping between business drivers, business strategies and value-driving business processes. One then selects financial and non financial performance measures for those value-driving processes, with the measures drawn from four perspectives: financial performance, performance for the customer, internal operating performance and learning. For example, if a business competes on price, its balanced scorecard might include the following performance measures:
1.Financial perspective: operating margin dollars and percentage.
2.Internal perspective: unit cost, capacity utilization.
3.Customer perspective: order-to-delivery cycle time, percent perfect orders.
4.Learning perspective: number and percentage of certified customer service reps.
These financial and non-financial measures may be specific to the balanced scorecard initiative. More likely, some or all of these measures may be used within other analytic applications, such as customer analytic, where measures such as order-to-delivery cycle time are standard fare. In order to avoid stove-piping and achieve the so-called "single view of the truth," we must ensure that the data used by the balanced scorecard is consistent with the data used by other analytic applications that use the same measures. This means we must look at the broader BI architecture.
To develop a business-centric BI architecture for a given organization, one typically does a top-down mapping between business drivers, business strategies and value-driving business processes - the same analytic pathway followed when designing a balanced scorecard. The processes diverge after the initial mapping because of different objectives: the balanced scorecard is designed to present key strategic performance measures, whereas the business-centric BI architecture is aimed at specifying the ways that BI - business information, business analyzes and structured business decisions - can be used to improve the core business processes that drive business performance and business value.
ARNELLA WILANANDA
C1L007039
CONTINUE....
A business-centric BI architecture is specific to each organization and encompasses the business information, business analysis methods and tools, and structured business decision processes required by executives and managers to drive business results for the specific organization. Business-centric BI development methods are aimed at ensuring that investments in BI pay off, and a central activity is a comprehensive top-down analysis of the opportunities to use BI to improve the business value created by management processes, revenue-generating processes and operating processes.5 One outcome of the analysis is a BI portfolio - a group of BI opportunities prioritized by potential business impact or return on investment (ROI).
the impetus for acquiring balanced scorecard software will come from a desire to overcome the data management complexities associated with acquiring performance measurement data on an ad hoc basis from multiple sources, integrating that data via spreadsheets, presenting that data via PowerPoint or other graphical tools, and keeping the data for historical trend analysis. Balanced scorecard application software is available from 19 vendors (all the major BI applications and ERP vendors) whose products have been certified by the Balanced Scorecard Collaborative. The functional requirements for balanced scorecard applications amount to being able to:
1.Associate multidimensional business facts, business information and meta data with the specially named entities used by the balanced scorecard performance management framework: perspectives (financial, customer, internal and learning), objectives, measures, cause-and-effect relationships, targets and initiatives.
2.Map various relationships between the specially named entities.
3.Generate standard reports in a scorecard format and provide graphical performance status indicators - such as the familiar "stoplight" display using red, yellow and green indicators.
4.Provide drill-down and slice-and-dice capabilities.
YOSHIANA MUTO
C1L007058
ARTICLE:
"The Development of the Balance Scorecard as a Strategic Management Tool"
BY :
I.M. Cobbold and G.J.G. Lawrie 2GC Active Management Ltd., Maindenhead, UK
by combining financial measures and non financial measures in a single report, the balance scorecard aims to provide managers with richer and more relevant information about activities they are managing than is provided by financial measures alone.
1st Generation Balance Scorecard
Balance Scorecard was initially described as a simple “4 box” approach to performance measurement (Kaplan and Norton, 1992). In addition to financial measures, managers were encouraged to look at measures drawn from three other “perspectives” of the business: Learning and Growth; Internal Business Process; and Customer, chosen to represent the major stakeholders in a business (Mooraj et al, 1999)
Practical experiences with 1st Generation Balanced Scorecards
The authors professional experience suggests that 1st Generation Balanced Scorecards are still being developed, and that they probably still form the large majority of Balanced Scorecards designs introduced into organizations.
2nd Generation Balanced Scorecard
2nd Generation Balanced Scorecard saw the idea of causality developed further. Instead of simply highlighting causal links between perspective. Measure based linkages provided a richer model of causality than before, but presented conceptual problems, for example, the use of measures encouraged attempts to ‘prove’ the causality between measures using various form of analysis.
One consequence of this change in emphasis was to increase the pressure on the design process to accurately reflect the organization’s strategic goals. Over time the idea of strategic linkage became an increasingly important element of Balanced Scorecard design methodology, and in the mid 1990’s Balanced Scorecard documentation began to show graphically linkages between the strategic objectives themselves (rather than measures) with causality linking across the perspectives toward key objectives relating to financial performance.
Another Consequence was the increased awareness of the need to reflect differences in management agenda within differing parts of organizational structures, and so increasing attention was given to developing ‘strategic alignment’ between management units by developing Balanced Scorecards as a part of ‘cascade’ at the Business Unit Level.
Practical experiences with 2nd Generation Balanced Scorecard
There are still areas that prove difficult to deal with during the development process for both management terms and consultants charged with developing 2nd Generation Balanced Scorecard. The first of these areas concerns the development of the Strategic Linked Model. Management terms find the necessary selection of priority elements within their collective vision and strategic goals difficult. Another difficult area is target setting. Finally, Strategic Linkage Model documentation, although clear to those familiar construct, has proven less helpful when used for broadcast communication of strategy – it lack sufficient supportive information to be usefully stand alone as a communication concerning an organization’s strategic plans.
YOSHIANA MUTO
C1L007058
3rd Generation Balanced Scorecard
The 3rd generation Balanced Scorecard is based on a refinement of 2nd generation design characteristics and mechanisms to give better functionality and more strategic relevance. The origin of the developments stem from the issues relating to the target setting and the validation of strategic objective. The first destination statement was created as a final consensus estimate of the consequences at a particular future date of implementing the strategic objectives previously selected for the strategic linked model. By agreeing in this statement ‘how much’ of key things would have been achieved by this time the hope it would subsequently be easier.
From the outset, it has been clear that the primary focus of Balanced Scorecard is to be a control tool for managers. But there are different types of control exercised by managers: calls ‘strategic control’ rather than ‘management control’.
During 10 years since the advent of Balanced Scorecard many changes have been made to the physical design, utility and the design processes used to create tool within organizations. This evolution of Balanced Scorecard, at least in terms of these three parameters, can be largely attributed to empirical evidence driven primarily by observe weaknesses in the design process rather than in the architecture of the original idea.
NUR ESA YULIA PRATIWI
C1L007038
THE BALANCED SCORECARD METHOD:
FROM THEORY TO PRACTICE
Margarita IŠORAITĖ
Mykolas Romeris Universitety
Origins of the Balance ScorecardMethod
The Balanced Scorecard was developed by Robert Kaplan and David Norton (1992).When conceiving the BSC, Kaplan and Norton, maintained that companies lack sophisticated tools for the management of intangible or qualitative assets (e.g. customer satisfaction, processes quality, infrastructures, know-how). Intangible assets, however, seem vital in order to stay competitive in the future. So, the Balanced Scorecard provides ‘enablers’ that focus on the achievement of strategic goals in the future (leading indicators) as well as results (lagging indicators) to depict the effectiveness and efficiency of measures in the past. Strategies can be usually interpreted as a set of hypotheses of causes and effects. So within a BSC the relevant goals and corresponding indicators are linked to each other revealing this structure of causal relationships. Such relationships are both relevant within each perspective and also between them. Objectives of the “learning” perspective, for instance, serve as ‘enablers’ for the achievement of goals of the other ‘overarching’ perspectives
The BSC was originally created primarily as a measurement system and as an answer to a criticism concerning the unilateral measurement of the performance ability of a company. It was organised through four different perspectives:
· The financial perspective: to succeed financially, how should we appear to our shareholders? Examples of this perspective include financial ratios and various cash flow measures.
· The customer perspective: to achieve our vision, how should we appear to our customers? Examples of this perspective include the amount of time spent on customer calls and customer survey data.
· The internal perspective: to satisfy our shareholders and customers, what business processes must we excel at? The internal business processes that are often classified as mission oriented and support oriented. Examples of this perspective include the length of time spent prospecting and the amount of rework required.
· The learning perspective: to achieve our vision, how will we sustain our ability to change The starting point of the Balanced Scorecard is the vision and the strategy of a company.
The measurement focus of the BSC is used to accomplish the following management processes:
1) clarifyingand translating vision and strategy,
2) communicating and linking strategic objectives and measures,
3) planning, setting targets and aligning strategic initiatives and
4) enhancing strategic feedback andlearning.
The measures function as a link between the strategy and operative action. The core question is the selection of goals and measures to monitor the implementation of the vision and the strategy. Kaplan and Norton recommend a nine-step process for creating and implementing the balanced scorecard in an organization.
1. Perform an overall organizational assessment.
2. Identify strategic themes.
3. Define perspectives and strategic objectives.
4. Develop a strategy map.
5. Drive performance metrics.
6. Refine and prioritize strategic initiatives.
7. Automate and communicate.
8. Implement the balanced scorecard throughout the organization.
9. Collect data, evaluate, and revise.
NUR ESA YULIA PRATIWI
2. Comparing the Balanced Scorecard between private and public sectors
. Some of the facts which are especially important for adoption of the Balanced Scorecard approach in public sector are:
• The closeness to political interests needs a special thoughtfulness and sensibility.
• It is important to explain employees and representatives the Balanced Scorecard’s usefulness.
The implementation of a Balanced Scorecard requires an effective controlling system which assembles measures, values and other significant reporting data. Public sector still needs to catch up here. Accordingly from the beginning this should be allowed for.
• A balance between a tight schedule and adequate time for practice, communication and feedback during strategy discussion has to be found. To keep motivation high the rollout should be kept short. Adoption needs dynamics, especially in the Public Sector.
The Balanced Scorecard was developed, between others, by Robert Kaplan and David Norton. It was originally created primarily as a measurement system and as an answer to criticism concerning the unilateral measurement of the performance ability of a company. It was organised through four different perspectives: the financial perspective, the customer perspective, the internal perspective, the learning
perspective. The Balanced Scorecard provides the cornerstone for a new strategic management system. The scorecard enables organizations to introduce new governance and renew process focusing on strategy.
It does not rely on short-term financial measures as the sole indicators of performance but it does the following additional functions (Samir Ghosh, SubrataMukherjee, 2006):
1. Translate strategy to action, making strategy everyone’s job.
2. Manage the intangible assets e.g. customer loyalty, innovation, employee capabilities.
3. Leverage cross functionality without changing the structure of the business.
4. Measure what matters the critical few vs. The important many in real time, not just after the facts.
5. Create a daily management system for the day-to-day navigation of the business.
A Balanced Scorecard, however, suffers from some major drawbacks. The most important among
these are (Samir Ghosh, Subrata Mukherjee, 2006):
1. The Balanced Scorecard decomposes the organization’s primary objectives (financial perspective) into customer, internal process and learning and growth objectives (operating perspectives) in a way that is reminiscent of the way that the Dupont formula decomposed the return on capital employed metric into front-line operational measures.
2. To make scorecard useful, it should be prepared in conformity with the overall business strategies. Thus, companies may bias their scorecards to the dimensions that closely support their strategic direction.
3. It is difficult to integrate a company’s scorecard into its planning, budgeting and resource allocation process; especially when scorecard metrics are changed.
4. In order to make the scorecard more useful and practical it is necessary to assign weights to different measures (both financial and non-financial) on the basis of their importance to the organization for specifying trade-off between financial and nonfinancial measures.
5. To make the scorecard more efficient and useful it should include a large number of both financial and non- financial measures and these should be continually modified on the basis of measurement feedback.
6. There are some organizations like investment companies to which Balanced Scorecards have little value as they are interested in improving financial performance only.
7. The creditors, debenture holders and even shareholders of an organization are interested in financial performance rather than operating performance which compels the management to give much emphasis on financial perspective of the organization making the scorecard imbalanced.
IKA ZAINITA HUSNA WIDYANA
C1L007013
Article : Improving Corporate Governance with the Balanced Scorecard
Resource : Robert S. Kaplan
& Michael E. Nagel
Link : http://www.hbs.edu/research/facpubs/workingpapers/papers2/0304/04-044.pdf
The board Balanced Scorecard program starts with an Enterprise Scorecard that describes the strategy of the organization, including strategic objectives, performance measures, targets, and initiatives. The enterprise scorecard has a dual role. First, and primarily, it is a powerful internal communication and alignment tool that helps the CEO implement the corporate strategy throughout the organization. It provides a succinct yet comprehensive representation of the strategy and a powerful summary of the organization’s success in implementing it.
The Balanced Scorecard is used worldwide as a tool for implementing enterprise strategy. Recently, we have seen a growing trend among Balanced Scorecard adopters to use the tool for interactive discussions with their boards about strategic direction and to keep the board apprised of performance. In this respect, the Balanced Scorecard is now playing an important second role by providing the board members with the essential financial and nonfinancial information that enables them to fulfill their performance oversight responsibilities.
Initially, the executive team brings the enterprise strategy map and Balanced Scorecard for board review and approval. These documents represent the organization’s strategy; the Board must understand the strategy, and must judge that the strategy is capable of delivering long-term shareholder value at acceptable levels of business, financial, and technological risk
A Board Balanced Scorecard provides the following benefits:
• Defines the strategic contributions of the Board
• Provides a tool to manage the composition and performance of the Board and its committees
• Clarifies the strategic information required by the Board
These themes provide the architecture for defining the specific internal process objectives of the board. The strategic themes also provide accountability to the board’s primary committees. The governance committee has primary responsibility for performance oversight. The compensation committee has primary oversight in evaluating and motivating the senior executive team. The audit committee has primary responsibility for corporate compliance and communication to external constituencies. A board Balanced Scorecard program consists of executive scorecards that the full board and the compensation committee use to select, evaluate, and reward senior executives. By defining the strategic contributions of key executives, the tool helps the board isolate the performance expectations of an individual executive from the performance expectations of the enterprise.
Directors responsibilities are increasing, but the time they have available to perform their functions is not easily expanded. Directors have to be able to do their job better and smarter, not working longer and harder. The three-part BSC based system outlined in this paper offers a proven methodology to give directors more streamlined and more strategic information about the company. Board members have more relevant information for their decisions about the company’s future directions and its reporting and disclosure policies. Preparation and meeting time focuses on the company’s strategy, its financing, and its most important value and risk drivers. Executive scorecards inform the Board’s processes for executive selection, evaluation, compensation, and succession. And the Board itself has a scorecard to guide decisions about board composition, board processes and deliberations, and board evaluation.
Kartika Dimas S
C1L007012
"Building the Balanced Scorecard in Public Sector Organizations"
By Ralph Smith, Vice President - Strategic Services, Orion Development Group
A balanced scorecard is a management tool that provides senior executives with a periodic assessment of how well their organization is progressing toward achieving its strategic goals. The concept was introduced in the early 1990's by Dr. Robert Kaplan and Dr. David Norton, and has grown in popularity ever since. This appeal is easy to understand; strategy can be a nebulous concept that is difficult to understand and implement. Having a tool that can provide a concise view of progress towards desired organizational direction is obviously of value.
A typical strategy map and balanced scorecard are each divided into the same four perspectives: customer, financial, internal process, and learning and growth. Indeed, it is normal for each of the strategic objectives identified on a strategy map to have associated measures on the balanced scorecard. The logic behind the perspectives holds that customer satisfaction is driven in part by fiscal responsibility and in part by customer-focused processes. Process quality is in turn driven by the organization's ability to develop and grow its people and systems. This hierarchy is well-established, holds for most public sector organizations, and provides a useful framework for the development of scorecard measures.
A scorecard should contain just enough data to give a complete picture of organizational performance toward achieving the overall strategy… and no more. This typically means that each of the four perspectives should contain anywhere from 5-8 measures and result in an overall total of 20-25 measures. A typical barrier to scorecard implementation in public sector organizations is the tendency to want to measure everything, which can easily result in 50+ measures for the scorecard. Many organizations feel adding more measures will help clarify direction, when in fact it often does the opposite. Having so many measures can dilute focus and leave the senior team unsure what the top priorities really are. It is critical to limit the measures to a more manageable number.
Scorecard measures are typically a combination of lag and lead indicators. A lag measure is defined as one that reflects an outcome, or present-day bottom-line result. The ultimate lag measure in many public sector organizations is customer satisfaction, which can be measured through surveys, number of complaints, etc. Surveys quantifying the level of satisfaction reflect the success / failure of all the things the organization has done to try and keep their constituency happy. Lead measures are defined as those that drive future outcomes or bottom line success. Lead measures typically reinforce certain types of behavior within the organization. For example, a large state government organization had developed a host of new processes to make it easier for their customers to interact with them. Communication of the availability of the new processes was obviously critical to their utilization and success, so the state adopted a lead measure entitle "# of public outreach events". An outreach event had to fit certain defined parameters and was designed to get the word out regarding new processing options. Note the logic that outreach events is a measure that will better inform the public, hopefully make it easier for them to deal with the state, and as a result drive customer satisfaction higher. That makes the number of outreach events a lead measure that will theoretically drive the satisfaction lag measure. This measure reinforces the behavior that the organization needs to take the time and effort to communicate specific information to its customers, thereby giving them the highest probability of success.
http://www.odgroup.com/articles/public-sector-balanced-scorecard/
Raditya Megantara
C1L007023
article : "Balance scorecards"
Balanced Scorecard
The balanced scorecard is a new management concept which helps managers at all levels monitor results in their key areas. An article by Robert Kaplan and David Norton entitled "The Balanced Scorecard - Measures that Drive Performance" in the Harvard Business Review in 1992 sparked interest in the method, and led to their business bestseller, "The Balanced Scorecard: Translating Strategy into Action", published in 1996.
There's nothing new about using key measurements to take the pulse of an organization. What's new is that Kaplan and Norton have recommended broadening the scope of the measures to include four areas:
* financial performance,
* customer knowledge,
* internal business processes,
* learning and growth.
This allows the monitoring of present performance, but also tries to capture information about how well the organization is positioned to perform well in the future.
Kaplan and Norton cite the following benefits of using the balanced scorecard:
* Focusing the whole organization on the few key things needed to create breakthrough performance.
* Helping to integrate various corporate programs, such as quality, re-engineering, and customer service initiatives.
* Breaking down strategic measures to local levels so that unit managers, operators, and employees can see what's required at their level to roll into excellent performance overall.
Similarity to Hoshin Planning
The balanced scorecard has strong similarities to Hoshin Planning or hoshin kanri, the organization-wide strategic planning system used widely in Japanese companies. Both seek breakthrough performance, alignment, and integrated targets for all levels. The balanced scorecard suggests which specific areas should be measured for a balanced picture, but this isn't contradictory to Hoshin Planning. One thing that the Japanese emphasize is "catchball", the process of give and take between levels that helps to define strategy in Japanese companies. The balanced scorecard method seems to be more of a one-way street -- the executive team creates the strategy, and it cascades down from there.
One cautionary note
You tend to get what you measure for, since people will work to achieve the explicit targets which are set. Dr. Deming feared this effect, noting that people would skew their work to meet particular incentive pay targets. For example, emphasizing traditional financial measures tends to encourage short-term thinking - like rigging shipping schedules to make the monthly sales look good, or aggressively discounting to meet year-end targets. Kaplan and Norton, recognizing this, urge a more balanced set of measurements, which is good. Even so, people will work to achieve their
Raditya megantara
C1L007023
Article: "Balance scorecards"
scorecard goals, and may ignore important things which are not on the scorecard. Or, if the scorecard is not refreshed often enough, what looked like an important goal in January may not be very germane in June. Kaplan and Norton recognize these risks, and they don't pretend that they have said the final word on scorecards.
Source: http://www.isixsigma.com/offsite.asp?A=Fr&Url=http://www.skymark.com/resources/methods/balancedscorecard.htm
Yos Riski S.P.
C1L007005
Article : The Balanced Scorecard and the Business Excellence Model
Resource : http://www.2gc.co.uk/pdf/2GC-CP-EFQM-090327.pdf or Michael Shulver and Gavin Lawrie
e Balanced Scorecard and the European Foundation for Quality Management (EFQM)
Business Excellence Model are tools that use measures of an organisation’s performance to
drive organisational improvement – generally by highlighting current shortfalls in
performance – in areas of particular concern / or interest – to management teams. Both have
been widely adopted in recent years and benefit from the support of powerful advocates in the
form of current users, consultants, and soware suppliers. e purpose of this paper is to
compare the two tools. We show that despite superficial similarities, the two approaches come
from very different backgrounds and are designed and used using different processes. We also
show how the different approaches have a fundamentally different epistemological basis and
in turn, how this suggests a contingency, which should inform decisions about the choice of
either approach.
The EFQM Business Excellence Model is A framework designed to assist organisations achieve
business excellence through continuous
improvement in the management and deployment of
processes to engender wider use of best practice
activities. It enables the calculation of scores against
a number of criteria that can be used for either
internal or external “benchmark” comparisons. It is
hoped that the results of these relative comparisons
will lead to increased focus on improving key process
performance, and so generate “business
excellence” (EFQM, 1999).
The Balanced Scorecard is e Balanced Scorecard is a framework that
expresses an organisation’s strategy as a set of
measurable goals from the perspectives of owners/
investors, other external stakeholders, and the
organisation itself. If these goals and associated
measures, and targets are well chosen, the Balanced
Scorecard will help managers focus on the actions
required to achieve them, so helping the organisation
achieve its overall strategic goals and realise its
strategic visions (Kaplan and Norton, 1996).
In spite of sharing a number of apparent similarities, the Balanced Scorecard and the EFQM
Business Excellence Model are based on fundamentally different concepts about how best to
improve the performance of an organisation. e Balanced Scorecard favours a clear focus on
the actual strategies and associated implementation activities adopted by an organisation,
providing a robust tool onto which other management processes can be built – at the expense
of a more complex design processes: the Balanced Scorecard is based on a dynamic and
individual abstraction rooted in explicit cause and effect relationships.
e Business Excellence Model is based on a static design derived using “plausible logic” and
contains a standard set of strategic objectives used by all organisations using Business
Excellence Model. It has only implicit representations of the “generic” cause and effect
relationships that link the strategic objectives together; though in practice these are assumed
to be real … to represent objective reality (Bates et al, 2003). e use of this standard model
facilitates the use of a much simpler design process, and enables the “benchmark” comparison
of Business Excellence Model outputs in the entire universe of organisations using the tool.
Both models seem to have strengths and weaknesses depending on the purpose for which they
are being used. is paper has considered specifically their utility in connection with strategic
performance management, and has observed fundamental differences that create a
considerable disparity between the models. While the design of the Balanced Scorecard
supports its usage as a strategic management tool, the Business Excellence Model’s original
design as a diagnostic tool raises serious doubts about its effectiveness as a strategic
management tool. Some proposals have been made concerning ways to adapt Business
Excellence Model to be more useful in this respect (e.g. Russell, 1999): but even these cannot
get around the fundamental shortfall of the Business Excellence Model – its lack of explicit
strategic relevance to the organisation using it.
BAYU NAB'HAN RABBANI
C1L007034
Business Definition for: Balanced Scorecard Approach
an approach to the provision of information to management in order to assist strategic policy formulation and implementation to build the long-term value of the business. It emphasizes the need to provide the user with a set of information that addresses all relevant areas of performance in an objective and unbiased fashion. The information provided may include financial and non-financial elements and cover areas such as profitability, customer satisfaction, internal efficiency, and innovation. The term originates from the best-selling business book The Balanced Scorecard, written by Robert Kaplan and David Norton and published by Harvard Business School Press in 1996. Their approach applies the concept of stockholder value analysis, and is based on the premise that the traditional measures used by managers to see how well their organizations are performing, such as business ratios, productivity, unit costs, growth, and profitability, are only a part of the picture. Traditional measures are seen as providing a narrowly focused snapshot of how an organization performed in the past, and give little indication of likely future performance. In contrast, the Balanced Scorecard (BSC) offers a measurement and management system that links strategic objectives to comprehensive performance indicators.
Business Definition for: Balanced Scorecard
a system that measures and manages an organization's progress toward strategic objectives. Introduced by Robert Kaplan and David Norton in 1992, the balanced scorecard incorporates not only financial indicators but also three other perspectives: customer, internal business, and learning/innovation. The scorecard shows how these measures are interlinked and affect each other, enabling an organization's past, present, and potential performance to be tracked and managed.(dictionary.bnet.com)
RIYAN HARRIS
C1L007025
www.balancedscorecard.org
Balanced Scorecard Basics
The balanced scorecard is a strategic planning and management system that is used extensively in business and industry, government, and nonprofit organizations worldwide to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals. It was originated by Drs. Robert Kaplan (Harvard Business School) and David Norton as a performance measurement framework that added strategic non-financial performance measures to traditional financial metrics to give managers and executives a more 'balanced' view of organizational performance. While the phrase balanced scorecard was coined in the early 1990s, the roots of the this type of approach are deep, and include the pioneering work of General Electric on performance measurement reporting in the 1950’s and the work of French process engineers (who created the Tableau de Bord – literally, a "dashboard" of performance measures) in the early part of the 20th century.
The balanced scorecard has evolved from its early use as a simple performance measurement framework to a full strategic planning and management system. The “new” balanced scorecard transforms an organization’s strategic plan from an attractive but passive document into the "marching orders" for the organization on a daily basis. It provides a framework that not only provides performance measurements, but helps planners identify what should be done and measured. It enables executives to truly execute their strategies.
This new approach to strategic management was first detailed in a series of articles and books by Drs. Kaplan and Norton. Recognizing some of the weaknesses and vagueness of previous management approaches, the balanced scorecard approach provides a clear prescription as to what companies should measure in order to 'balance' the financial perspective. The balanced scorecard is a management system (not only a measurement system) that enables organizations to clarify their vision and strategy and translate them into action. It provides feedback around both the internal business processes and external outcomes in order to continuously improve strategic performance and results. When fully deployed, the balanced scorecard transforms strategic planning from an academic exercise into the nerve center of an enterprise.
Kaplan and Norton describe the innovation of the balanced scorecard as follows:
"The balanced scorecard retains traditional financial measures. But financial measures tell the story of past events, an adequate story for industrial age companies for which investments in long-term capabilities and customer relationships were not critical for success. These financial measures are inadequate, however, for guiding and evaluating the journey that information age companies must make to create future value through investment in customers, suppliers, employees, processes, technology, and innovation."
BUNGA PANDIANGAN
C1L007036
Kanji's Business Balance Scorecard
prod.informaworld.com/.../content~content=a713600657~db=all~order=page
The Balanced Scorecard was first devised by Kaplan and Norton (1992, Harvard Business Review , January-February, pp. 71-79) as a measurement framework that was expected to overcome some of the deficiencies of traditional performance systems. It gives a holistic view of the organization by simultaneously looking at four important perspectives (financial, customer, internal processes, innovation and learning). Apart from being a measurement framework, the Balanced Scorecard achieved recognition as a strategic management system. The new approach to performance measurement suggested in the Balanced Scorecard is consistent with the initiatives under way in many companies: cross-functional integration, continuous improvement, customer-supplier partnerships and team rather than individual accountability. In this sense, it fits well into the quality management philosophy, embracing some of the business excellence principles of Kanji's Business Excellence Model. Nevertheless, the Balanced Scorecard, as presented by Kaplan and Norton, is not without limitations. The causality links suggested among the four perspectives are particularly problematic and ambiguous. Additionally, it fails to recognize explicitly the contributions of important stakeholders, such as employees and suppliers. Taking into account the potentialities and limitations of the traditional Balanced Scorecard, we propose the development of a new framework integrating the elements of Kanji's Business Excellence Model and taking advantage of the strengths of its sound methodological support. The Business Scorecard may be improved by integrating the total quality management principles and critical success factors that constitute Kanji's Business Excellence Model. The Kanji's Business Scorecard we present in this paper is not only a conceptual model, but also a measurement model. Furthermore, Kanji's approach has the potential to give a deeper understanding of how achievements in the different areas feed each other to form a cycle of continuous improvement. Finally, the implementation of Kanji's Business Scorecard can help organizations to develop, cascade and implement a strategy for business excellence.
Yanuar Nugroho
C1L007019
"The Balanced Scorecard and the Business-Centric BI Architecture"
The balanced scorecard is generally presented by the Balanced Scorecard Collaborative (BSCol) as a strategic management framework, the use of which provides management the means to measure company performance in key business areas against target performance levels. It should be noted at the outset that the methodology is essentially silent about the data architecture and data management issues involved in deploying a balanced scorecard.
To develop a balanced scorecard, one typically performs a top-down mapping between business drivers, business strategies and value-driving business processes. One then selects financial and nonfinancial performance measures for those value-driving processes, with the measures drawn from four perspectives: financial performance, performance for the customer, internal operating performance and learning. For example, if a business competes on price, its balanced scorecard might include the following performance measures:
* Financial perspective: operating margin dollars and percentage.
* Internal perspective: unit cost, capacity utilization.
* Customer perspective: order-to-delivery cycle time, percent perfect orders.
* Learning perspective: number and percentage of certified customer service reps.
These financial and nonfinancial measures may be specific to the balanced scorecard initiative. More likely, some or all of these measures may be used within other analytic applications, such as customer analytics, where measures such as order-to-delivery cycle time are standard fare. In order to avoid stovepiping and achieve the so-called "single view of the truth," we must ensure that the data used by the balanced scorecard is consistent with the data used by other analytic applications that use the same measures. This means we must look at the broader BI architecture.
To develop a business-centric BI architecture for a given organization, one typically does a top-down mapping between business drivers, business strategies and value-driving business processes - the same analytic pathway followed when designing a balanced scorecard. The processes diverge after the initial mapping because of different objectives: the balanced scorecard is designed to present key strategic performance measures, whereas the business-centric BI architecture is aimed at specifying the ways that BI - business information, business analyses and structured business decisions - can be used to improve the core business processes that drive business performance and business value.
http://www.information-management.com/issues/20041001/1011014-1.html
DWI PRAWITA SARI
C1L007032
article by Artley, Will and Stroh, Suzanne, " Establishing an Integrated Performance Measurement System", vol 2.
Mark Graham Brown’s Balanced Scorecard Approach
Whereas the Kaplan/Norton balanced scorecard calls for a balance between four categories, the Mark
Graham Brown model (Brown, 1996) includes five categories.
1. Financial Performance - There is usually no shortage of performance measures in the finance
category. When selecting this set of measures, however, consideration should be given to going
beyond the traditional financial measures of budget performance and variances from a standard.
Other traditional measures for areas, such as payback methods on capital justification, are focused
primarily on accounting earnings and return on investment targets.
Benchmarking data on the cost of performing the many different functions within an organization can
be used to both structure financial measures and for determining future targets or goals. Many
government agencies rely on simple metrics to tell them whether they are spending their available
funding on target so that none will be left at the end of a fiscal year. Unfortunately, from a big picture
standpoint, important information on the cost of doing business and the level of output or productivity
cannot be derived from this kind of traditional measure. Each organization needs to determine the
cost of providing their products and services as well as to determine whether they are providing them
at an optimal cost compared to their competitors or best-in-class benchmarks.
Innovations of contemporary performance measures, while not providing a ?silver bullet” (i.e., a quick
fix), provide advances in capital budgeting techniques as demonstrated by Economic Value-Added
(EVA). EVA is defined as after-tax operating income minus the total annual cost of capital. This
concept can be adapted to the government sector by measuring trends in indirect or overhead rates
as part of the cost of doing business, and helps normalize any differences between large DOE sites
and smaller ones by focusing on percentage reductions or increases. Theoretically, this measure
provides incentives for managers to improve economic performance by increasing earnings without
using more capital. (At DOE sites, this concept relates to the desire to accomplish more science or
environmental clean-up for the same dollar, or making other productivity gains). Other contemporary
measures use techniques such as activity-based cost management to help define productivity and
better understand unit costs. In DOE, the cost accounting standards being applied at each
organization is helping to better understand the cost of work and is beginning to have an impact on
the traditional ?full cost recovery” concepts of the past on organizations whose missions have
changed and who must become more cost competitive.
2. Process/Operational Performance - Process or operational performance measures can:
• Be both proactive and preventative in nature.
• Focus on a work activity that is occurring.
• Represent lagging indicators of end-state performance.
While many organizations focus on output measures in this category, great value can be gained by
selecting critical, in-process metrics that are predictors of the quality of the products or services
provided, such as cycle time, error rates, or production rates. An example of this concept for a
research organization can be the number of new technology ?licenses issued” (an output measure).
Assuming there is a correlation between licenses issued and patents issued and, ultimately, to
inventions disclosed, an in-process measure of licenses issued could be ?number of inventions
disclosed.” The inventions disclosed then become a leading indicator that is a predictor of the
number of licenses issued.
Customer Satisfaction - Many organizations are now beginning to measure customer satisfaction,
and most are doing so in very elementary ways. The International Quality Survey conducted by Ernst
& Young, for example, found that customer satisfaction measures were of major or primary
importance for strategic planning in 54.3 percent of the surveyed organizations in 1988 and 80.7
percent in 1991, and were expected to be of importance in 96.7 percent of the organizations in 1994.
(Ernst & Young 1990)
Mature measures of customer satisfaction have the following characteristics:
• Measurement is done frequently, at the point of delivery, and with large sample sizes.
• Focus groups, phone interviews, and surveys are the tools used to measure satisfaction.
• A strong use of statistical tools is in place for measurement analysis.
• The measures provide immediate performance feedback to drive improvement.
• Relationships between customer satisfaction measures and other strategic measures are
carefully documented.
4. Employee Satisfaction - Your Human Resource Manager may track statistics such as employee
turnover rate or report annual survey statistics on morale, but often this information is not viewed
by senior management on a regular basis. A number of mature organizations have determined that
there is a linkage between the health and satisfaction of their employees and the performance of
their companies. Companies such as AT&T and Federal Express, for example, have developed very
good metrics to inform management of the health and well-being of its workforce. (Brown 1996)
The Malcolm Baldrige National Quality Award criteria calls for excelling companies to have both hard
measures (such as turnover, grievances, and absenteeism) and soft measures (such as employee
morale and employee climate surveys) of employee satisfaction. It also notes that the company
should compare levels of employee satisfaction to that of its competitors and other organizations in
general.
5. Community/Stakeholder Satisfaction - For organizations that operate for, and on behalf of,
government institutions and many for-profit enterprises, maintaining good relations with the
community and other stakeholders is an important element in measuring success. In a sense, the
community/stakeholders allow the organization to operate as long as conformance to laws is
maintained (Atkinson 1997).
Typical community/stakeholder satisfaction measures include:
• An assessment of the organization’s reputation in the community.
• An assessment of the organization’s performance in public health and safety and environmental
protection.
• Economic impact and corporate citizenship efforts within the community.
• Compliance to laws/regulations.
GIAT PADABELA
C1L007054
“Balance Scorecard Business”
The Balanced Scorecard is about managing the transmission of strategy, while leadership is about motivating people to give their best to achieve a worthwhile goal: These two different approaches work together in high performance organizations.
The idea of the "Balanced Business Scorecard" is an important one for managing people to deliver the goals of your business.
"Balance" comes from the alignment of financial performance measures with those related to customers, internal business processes, and innovation and learning: Financial measures alone will not ensure success nor will any of the other performance measures taken in isolation.
The Balanced Scorecard is just that: Balanced. And while it will not measure the "correctness" of your strategy, it will help you monitor and measure the progress you are making to achieve that strategy across all areas of operations.
This correctness of strategy is a key part of leadership – after all, it's often said that "management is about doing things right, while leadership is about doing the right things." Leadership and management are different (but complementary.)
ERI KHAERIYAH
C1L007007
Artocle and Report of “To beat the odds against successful CRM,
use Gartner’s CRM process map together
with the Balanced Scorecard framework.”
by : Kevin Murphy and Randy Russel
Use the Balanced Scorecard to Execute CRM Strategy
this decribes of hOW
the key to Balanced Scorecard methodology in the company
Creating a strategy map is the first step in designing a Balanced Scorecard.
Balanced Scorecard framework:
• Financial: How will we create long-term shareholder value?
• Customer: What is our value proposition?
• Process: What processes are key to driving our strategy?
• Learning and growth: What competencies, technologies and culture do we
need?
Figure 1: The basic Balanced Scorecard strategy map
The four perspectives of a Balanced Scorecard strategy map
Financial perspective: If we succeed, how will we look to our shareholders? Create a
strategy map by asking what strategic success will look like from the shareholders’ point of
view. Assuming that long-term shareholder value is the ultimate financial objective, the
next question is what strategic path will produce the desired results: a long-term growth
strategy or a short-term productivity strategy?
• Achieve long-term growth by establishing new revenue sources or increasing
customer value.
• Achieve a productivity strategy by focusing on improving cost structure or
improving asset utilization.
Customer perspective: How must we look to our customers to achieve our vision? Next,
define the strategic objectives for your specific customer value proposition. The key to
designing an effective strategy is to establish a long-term basis for market differentiation.
As Treacy and Wiersma discuss in their book, “The Disciplines of Market Leaders,” there
figure 2: Balanced Scorecard strategy map applied to CRM
Figure 3: Customer management strategy at a retail bank
could u practised this method for your company?
so, check oyt in link :
http://www.docin.com/p-14834966.html
The balance on the balanced scorecard a critical analysis of some of its assumptions
by: Hanne Norreklit
Link: http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6WMY-45C0TPM-V&_user=10&_rdoc=1&_fmt=&_orig=search&_sort=d&_docanchor=&view=c&_searchStrId=1136683822&_rerunOrigin=scholar.google&_acct=C000050221&_version=1&_urlVersion=0&_userid=10&md5=c588e3323c199cd5674c06b24e6e8b3e
Latihan jawaban bu Ulfah
The business management course is designed to develop students’ knowledge and understanding of business management theories, as well as their ability to apply a range of tools and techniques.
Post a Comment