Power Point BSC

What is the Balanced Scorecard?

The Balanced Scorecard (BSC) is a comprehensive The Balanced Scorecard (BSC) is a comprehensive management performance control tool with a strong management performance control tool with a strong focus on vision and strategy. focus on vision and strategy.

The strategy is translated into specific tactical The strategy is translated into specific tactical performance-driving activities. performance-driving activities.

Measures are established for each activity. Measures are established for each activity.

The Balanced Scorecard provides a four perspective frameworkto formulate strategy and translate it into operational terms

BSC as a Performance Measurement Tool

The The

Balanced ScorecardBalanced Scorecard

VisionVisionMissionMissionStrategyStrategy

Performance Measures

The Balanced Scorecard - Indicators

1. The Learning and Innovation

This perspective includes employee training and

corporate cultural attitudes related to both individual and corporate self-improvement. 2. The Internal Business

Process

This perspective allow the managers to know how well their business is running, is there any scope to improve

anyfurther

The Balanced Scorecard - Indicators

4. The Financial Perspective

Kaplan and Norton do not disregard the traditional need for financial data. Timely and accurate financial data will

always be a priority

3. The Customer Perspective

This perspective emphasises customer focus and customer

satisfaction.

Every Measure in BS culminates in to financial outcome -

ORGANIZATIONAL LEARNINGTraining Time, Turnover, Staff Satisfaction Score

BUSINESS PROCESS IMPROVEMENTCycle Time, Defects, Activity Costs

CUSTOMER SATISFACTIONMarket Share, Survey Scores, Complaints

FINANCIALSTRENGTH

Product Profitability,EBIT

Financial Innovative and Learning

Internal Business Process

Customer

Assured market share

R& D Achievement

New product line

Customer retention (gets hooked to the Co).

Growth in revenue.

Employee training

Productivity Cost effective product

Growth in market

Test marketing

Better production planning

Assured acceptance

Balanced Scorecard – Cause Effect Relationship Among Indicators

Examples-

Indicators -

The Balanced Scorecard –Indicators/Measures/Controls

BS incorporates all significant controls in one frame.

BSC Maintains balance between – BSC Maintains balance between – • Short term and long term objectivesShort term and long term objectives• Financial and Non-Financial PerformanceFinancial and Non-Financial Performance• Lagging and Leading IndicatorsLagging and Leading Indicators• Internal and External measuresInternal and External measures

How does BSC benefit organizations?

BSC acts as a Strategic Management/Implementation Tool Which Helps in ……

Validation/Enhancement of Strategy Validation/Enhancement of Strategy Getting clear consensus on the sameGetting clear consensus on the sameArticulation and Communication of Vision & Mission into key Articulation and Communication of Vision & Mission into key strategic objectivesstrategic objectivesCreation of Strategic Maps at corporate and SBU levelCreation of Strategic Maps at corporate and SBU level Alignment of the entire organization to the strategyAlignment of the entire organization to the strategyBrings in Clarity and Transparency – enhanced understanding of Brings in Clarity and Transparency – enhanced understanding of strategic objectives down to operating levelstrategic objectives down to operating levelMake customer focused organizationMake customer focused organizationProvides unambiguous measures for performance controlProvides unambiguous measures for performance controlConsensus on ownership of objectives at all levels of managementConsensus on ownership of objectives at all levels of managementPrioritization of strategic action plans Prioritization of strategic action plans Makes strategic planning a continuous process Makes strategic planning a continuous process

How does BSC benefit organizations?

Provides a “BALANCED” Performance Management Tool –

Adequate balance between lead and lag measures/indicatorsAdequate balance between lead and lag measures/indicatorsHelp organization remain pro-activeHelp organization remain pro-activeProvides macro perspective to senior management – Provides macro perspective to senior management –

no more longer working in “silos” no more longer working in “silos” Clear linkage and alignment of individual and enterprise Clear linkage and alignment of individual and enterprise performanceperformanceFlexible KRA’s depending on the business needs of the organizationFlexible KRA’s depending on the business needs of the organizationHelps achieve financial results by managing simultaneously non Helps achieve financial results by managing simultaneously non financial measuresfinancial measures

Some of the Success stories through BSC….

Conclusion –

BSC is highly effective management system to align company’s vision & mission to strategy and activities

BSC provides management with a comprehensive picture of company’s operations

BSC to be used as an integral part of a company’s planning process in order to realize its fullest potential