BALANCED SCORECARD

BY: SAMPADA HARSHE

INTRODUCTION
The technique was developed by Prof. Robert Kaplan & David Norton. Balanced score card approach provides a clear prescription as to what companies should measure in order to balance the financial perspective.

INCREASING IMPORTANCE OF INTANGIBLES

TANGIBLE SERVICE QUALITY INTANGIBLE CUSTOMER RETENTION
CUSTOMER CONFIDENCE

REVENUE

CONCEPT OF BALANCED SCORECARD

A way of Measuring organizational, business unit or department success A way of Balancing long term and short term actions A way of Balancing different measures of success such as: Financial, Customer, Internal Operations & Human Resource System & Development. A way of tying strategy to measures to action.

NEED FOR BALANCED SCORE CARD

MISSION Why we Exist? VALUES What is important to us? VISION What we want to be ? STRATEGY Our Game Plan

THE GAP ZONE

TOTAL QUALITY MANAGEMENT What we must improve?
EMPOWERMENT/PERSONAL OBJECTIVES What I need to do?

MISSION Why we Exist? VALUES What is important to us? VISION What we want to be ? STRATEGY Our Game Plan STRATEGIC INITIATIVE What are the priorities

TOTAL QUALITY MANAGEMENT What we must improve?

EMPOWERMENT/PERSONAL OBJECTIVES What I need to do?

STRATEGIC OUTCOME
SATISFIED SHAREHOLDER DELIGHTED CUSTOMER EFFICIENT & EFFECTIVE PROCESS MOTIVATED & PREPARED WORKFORCE

STRUCTURE OF BALANCED SCORECARD

FINANCIAL PERSPECTIVE
GOALS Survive MEASURES Cash Flow Quarterly sales growth & operating income by division Increase market share & Return on equity

Succeed

Prosper

CUSTOMER PERSPECTIVE
GOALS New Products MEASURES Percent of sales from the new product On-time delivery as defined by customers Share of key accounts purchase

Responsive Supply
Preferred Supplier Customer Partnership

Number of co-operative engineering efforts

INTERNAL BUSINESS PERSPECTIVE

GOALS
Technology Capability Manufacturing Excellence Design Productivity

MEASURES
Manufacturing Geometry V/S Competition Cycle Time, Unit Cost & Yield

New Product Introduction

Silicon efficiency & engineering efficiency Actual introduction schedule V/S plan

LEARNING & GROWTH PERSPECTIVE

GOALS
Technology Leadership Manufacturing Learning Product Focus

MEASURES
Time to develop next generation

Process time to maturity Percent of products that equal 80% of sales New product introduction V/S competition

Time to market

KEY VALUE DRIVERS

a) Environmental drivers b) Organizational drivers c) Group or departmental drivers

d) Individual drivers

BENEFITS OF BALANCED SCORECARD

Alignment of strategy with key performance objectives at all levels of the organization Measuring and managing business performance effectively Strategic feedback Maximizing the overall IT investment Double-loop feedback Outcome Metrics

CONCLUSION
Balanced scorecard attempt to address a key management issue: companies often fail to turn strategy in to action

THANK YOU