BALANCED SCORECARD

WHAT IS BALANCED SCORECARD?

Balanced Scorecard is a performance metric used in strategic management to identify & improve various internal functions and their resulting external outcomes. It attempts to measure and provide feedback to organizations in order to assist in implementing strategies and objectives. It provides organizations with the ability to clarify vision and strategy and translate them into action.

WHY BALANCED SCORECARD?

Improve organizational performance by measuring what matters Increase focus on strategy and results Align organization strategy with workers on a day-to-day basis Focus on the drivers key to future performance Improve communication of the organizations Vision and Strategy Prioritize Projects / Initiatives

BALANCE SCORECARD MANAGEMENT SYSTEM

Implement a framework to align and focus the organization from top to bottom on its strategy

Identify the related key change initiatives required to realize the strategy and mobilize the organization

Create feedback processes at all levels to evaluate progress against strategy, monitor and manage issues and priorities, and measure performance and contribution to the business.

OBJECTIVES
The Balanced Scorecard, developed by Kaplan and Norton at Harvard University, provides an excellent framework for defining goals and objectives and translating them into specific measures. Financial perspective - Emphasizes the stakeholder concern about how efficient & effective the unit is at using its resources, their return on investment, shareholder value. Customer perspective -Emphasizes satisfying the needs of customers and thus defining corporate image. Process perspective -Emphasizes excellence at performing internal processes and in employee competencies. Innovation perspective -Emphasizes continuous improvement and the creation of value.

GOALS & MEASURES

FINANCIAL PERSPECTIVE
GOALS Survive Succeed MEASURES Cash flow Quarterly sales Growth Operating income by division Increase in market share Increase in Return on Equity

Prosper

CUSTOMER PERSPECTIVE
GOALS MEASURES

New products
Responsive supply Preferred suppliers Customer partnerships

% sales from new products % sales from proprietary products On-time delivery (customer definition) Share of key accounts purchases Ranking by key accounts Number of cooperative engineering efforts

PROCESS PERSPECTIVE
GOALS MEASURES
Technology Benchmark vs. competition capability Manufacturing Cycle time excellence Unit cost Yield Design Silicon efficiency productivity Engineering efficiency New product Schedule: Actual vs. Planned innovation

INNOVATION PERSPECTIVE
GOALS Technology leadership Manufacturing learning Product focus MEASURES Time to develop next generation Process time to maturity

% products equalling 80% of sales

Time to market New product introduction vs. competition

CAUSE & EFFECT LOGIC

FINANCIAL PERSPECTIVE IN BRIEF

BALANCE SCORECARD & FINANCIAL OBJECTIVES

PLACE FOR FINANCIAL PERSPECTIVE

BALANCE SCORECARD FOR AN AUTOMOBILE COMPANY

Category Financial (50%) Customer (20%) Measure EVA Unit Profit Market Growth Customer satisfaction survey Dealer satisfaction survey Above average rank on industry quality survey Decrease in dealer delivery cycle time Suggestions/employee Emp. satisfaction survey Weightage 25% 15% 10% 10% 10% 10% 10% 5% 5%

Internal Process (20%)

Innovation and Learning(10%)

BSC FOR MARKETING NATURAL GAS VEHICLES

o Ratio of natural gas vehicles per compress natural gas fueling stations

o Type coverages (how many different natural gas vehicle types were available)
o Natural gas vehicle investment pay-back time o Sales per type

o Subsidies par automobile

KEY BENEFITS OF USING BALANCED SCORECARDS

CRITICISMS OF BALANCED SCORECARD

Lack of a well Defined Strategy Too much focus on the lagging measures Use of Generic Metrics Self-serving managers

REFERENCES
http://www.bscdesigner.com/use-of-balanced-scorecard-inbanks-and-financial-organizations.htm Balanced Scorecard A performance assessment tool | Human Resource Blog : QubeHRM Why Does Business Need a Balanced Scorecard? - Harvard Business Review Management Control Systems, The Balanced Scorecard, and Responsibility Accounting

Using a Balanced Scorecard Approach to Measure Performance

Bell curve for balance scorecard - Google Search

CONSOLIDATED & PRESENTED BY

SHILPA AVHAD PRANAV KOCHA 03 25

TRUPTI SHARMA
BHARTI SOLANKI

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ROSHAN THAKUR
SHRUTI VANMALI RACHITA VYAS

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