Balanced Scorecard

Balanced Scorecard

^—    New Approach to strategic management was developed in the early 1990‘s

^—    Dr.Robert Kaplan, David Norton ( HBS)

^—    Recognizing the weakness and vagueness of previous management approaches

^—    This approach provides a clear prescription as what companies should measure in order to balance the financial, customer , learning & growth and internal business process

^—    The balance scorecard is a management system that enables organizations to clarify their vision and strategy and translate them into action

^—    It provides feedback around both internal business process and external outcomes in order to continuously improve strategic performance & results

^—    Companies must make to create future value through investment in customers, suppliers, employees, process, technology, innovation

^—    The balance scorecard suggests that we view organization from four perspectives and to develop metrics, collect data and analyze it relative to each of these perspectives

1. Learning & Growth Perspective

^—    Includes employee training, corporate cultural attitudes related to both individual & corporate self improvement

^—    In knowledge- worker org , People – the only repository of knowledge are the main resource in the current climate of rapid change in technology

^—    Knowledge workers has be put in continuous learning process

^—    They constitute the essential foundation for any success of organization

^—    Learning is more than training

2. Business Process Perspective

^—    Refers to internal business process

^—    Allows the managers to know how well their business is running and whether its products and services conform to customer requirements

^—    Designed by person who know the process intimately

Two kinds of business process

^—    Mission oriented processes

^—    Support processes - benchmark

3. Customer Perspective

^—    Realized the importance of customer focus and customer satisfaction

^—    Poor performance in this perspective indicates the future decline

^—    Developing metrics for satisfaction – customers should be analyzed in terms of kinds of customer, kind of process which we are providing a product or service to those customer groups

4.Financial Perspective

^—    Timely & accurate funding data will always be a priority

^—    Enough handling and processing of financial data

^—    With the implementation of a corporate database, more process can be centralized and automated

^—    Risk assessment and cost- benefit data also should be added