Anda di halaman 1dari 49

Balanced Scorecard

A general overview

Gartner

Group suggests that over 50% of large


US firms have adopted the BSC
Bain & Co finds that about 44% of organisations
in North America use the BSC
Germany, Switzerland, and Austria - 26% of
firms use BSCs
The widest use of the BSC approach can be found
in the US, the UK, Northern Europe and Japan
http://www.ap-institute.com/Balanced
%20Scorecard.html

How many companies use the


Balanced Scorecard?

The

balanced scorecard is for everyone in


the organization. This means that the
balanced scorecard should be cascaded to
all departments/business units and teams
both operating and support units. This is
the only way to ensure successful strategy
execution...
Sandy Richardson, Strategy Focused
Business Solutions Inc.

Why?

developed in 1992 - Robert Kaplan and David


Translating corporate vision and strategy into

Norton
a set of

strategic objectives that drive behavior and


performance
built upon the premise that measurement motivates
and that measurement must start with a clearly
described strategy
pioneering work of General Electric on performance
measurement reporting in the 1950s 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

history

http://www.balancedscorecard.org/BSCResources/AbouttheBalancedScorecard/tabid/55/Default.aspx

establishing

the linking between Balanced


Scorecard and the Strategic Management
system
BSC not linked to the Strategic
management turns from the fundamental
system into just the collection of the
isolated indicators which do not have any
influence on the strategic development of
the company

The Balanced Scorecard and the


Strategic Management system

Better Strategic Planning powerful framework for building


and communicating strategy
Improved Strategy Communication & Execution strategy
with all its interrelated objectives is mapped on one piece of
paper allows companies to easily communicate strategy
internally and externally
Better Management Information

forces organisations to design key performance indicators for their


various strategic objectives
Research shows that companies with a BSC approach tend to report
higher quality management information

Improved Performance Reporting create meaningful


management reports and dashboards to communicate
performance both internally and externally
Better Strategic Alignment align their organisation with the
strategic objectives
Better Organisational Alignment help to align
organisational processes such as budgeting, risk management
and analytics with the strategic priorities

What are the Key Benefits of


using Balanced Scorecards?

Developed by the Balanced Scorecard Institute

Step
Step
Step
Step
Step
Step
Step
Step
Step

One: Assessment
Two: Strategy
Three: Objectives
Four: Strategy Map
Five: Performance Measures
Six: Initiatives
Seven: Automation
Eight: Cascade
Nine: Evaluation

Building & Implementing a Balanced Scorecard:


Nine Steps to SuccessTM
http://www.balancedscorecard.org/BSCResources/TheNineStepstoSuccess/tabid/58/Default.aspx

Developed by the Balanced Scorecard Institute

Step One: Assessment- BSC Development Plan


assessment of the organizations Mission and Vision,
challenges (pains), enablers, and values
Preparation of a change management plan for the
organization
conducting a focused communications workshop to identify
key messages, media outlets, timing, and messengers

Step Two: Strategy - Customer Value


Strategic Results, Strategic Themes, and Perspectives, are
developed -focus attention on customer needs and the
organizations value proposition

Step Three: Objectives- Strategy Action


Components
Strategic Objectives are first initiated and categorized on
the Strategic Theme level, categorized by Perspective,
linked in cause-effect linkages (Strategy Maps)

Building & Implementing a Balanced Scorecard:


Nine Steps to SuccessTM
http://www.balancedscorecard.org/BSCResources/TheNineStepstoSuccess/tabid/58/Default.aspx

Developed by the Balanced Scorecard Institute

Step Four: Strategy Map-Cause-and-Effect


Links
the cause and effect linkages between the enterprisewide Strategic Objectives are formalized in an enterprisewide Strategy Map

Step Five: Performance Measures


Develop Performance Measures are for each of the
enterprise-wide Strategic Objectives
Lead and lag measures are identified
Determine targets and thresholds, and
Develop baseline and benchmarking data

Step Six: Initiatives


Strategic Initiatives are developed that support the
Strategic Objectives

Building & Implementing a Balanced Scorecard:


Nine Steps to SuccessTM
http://www.balancedscorecard.org/BSCResources/TheNineStepstoSuccess/tabid/58/Default.aspx

Developed by the Balanced Scorecard Institute


Step Seven: Automation
Software
Performance Reporting
Knowledge Sharing

Step Eight: Cascade-key to organization alignment


Cascading a balanced scorecard means to translate the corporate-wide
scorecard (referred to as Tier 1) down to first business units, support units or
departments (Tier 2) and then teams or individuals (Tier 3)
Cascading translates high-level strategy into lower-level objectives,
measures, and operational details
Determine performance measures at each level more operational and
tactical

Step Nine: Evaluation


Strategy Results
Revised Strategies

Building & Implementing a Balanced Scorecard:


Nine Steps to SuccessTM
http://www.balancedscorecard.org/BSCResources/TheNineStepstoSuccess/tabid/58/Default.aspx

The

Balanced Scorecard is just one of


three levels in the business management
process:
Top level: Company-wide Strategy maps
Middle Level: Balanced Scorecard
Bottom Level: Initiatives

Business Management Process

Exh.
10-11

Performance Measures

Financial

Has our financial


performance improved?

What are our


financial goals?

Customer

Do customers recognize that


we are delivering more value?

Internal Business Processes


Have we improved key business
processes so that we can deliver
more value to customers?

Learning and Growth

Are we maintaining our ability


to change and improve?

What customers do
we want to serve and
how are we going to
win and retain them?

What internal business processes are


critical to providing
value to customers?

Vision
and
Strategy

The Balanced Scorecard: From


Strategy to Performance
Measures

http://www.managerialaccounting.org/Balanced%20Scorecard.htm

Translates

a companys mission and


strategy into a comprehensive set of
performance measures
Financial and nonfinancial aspects

The Balanced Scorecard

Who are
What do

your stakeholders?
your stakeholders need?
What are their strategic goals?
Create a Strategy Map-identify your
priorities
Consider the four perspectivesBusiness Processes, Customer
Relationship, Education and Growth, and
Finance

How to define strategic goals

strategy

map view

articulates the strategy in a series of linked


objectives representing the most important
priorities for the organization

scorecard

view

Gives specific measures and targets


represent the yardstick and expected level of
success
the strategic initiatives or action programs that
are the ways to achieve targets outside of
current capabilities.

Elements
http://www.lenskold.com/content/articles/rigatuso_aug07.html

The

Learning & Growth Perspective

The

Business Process Perspective

The

Customer Perspective

The

Financial Perspective

includes employee training and corporate cultural


attitudes related to both individual and corporate
self-improvement
refers to internal business processes

the importance of customer focus and customer


satisfaction in any business
Lead indicators

Perspectives
Robert S. Kaplan and David P. Norton, Using the Balanced Scorecard as a Strategic Management System, Harvard
Business Review (January-February 1996): 76.

Early BSC

Organization & Learning: people, teams,


training and recruiting
Internal Process: business process,
automation, technology & plant
infrastructure
Customer: marketing, value proposition,
and product/service in the eyes of the
customer
Financial: revenue, growth, earnings,
corporate governance, shareholder value

Perspectives of BSC

Modern BSC
http://www.ap-institute.com/resources_whitepapers.asp

http://www.torontospin.com/torontospin/events/doc/presentations/20041124-MarkKozak
-Holland.pdf

http://www.torontospin.com/torontospin/events/doc/presentations/20041124-MarkKozak
-Holland.pdf

http://www.torontospin.com/torontospin/events/doc/presentations/20041124-MarkKozak
-Holland.pdf

historical internal (company) data (from


operational systems)
historical external data (from third parties)
forecast external data (from third parties)
forecast company internal data (financial
and non-financial)
target values (eg EPS targets, Sales
Quotas, etc)
Data availability existing vs. to be
collected

Data

Decreed by executive management


Negotiated between the operational and
line management
Selected from an industry benchmark
Selected from competitors known (or
assumed) values
Selected as % change over last years
historical value

Target values

Key

Performance Indicators

reflect the critical success factors of an organization


must be quantifiable

stay

with the same definition from year to

year
set targets for each Key Performance
Indicator
identify everything that is easy to measure
and count
collect and report the data on everything that
is easy to measure and count

Key Performance Indicators

help

organizations understand how well


they are performing in relation to their
strategic goals and objectives
Show whether the organization is on track
or not
serve to reduce the complex nature of
organisational performance to a small
number of key indicators

Key Performance Indicators


(KPIs)

Good Key Performance Indicators vs. Bad

Bad:

Good:

Title of KPI: Increase Sales


Defined: Change in Sales volume from month to month
Measured: Total of Sales By Region for all region
Target: Increase each month
What needs to be corrected?

Title of KPI: Employee Turnover


Defined:
no of employees resigned + no of employees terminated due to performance
number of employees at the beginning of the year
Measured: information available at human resources
Target: Reduce Employee Turnover by 5% per year

Example KPI

Who should design your indicators?


Strategist and a line manager

Do you have good indicators?

indicators should not repeat each other, but taken together, they should describe
90% of your company or business unit

Are your indicators easy to measure?


should be easy to understand and measure

How many indicators?

three or four indicators in each category. If you have more, you are overloading
your scorecard

Key performance indicators and


BSC

Marr, B. (2010) How to design


Key Performance Indicators,
Management Case Study,
The Advanced Performance
Institute (www.apinstitute.com).

http://www.apinstitute.com/download
s/100608%20How
%20to%20design
%20Key
%20Performance
%20Indicators.pdf

Type

of data

Raw
Progress
Change
Source

of data
Frequency of data
Target performance
graphs

KPI

http://www.enterprise-dashboard.com/2007/04/05/difference-between-balanced-scorecard-and-enterprise-dashboard/

Culture

change
Human resources
tasks, responsibilities
Performance appraisal, bonuses
Measurement

and data collection


Information management

Effect on the organization

http://www.scorecardtrainings.com
http://www.balancedscorecard.org
http://www.bscdesigner.com

Some sources

1. Recruitment KPI
2. Training KPI
3. Health and safety KPI
4. Performance KPI
5. Employee loyalty KPI
6. Working time KPI
7. HR efficiency KPI
8. Compensation KPI
9. Labor relation KPI
10. Regulation compliance KPI
11. Employee satisfaction KPI
Attitude about compensation and benefits.
Attitude about coworkers.
Attitude about supervisors / managers.
Attitude about promotions, training.
Attitude about work tasks.
12. HR budget KPI
13. Job leaving KPI

1.
2.
3.
4.

Job leaving ratio per year.


Job leaving ratio per department.
Average age of employees that retire.
Percentage of early retirements

14. Workforce information KPI


http://www.humanresources.hrvinet.com/recruitment-key-performance-indicators-kpi/

Human Resource KPI

1. Customer care KPI


Customer care KPIs include KPIs such as frequency impact to customers, the rate of service charges /
profits etc.
2. Customer appraisal KPI
They are KPIs related to appraisal customer such as number of new customers, average sale per VIP
customer etc.
3. Complaints of customer KPI
They include KPIs such as Complaints are resolved in the first time, the rate of complaints by sector
etc.
4. Market share KPI
They are KPIs related to market share of company such as market share of the company compared
with the entire market, relative market share etc.
5. Customer loyalty KPI
These KPIs measure customer loyalty of company. Some KPIs are total customer lost, the rate of lost
customers lost after purchasing first time etc.
6. Shops and supermarkets KPI
Some KPI of this sector such as the rate of profit / per shop, sales turnover / location. These KPIs
measure effectiveness of sale channel of shop or supermarket.
7. Sales contact by telephone KPI
These ratios relate to effectiveness of contacting by telephone of salesman.
8. Sales rep KPI
These ratios relate to effectiveness of sales representative staff such as the rate of response / total
sent, time to answer a request by customers.
http://www.humanresources.hrvinet.com/sales-kpi/

Sales KPI

1. Public relations KPI


PR KPI include KPIs related to appraisal indicators of Public relations
such as effective PR items, press releases, conducting survey, the
level of awareness of the enterprise through the public relations did
etc.
2. Promotion KPI
Promotion KPI include KPIs related to appraisal indicators of promotion
activities in marketing such as the rate of sales in promotion period
and before the promotion, percentage of sales in promotion and after
promotion etc.
3. Advertisement KPI
Advertisement KPI include KPIs related to appraisal indicators of
advertisement activities in marketing such as the cost of advertising
on the 1000 target audiences, the level of awareness of the product
etc.
4. E-marketing KPI
E-marketing KPI include KPIs related to appraisal indicators of Emarketing in marketing such as the rate of new visitors, number of
page views / visitors etc
http://www.humanresources.hrvinet.com/marketing-kpi/

Marketing KPI

1. Manufacturing cycle time


Measured from the Firm Planned Order until the final production is reported. It usually takes
into account the original planned production quantity verses the actual production quantity.
2. Defects per million opportunities (DPMO)
DPMO is a Six Sigma calculation used to indicate the amount of defects in a process per one
million opportunities.
Calculation: Total Number of Defects / Total Number of Opportunities for a Defect. Then
multiply the answer by 1 Million.
3. Average production costs of items
Average production costs of items produced within measurement period.
4. Mean-time between failure (MTBF)
The average time between equipment failures over a given period i.e. the average time a
device will function before failing. It is the reliability rating indicating the expected failure
rate of equipment.
5. Loss ratio of material per order
This is lost ratio of material per order. The rate is usually 3 5% custom types orders.
6. Rate of material defect by causes of material itself
By total material defect due to the nature of that material, measured by the number and value
of money.
7. Rate of damaged material by error of workers
By total material damage because of worker error, measured by the number and/or value of
money.
8. Scrap value %
Scrap value as a percentage of production value

General production KPIs


http://www.humanresources.hrvinet.com/production-kpi/

1. Delivery on time
Formula: the number of delivery on time / total delivery.
Apply this formula to each provider and entire company every month.
2. Delivery is not enough quantity, quality
Formula: with the total number of delivery with enough quality/ quantity / the number of
total delivery .
3. Quantity bought over required
This rate determine the number of products using in actual in comparison with quantity
planned.
This rate determines the effectiveness of the purchasing order.
The rate may be identified in quantity or money.
5. Purchasing cost
By value of purchasing / sales value
Compare this with the percentage rate as planned.
6. Cost of purchasing units
This rate is total purchase cost / total sales.
7. Transaction cost unit of purchasing
Formula = (Total cost of purchasing a total cost of goods) / sales turnover.
You can compare this rate with different goods in order to view transaction costs a high or
low
8. Suppliers rating.
Number of suppliers accounting for 80% of the value of goods
The number of suppliers of goods per year
Number of suppliers be removed per year..
Number of new suppliers per year..

Purchasing / Procurement KPI


http://www.humanresources.hrvinet.com/purchasing-procurement-kpi/

General Financial KPIs


1. Weighted Average Days Paid
Weighted Average Days Paid in Receivables Management
2. Weighted Average Days Past Due
Average days past due for open AP invoices weighted by open amount
3. Weighted Days Delinquent Sales Outstanding
Weighted Days Delinquent Sales Outstanding in Receivables Status dashboard
4. Weighted Terms Outstanding
Weighted Terms Outstanding in Receivables Status dashboard
5. Receipts Amount
Receipts Amount in Receivables Management
6. Revenue (P&L)
Revenue KPI in Profit and Loss Analysis Dashboard
7. T&E per Head
Travel and entertainment expenses / Headcount
8. Total Receipts
Total Receipts (Rolling 30 Days) in Receivables Status dashboard
9. Unapplied Receipts
Unapplied Receipts Amount
10. Weighted Average Days Due
Sum of days until due weighted by invoice amount for open AP invoices

Financial KPI
http://www.humanresources.hrvinet.com/financial-kpi/

1. Operating income: Operating Income equals Gross Profit minus SG&A Expenses. It is the
income from current operations.
2. Gross profit: Gross Profit equals Revenue minus Cost of Goods Sold. It identifies the
amount available to cover other operating expenses.
3. Gross profit margin: Gross Profit Margin equals Gross Profit divided by Revenue, expressed
as a percentage.
4. Cost of goods sold (COGS): Cost of Goods Sold includes all expenses directly associated
with the production of goods or services the company sells (such as material, labor,
overhead, and depreciation). It does not include SG&A.
5. Operating margin: Operating Margin equals Operating Income divided by Revenue,
expressed as a percentage.
6. Goodwill: Goodwill is an accounting term used to reflect the portion of the book value of a
business entity not directly attributable to its assets and liabilities.
7. Total Assets: Total Assets are everything of value that is owned by a company.
8. Accounts Payable: Money owed (payable) to suppliers for goods or services purchased on
credit that must be paid within a year.
9. Long-Term Debt: Long-Term Debt represents the amount of borrowings due more than one
year from the date of the balance sheet.
10. Total Liabilities: Total liabilities represent the sum of all monetary obligations of a
business and all claims creditors have on its assets.
11. Cumulative Annual Growth Rate (CAGR):
12. Cash Flow Return on Investments (CFROI): This is similar to ROI, but the only
difference is CASH is used inplace of Profit.
13. SG&A expenses: Selling, General, and Administrative Expenses include all salaries,
indirect production, marketing, and general corporate expenses.
14. Net profit margin: Net Profit Margin equals the Total Net Income divided by Revenue,
expressed as a percentage.
15. Shares Outstanding: Shares Outstanding is the outstanding number of shares of the class
of common stock that is most actively traded.

General Accounting KPIs

16. Total Equity: Total Equity equals Preferred Stock Equity + Common Stock Equity.
17. Total Current Assets: Total Current Assets equals Cash and Equivalents + Receivables +
Inventories + Other Current Assets.
18. Other Current Assets: Other Current Assets includes prepayments, deferred charges,
and amounts (other than trade accounts) due from parents and subsidiaries.
19. Inventories: Inventories is merchandise bought for resale or supplies and raw materials
purchased for use in revenue producing operations.
20. Net Receivables: Net Receivables are amounts owed to the company, net of any
provisions for bad debts.
21. Cash: Cash consists of cash and may include cash-like items such as short-term
investments that can be quickly converted to cash.
22. Net Change in Cash: Net Change in Cash is the difference between the Cash and Cash
Equivalents at the beginning of the reporting period minus the amount at the end of the
reporting period.
23. Common Stock Equity: Common Stock Equity is the amount of shareholders equity
attributable to common stock.
24. Preferred Stock Equity: Preferred Stock Equity is the amount of shareholders equity
attributable to the preferred stock issued by the parent company.
25. Other Noncurrent Liabilities: The liabilities that are not assigned to Long-Term Debt or
deferred Income Taxes.
26. Short-Term Debt: Short-Term Debt represents the amount of borrowings (principal and
interest) that must be paid in the near future.
27. Other Noncurrent Assets: Assets that are not assigned to Net Fixed Assets or
intangibles.
28. Total Current Liabilities: Total Current Liabilities equals Accounts Payable + Short-Term
Debt + Other Current Liabilities.
29. Other Current Liabilities: Other Current Liabilities includes all other liabilities not
assigned to Short-Term Debt or Accounts Payable.
30. Net Fixed Assets: Net Fixed Assets are the assets of a company that are of a relatively
permanent nature and are not intended for resale, such as property, plants, and
equipment.

General Accounting KPIs


http://www.humanresources.hrvinet.com/sample-kpi/

Anda mungkin juga menyukai