Excellent ppt slides on bsc balanced scorecard, bsc presentation, bsc ppt

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Managing
Corporate Performance
with Balanced Scorecard

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You can download these
excellent slides at :
www.HR-Management-Slides.com

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Contents :
1. Corporate Performance Scorecard
2. Strategy Map Framework
3. Four Perspectives in Balanced Scorecard
4. Identifying Key Performance Indicators
5. Strategy Map in Corporate Functions (HR, IT,
Finance and Marketing)

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Corporate
Performance Management

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Performance Management Framework
Identifying
Defining
Measuring
Monitoring
Reporting
Key
Performance
Indicators
Company
strategy
Vision
Mission
Strategy
Strategy Map

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Three critical components for effective process of
performance management
Performance
Management
Infrastructure
Performance
Management
Culture
Performance
Management
Process
Performance management
cycle is continuous and
consistent
Culture that is based
on performance
accountability
Logistic support and
performance management
administration
Performance Management Component

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STRATEGY
Plan and Execute
Monitor and Evaluate
Reward and Coach
Set Measures and Target
Performance Management Cycle

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Managing Performance with
Balanced Scorecard
Balanced Scorecard is a management tool that
provides stakeholders with a comprehensive
measure of how the organization is progressing
towards the achievement of its strategic goals.

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• Balances financial and non-financial measures
• Balances short and long-term measures
• Balances performance drivers (leading
indicators) with outcome measures (lagging
indicators)
• Leads to strategic focus and organizational
alignment.
Managing Performance with
Balanced Scorecard

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4 Perspectives in Balanced Scorecard
If we succeed, how will
we look to our
shareholders?
Financial Perspective
To achieve our vision,
how must we look to our
customers?
Customer Perspective
To satisfy our customers,
which processes must we
excel at?
Internal Perspective
To achieve our vision, how
must our organization learn
and improve?
Learning & Growth
Perspective
The Strategy

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Strategy and Balanced Scorecard
Mission –
Why We
Exist
Vision –
What We
Want to Be
Values –
What’s
Important
to Us
Strategy :
Our Game
Plan
Strategy
Map :
Translate the
Strategy
Balanced
Scorecard :
Measure and
Focus
Strategic
Outcomes
Satisfied
Shareholders
Delighted
Customers
Excellent
Processes
Motivated
Workforce

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• The strategy map framework is presented in the
following slides.
• This framework describes the types of strategic
target that should be presented in each perspective,
namely the financial perspective, customers, internal
business process, and learning & growth perspective.
Strategy Map Framework

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Cost Efficiency
Long-term Shareholder
Value
Revenue Growth
Price Availability BrandServiceQuality
Operations
Management
Processes
Human Capital
Customer
Management
Processes
Innovation
Processes
Regulatory
and Social
Processes
Organization Capital Information Capital
Strategy Map Framework
Financial
Customer
Internal Process
Learning & Growth

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Financial Perspective
• In private companies, the financial perspective is the
main objective (ultimate goal) – without having to
sacrifice the interests of other relevant stakeholders
(community, environment, government, etc.)
• In the financial perspective, the strategic goal is the
long-term shareholder value. This goal is driven by
two factors, namely : revenue growth and cost
efficiency.

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Long-term
Shareholder Value
Revenue Growth
Improve Cost Structure
Increase Asset Utilization
Cost Efficiency
Strategic Objectives in Financial
Expand Revenue
Opportunities
Enhance Customer Value

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Customer Perspective
• This perspective is very instrumental, because without
customers, how can a company survive?
• Customer perspective covers the following elements:
• Customer acquisition
• Customer retention
• Customer profitability
• Market share
• Customer satisfaction

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Price Availability BrandServiceQuality
Customer Acquisition
Customer Satisfaction
Customer Retention Customer Profitability
Market Share
Strategic Objectives in Customer

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Internal Process Perspective
• This perspective reflects the processes in key business
that should be optimized in order to meet the needs of
the customers.
• There are four main themes in this perspective, namely:
• Operations Management Process
• Customer Management Process
• Innovation Process
• Regulatory and Social Process

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Operations
Management
Processes
Customer
Management
Processes
Innovation
Processes
Regulatory
and Social
Processes
Processes that
produce and
deliver products
and services
Processes that
enhance customer
value
Processes that
create new
products and
services
Processes that
improve
communities and
the environment
• Supply
• Production
• Distribution
• Selection
• Acquisition
• Retention
• Growth
• New Ideas
• R&D Portfolio
• Design/
Develop
• Launch
• Environment
• Safety &
Health
• Employment
• Community
Strategic Objectives in Internal Process

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Learning & Growth Perspective
• This perspective reflects the capability that a company
should have, namely:
• Human Capital
• Organization Capital
• Information Capital
• This perspective shows us that good human resource
development system, organizational system and
information system forms a solid foundation for improving
company performance.

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Human Capital
Organization
Capital
Information
Capital
• Skills
• Knowledge
• Attitude
• Systems
• Database
• Networks
• Culture
• Leadership
• Organization
Development
Strategic Objectives in
Learning & Growth

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Strategy Map Template
• The following slide displays the strategy map template
comprising of four perspectives : financial, customer,
internal business process, and learning & growth.

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Improve
Cost Efficiency
Enhance Long-term
Shareholder Value
Increase Revenue Growth
Enhance
Brand Image
Build High
Performance Products
Achieve
Operational
Excellence
Develop Strategic
Competencies
Drive Demand
through Customer
Relation
Management
Manage Dramatic
Growth through
Innovation
Implement Good
Environmental
Policy
Build Learning
Culture
Expand Capabilities with
Technology
Strategy Map Template
Financial
Customer
Internal Process
Learning & Growth
Expand
Market Share

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Identifying Key Performance
Indicators (KPI)

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Vision
Mission
and Values
Strategy
Finance
Customer
Internal Business
Process
HR
Development
Key Performance
Indicators
Key Performance
Indicators
Key Performance
Indicators
Strategic Objectives
KPI = Measurement or
indicator that provides
information on how far we
have succeeded in
achieving the strategic
objectives
Key Performance Indicators (KPI)

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• The measure of success must show clear, specific and
measurable performance indicators.
• The measure of success should be declared explicitly and in
detail so that it is clear what is being measured.
• Costs to identify and monitor the measure of success should
not exceed the value that will be known from the measurement.
Guidelines in Formulating the KPI
KPI Guidelines

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Relevant to the
Strategic Objective
Does KPI have a linkage with the strategic
objectives?
Controllable Are the KPI achievements still under control?
Actionable Can any action be taken to improve the
performance?
Simple Is the KPI easy to explain?
Credible Is the KPI not easy to manipulate?
KPI Guidelines

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KPI Family Dimension
Productivity Measures employee output (units/
transactions/ dollars), the uptime levels and
how employees use their time (sales-to-
assets ratio, dollar revenue from new
customers, sales pipeline).
Measures the ability to meet and/or exceed
the requirements and expectations of the
customer (customer complaints, percent
returns, DPMO -- defects per million
opportunities).
Quality

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KPI Family Dimension
Profitability Measures the overall effectiveness of the
management organization in generating
profits (profit contribution by
segment/customer, margin spreads).
Measures the point in time (day/week/
month) when management and employee
tasks are completed (on-time delivery,
percent of late orders).
Timeliness

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KPI Family Dimension
Process
Efficiency
Measures how effectively the management
organization incorporates quality control, Six
Sigma and best practices to streamline
operational processes (yield percentage,
process uptime, capacity utilization).
Measures how effectively the management
organization leverages existing business
resources such as assets, bricks and mortar,
investments (sales per total assets, sales per
channel, win rate).
Resource
Utilization

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KPI Family Dimension
Cost
Savings
Measures how successfully the management
organization achieves economies of scale and
scope of work with its people, staff and
practices to control operational and overhead
costs (cost per unit, inventory turns, cost of
goods).
Measures the ability of the management
organization to maintain competitive economic
position in the growth of the economy and
industry (market share, customer
acquisition/retention, account penetration).
Growth

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KPI Category Dimension
DirectThe actual raw data value as measured (e.g.,
sales volume).
Percent
The comparison of the changes in
performance of one value relative to the
same value at a different time, geography,
etc. (e.g., percentage change in sales vs.
last year).

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KPI Category Dimension
Simple
Ratio
The comparison of one value relative to another to
provide a benchmark for comparison of
performance (e.g., average sales per day).
Index
A combination of several separate measures
added together that result in an overall indicator
of performance (e.g., (company sales
growth)/(industry sales growth) for a specific
geography).

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KPI Category Dimension
Composite
Average
The addition of the weighted averages of several
similar measures that result in an overall composite
indicator of performance (e.g., customer satisfaction
composite is mixture of results from surveys, focus
groups and product returns).
Statistics
Multiple measures such as mean, variance,
standard deviation and variance that capture the
spread and distribution of the performance
measures (e.g., sales distribution by demographics,
geography, channel).

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Strategy Map for
Corporate Functions (HR, IT, Finance and
Marketing)

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Vision
Mission
Strategy
Integration between Corporate and
Division/Department
Corporate
Scorecard
Division
Scorecard
The Division Scorecard
is built by referring to the
corporate scorecard

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Financial
Customer
Internal Process
Learning & Growth
Corporate
Finance
Corporate
Marketing
Production
Supply Chain
R & D
Corporate HR
Info
Technology
Corporate and Division Scorecard

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Corporate and Division Scorecard
• Division Scorecard is formulated by looking at the four
perspectives in Corporate Scorecard.
• As shown in the previous slides, the learning & growth
perspective provides guidelines for developing scorecard at
the Human Resource and IT divisions, while the internal
process perspective provides guidelines for developing
scorecard at the supply chain division or R&D.

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Corporate and Division Scorecard
Sample from GE Lighting Business Group
Level of Organization Financial Customer Internal Process Learning & Growth
Corporate Scorecard Increase profit margin Improve customer Increase inventory turns Increase level of
satisfaction level Improve internal process employee competency
Division Scorecard Optimize cost of production Improve customer Increase inventory turns Increase level of
Reduce inventory levels satisfaction level Improve internal process employee competency
Plant Scorecard Optimize cost of production Increase percent of Increase inventory turns Number of "on the
Increase yields ratio on time delivery Reduce number of defects job training" delivered
Increase labor productivity Reduce customer per million Number of performance
Reduce inventory levels complaints per million Improve quality incoming coaching session
materials
Maintain optimum equipment
speed
Frontline Employee Reduce waste Reduce equipment downtime Number of "on the
Scorecard Reduce overtime Reduce number of poor job training" attended
Increase production rates solders Number of performance
Reduce number of cracked coaching session
bulbs attended
The above example shows how the scorecard at corporate level is
cascaded to division level, and further to plant level and employee level.

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Division Strategy Map Template
• The strategy map for HR Division, Information Technology
Division, Finance Division, and Marketing Division are
presented in the following slides.

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Optimize HR Efficiency
Drive Long term
Shareholder Value
Enhance People & Organizational
Effectiveness
Achieve HR
Process
Excellence
Develop Strategic &
Functional HR Competencies
Build Strategic
Employee
Competencies
Drive
Organizational
Performance
Enhance Technology
for HR
Create Climate for
HR Action
HR Strategy Map Template
Financial
Customer
HR Internal Process
Learning & Growth
Create Positive Work
Environment
Provide Quality
HR Service
Provide High
Performance People

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Optimize IT Efficiency
Drive Long term
Shareholder Value
Enhance IT Impact on
Enterprise Outcome
Maintain a
Reliable IT
Infrastructure
Develop Strategic &
Functional IT Competencies
Develop Effective
Decision
Support System
Propose and Deliver
Transformational
Applications
Enhance IT Tools that
Enhance the IT Function
Promote Customer-
focused Culture
IT Strategy Map Template
Financial
Customer
IT Internal Process
Learning & Growth
Deliver Consistent, High
Quality IT Service
Provide Business Units with
Innovative IT Solutions

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Optimize Financial Efficiency
Drive Long term
Shareholder Value
Enhance Finance Effectiveness on
Enterprise Outcome
Achieve Finance
Process
Excellence
Develop Strategic &
Functional Finance
Competencies
Develop Financial
Information to
Improve Decision
Making
Ensure Compliance
with Regulatory
Requirements
Use Technology to Improve
Financial Information
Delivery
Finance Strategy Map Template
Financial
Customer
Finance Internal Process
Learning & Growth
Deliver Responsive & Efficient
Finance Operations
Provide Clear & Reliable
Required Disclosure
Promote Customer-
focused Culture

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Optimize Marketing Efficiency
Drive Long term
Shareholder Value
Increase Sales
Revenue
Develop Innovative
Marketing
Communication
Program
Develop Strategic &
Functional Marketing
Competencies
Develop
Marketing Business
Intelligence
Accelerate
New Product
Development
Ideas
Enhance Technology
for Marketing
Foster Creative Thinking
& Innovative Solutions
Marketing Strategy Map Template
Financial
Customer
Internal Process
Learning & Growth
Create Satisfied and
Loyal Customers
Enhance Brand
Image
Develop Effective
Customer Relation
Management

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Recommended Further Readings:
1. Robert Kaplan and David Norton, Strategy Map : Converting Intangible
Assets into Tangible Outcomes, HBS Press
2. Robert Kaplan and David Norton, Alignment : Using the Balanced
Scorecard to Create Corporate Synergies, HBS Press

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