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Balanced ScorecardStrategic Planning & Performance

Management

January 10, 2017

Gaetano Lombardi

PMO@HCL


Purpose

• Give a short introduction on Balanced

Scorecard

• Quick guide on how to apply Balanced

Scorecard in Project/Program Management


Content

• Dashboard and Balanced Scorecard

• Balanced Scorecard as Management Tool

• Balanced Scorecard

• Balanced Scorecard Application in Project

Management


Dashboard

Project Dashboard

Project Portfolio Dashboard


Dashboard vs Balanced Scorecard

Source: adapted from www.BSCDesigner.com

Project Dashboard Balanced Scorecard

Identify goals of the dashboard and metrics

Map business goals with a cause and effect link

Design a visual interface with charts and diagram

Define & Align KPI with business objectives

Monitor performance regularly Define an action plan

Performance MonitoringStrategic Planning &

Performance Managementis used for

StrategicOperational is more oriented to


Balanced Scorecard

The Balanced Scorecard is a strategic planning and

performance management system that is used extensively in

business and industry, government, and nonprofit

organizations worldwide

• to align business activities to the vision and strategy of

the organization,

• improve internal and external communications,

• and monitor organization performance against strategic

goals.

Source: Balanced Scorecard Institute


Conceptual Foundations

It was originated in 1992 [1] by Drs. Robert Kaplan

(Harvard Business School) and David Norton as a

performance measurement framework that added

strategic non-financial performance measures to traditional

financial metrics to give managers and executives a more

'balanced' view of organizational performance.

Ref [1]: Kaplan RS and Norton DP, "The Balanced Scorecard - Measures that drive performance", Harvard Business

Review, 1992 Jan/Feb, pp71-79


BSC: Usage and satisfaction quadrant

Source: Management Tools and Trends 2015, Bain & Company


BSC: Usage and Satisfaction historical

Source: Management Tools 2015 – An Executive’s Guide, Darrell K. Rigby, Bain & Company


Balanced Scorecard: success reasons

• It has been a breakpoint in management culture

• It’s simple, as concept, to understand

• Provide an easy way to communicate strategy and

business goals

• Cascade and align organization

• Performance Management

On the other hand

• Effective implementation not so easy


Formalizing Company’s Strategy

Formalizing Business Goals

BSC high level conceptual process steps

Source: adapted from www.BSCDesigner.com

What we are today. The purpose of the

company

Mission

A top-level goal of the company

Vision

List or a map of business goals

Business Goals

Activities a company needs to follow

Objectives

Cause-and-Effect connected objectives

Strategy Map

Progress Tracking

KPI for

Progress Monitoring

KPI for

Action Plan and Objectives

Actions


Mission / Vision / Values / Strategic Themes / Results

Strategy Map/Objectives Measures Targets Initiative

Financial Perspective

Customer Perspective

Internal Perspective

Learning & Growth

Balance Scorecard structure

Management Part Measurement Part


Four Perspectives


Four Perspectives

Financial: If we succeed, how will we look to our shareholders?

Internal: To satisfy our customers and shareholders,at which processes must be excel?

Learning and Growth: To excel in our processes, what must organization learn?

Customer: To achieve our vision, what customer needs must we serve?


Strategy Map – Classic Kaplan/Norton

Customer Value Proposition

Productivity Strategy

Operations Management Processes

SupplyProductionDistribution

Risk Management

Customer Management Processes

SelectionAcquisitionRetention

Growth

Innovative Processes

Opportunity IdentificationR&D Portfolio

Design / DevelopLaunch

Regulatory and Social Processes

EnvironmentSafety and Health

EmploymentCommunity

Human Capital

Information Capital

Organisational Capital

Product / Service Attributes

Long-Term Shareholder Value

Improve Cost Structure

Increase Asset Utilisation

Expand Revenue Opportunities

Enhance Customer Value

Growth Strategy

Relationship Image

Price Function Service Partnership BrandQuality Availability Selection

Culture Leadership Alignment Teamwork

Financial

Perspective

Customer

Perspective

Internal

Perspective

Learning &

Growth

Perspective


Strategy Map: Example

Perspectives

Financial Perspectives



Learning & Growth

To excel in our processes,

what must organization

learn?

To satisfy our customers and

shareholders, at which

prcesses must be excel?

To achieve our vision, what

customer needs must we

serve?

If we succeed, how will we

look to our shareholders?

Vision

Strategic Themes Objectives KPI Target Initiatives

Make project profitable

according to budgeted PM of

xx %

IncreaseCustomer

Satisfaction Through Superior

Quality

MinimizeRework

LEANCulture


Performance Management: KPI

Key

Performance

Indicator

Mission / Vision / Values / Strategic Themes / Results

Strategy Map/Objectives Measures Targets Initiative

Financial Perspective



Learning & Growth


KPI: SMART

S Specific: The KPI is clear and focused toward performance targets

M Measurable: The KPI can be expressed quantitatively

A Attainable: the KPI targets are reasonable and achievable

R Realistic: The KPI is directly pertinent to the work being done

T Time-Based: The KPI can be measured in a given time period


KPI Example

R: 15 %

C: 20%

S: 30%

Perspectives




Learning & Growth

Vision






serve?




Improve Design Quality

Reduce fault slipping

through from Design to Test R: 15%, C: 20%,

S: 30%

Improve testing activities in operation, Resp xx

Report monthly statistical report on FST Design to FT, Resp xy



learn?



xx %

IncreaseCustomer


Quality

MinimizeRework

LEANCulture

Reduce Fault Slipping Through from Design to Test by…Fault Slipping Through is

computed as …


Align day to day work

Vision & MissionStrategy

Strategic Objectives

Actions


Cascading / Alignment

Tier1 Scorecard

Strategy defined in a top level

strategy map and scorecard

Tier 2 Scorecard

Align strategy definition in business

and support unit scorecard

Tier 3 Scorecard

Aligned personal objectives defined

by job description and personal

objectives

Tier 1

Tier 2 Tier 2 Tier 2

Tier 3

Str

ate

gy

Opera

tion

Ta

ctics


TIER 1 Example


TIER 2 Example

Perspectives




Learning & Growth

Vision






serve?




Reduce fault slipping through from

Design to Test by …R: 15%, C: 20%,

S: 30% Report monthly statistical report on FST Design to FT, Resp xy

Number of major CI violation

recorded before release, equal to by 0 Improve BUT by adding automated code inspection, Resp xx



learn?

Trained Number of team in the use of

xx tool by


BUT Effectiveness

xPilot and prepare training course and CI rule selection, Resp XX

Plan and execute training, Resp XX



xx %

IncreaseCustomer


Quality


Reduce test cycle time by

automated test

BUTEffectiveness


BSC Implementation: Project Manager/PMO

• Organization widely uses BSC as Planning

Management and Performance Measurement tool

• It doesn’t


Organization widely uses BSC


BSC as management tool in Project / Program / Portfolio

Underestimation

PM Intervention

Forsake

Low Visibility Tasks

Quality of

Work

Rework

Project Delay

Project Workload+

+

-

-

-

+

+

+

-

+

Low quality

Multitasking

Productivity

Lower

productivity

Replanning+

Optimism+

++

Optimistic

Replanning

+


Example

Perspectives




Learning & Growth

Effective AB studies proposal and selection 1

Prepare RCA on Architectura l weakness based on identi fied s tinker areas , Resp xx

Staff and execute s tudies , Resp xx

identi fication of Scrum Team and early involvment to refine AB improvement

Product backlog i tems, Resp xx

Return of Investment computed as

saved TR cost vs AB investment study by 30%

Involve PM and s takeholders to get AB funding for AB s tudies to be fina l i zed in fi rs t release, Resp xx

Number AB Studies to be finalized to

first Release 3

Number AB Studies to be executed in

first Release

Strategic Themes



learn?






serve?



Establish Architectural Board

TargetKPIObjectives

Vision

Enhance Feature Estimation Capability

Review in Sprint Retrospective the effectiveness of SPID estimation technique, Resp xx

Ensure Delivery of High Priority Features as agreed

in Product backlogMust Feature as agreed at Wave

planning releasable by each official

Release 95%

All developers trained to apply SPID

technique by …

Col lect a l l Sprint Retrospective results and analyze SPID appl ication, Resp.xx

Initiatives

Must User Stories as in Sprint backlog

releaseble by each sprint 95%

100%

Identify and share in project best

practices / good examples in applying

SPID by … 2

EnhanceEstimation skills

capability

Develop Organization

Performance DB for benchmarking



xx %

Increasecustomer /

stakeholder confidence in our financial planning

IncreaseCustomer


Quality

ReinforceArchitectural framework to enhance quick

feature development

Increase feature development

predicability & ensure High

priorities features delivery

Improve Product Architectural Framework

Performance

SPID Statistically Planned Incremental Deliveries, E. Miranda


Summary

• BSC it’s one of the most used technique for Strategic

Planning and Performance Management.

• It’s as much effective when it is used to plan /

communicate / align strategy of an organization, BUT it

could be used for planning/align strategy for PMO or

large program.

• BTW it can be used as well as Performance

Management technique, even to address tactic /

operational level (project)


Dashboard or Balanced Scorecard ?

Project Dashboard Balanced Scorecard


References

• Articles– Ref [1]: Kaplan RS and Norton DP, "The Balanced Scorecard - Measures that drive performance", Harvard

Business Review, 1992 Jan/Feb, pp71-79.

– Ref [2]: Kaplan RS and Norton DP. "Putting the Balanced Scorecard to Work, Harvard Business Review,

September-October 1993. pp134-147 (Presents a series of cases about the balanced scorecard. Also

documents Kaplan and Norton's process for developing a balanced scorecard.)

– Ref [3]: Kaplan RS and Norton DP. "Using the Balanced Scorecard as a Strategic Management System".

Harvard Business Review, January-February 1996 pp75-85 (Presents Kaplan and Norton's thoughts on how

the balanced scorecard can be used as a strategic management system.)

• Books– Kaplan, Robert S. and Norton, David P. The Balanced Scorecard: Translating Strategy into

Action, Boston: Harvard Business Press, 1996.

– Niven, Paul R. Balanced Scorecard Step by Step. New York: Wiley, 2006.

– The Balanced Scorecard applied at Ericsson AB, Seminar paper, Anna Lena Bischoff

• Resources– Balanced Scorecard Institute www.balancedscorecard.org

– BSC Designer Professional Balanced Scorecard Software and Training http://www.bscdesigner.com/

http://www.balancedscorecard.org/

http://www.bscdesigner.com/


grazie!

Gaetano Lombardi

Project Portfolio Business Manager @ HCL

linkedin: https://www.linkedin.com/in/gaetano-lombardi-8239505?trk=hp-

identity-name

balanced scorecard - pmi-nic.org · pmi-nic© - tutti i diritti riservati 28/04/2016 conceptual...

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