Download - -Balance Scorecard.ppt
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8/18/2019 -Balance Scorecard.ppt
1/19
Apri 2005
Balance Score CardBalance Score Card
A Tool For Appraisal Of A Tool For Appraisal Of Corporate PerformanceCorporate Performance
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8/18/2019 -Balance Scorecard.ppt
2/19
April 2005 Raja
Success Factors Of Industrial AgeSuccess Factors Of Industrial Age
Industrial ageIndustrial age
Economies of scaleEconomies of scale
Economies of scopeEconomies of scope
TechnologyTechnology
Cont..Cont..
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8/18/2019 -Balance Scorecard.ppt
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April 2005 Raja
Information age.Information age. Customer loyalty through customer relationships.Customer loyalty through customer relationships.
Innovative products and services.Innovative products and services.
igh !uality C"#T$%I#E& products and services at lo'igh !uality C"#T$%I#E& products and services at lo'
cost and 'ith short lead time.cost and 'ith short lead time.
Employee s(ills) motivation and capa*ilities.Employee s(ills) motivation and capa*ilities.
Adaptation of information technology. Adaptation of information technology.
In information age, ORGANISATIONS mustcreate future value through investments in
customers,suppliers,employees,
technology, process and innovation.
Success Factors Of InformationSuccess Factors Of Information
AgeAge
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8/18/2019 -Balance Scorecard.ppt
4/19
April 2005 Raja
Balanced ScorecardBalanced Scorecard
alancedalanced scorecardscorecard translatestranslatesOrganisation!s vision, mission and strategy intoOrganisation!s vision, mission and strategy intoa comprehensive set of performance measures,a comprehensive set of performance measures,
"hich forms a frame"or# of strategic"hich forms a frame"or# of strategicmeasurements of management system.measurements of management system.
alanced score card records achievement ofalanced score card records achievement of
financial o$%ectives, $ut also includesfinancial o$%ectives, $ut also includes&'R(OR)AC' drivers of these o$%ectives.&'R(OR)AC' drivers of these o$%ectives.
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8/18/2019 -Balance Scorecard.ppt
5/19
April 2005 Raja
Balanced ScorecardBalanced Scorecard
alanced scorecard is ORGANIS'* around four distinctalanced scorecard is ORGANIS'* around four distinct
perspectives +perspectives +
Financial.Financial.
Customer.Customer.
Internal.Internal. Innovation & learning.Innovation & learning.
The measure is called $alanced- as it reflects the $alanceThe measure is called $alanced- as it reflects the $alance
provided $et"een short term long term o$%ectives,provided $et"een short term long term o$%ectives,
financial and non/financial measures and $et"een e0ternalfinancial and non/financial measures and $et"een e0ternal
and internal performance perspectives.and internal performance perspectives.
Importance of $alanced scorecard lies in the fact that it hasImportance of $alanced scorecard lies in the fact that it has
evolved from an improved measurement system to a coreevolved from an improved measurement system to a core
management system.management system.
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8/18/2019 -Balance Scorecard.ppt
6/19
April 2005 Raja
Balanced Score CardBalanced Score Card
alanced scorecard ena$les an ORGANISATION toalanced scorecard ena$les an ORGANISATION totrac# financial results "hile simultaneouslytrac# financial results "hile simultaneouslymonitoring progress in $uilding capa$ilities andmonitoring progress in $uilding capa$ilities and
ac1uiring intangi$le assets needed for future gro"th.ac1uiring intangi$le assets needed for future gro"th.
alanced scorecard provides managers "ithalanced scorecard provides managers "ithinstruments they need to navigate to futureinstruments they need to navigate to futurecompetitive success "hile operating in comple0competitive success "hile operating in comple0
'NI2IRON)'NT'NI2IRON)'NT
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8/18/2019 -Balance Scorecard.ppt
7/19 April 2005 Raja
Balanced Score CardBalanced Score Card
alanced scorecard is the result of collusion $et"eenalanced scorecard is the result of collusion $et"eenthe urge to $uild long range competitive capa$ilitiesthe urge to $uild long range competitive capa$ilitiesand historical financial accounting model.and historical financial accounting model.
3istorical accounting model tells the story of the past3istorical accounting model tells the story of the pastevents. It "as relevant for industrial age in "hichevents. It "as relevant for industrial age in "hichinvestment in long term capa$ilities and customerinvestment in long term capa$ilities and customer
relationship "as not critical for success.relationship "as not critical for success.
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8/18/2019 -Balance Scorecard.ppt
8/19 April 2005 Raja
Balanced scorecard helpsBalanced scorecard helps
executives measure how theirexecutives measure how their
unitsunits
Create value for current and future customers.Create value for current and future customers.
)ust enhance internal capa$ilities.)ust enhance internal capa$ilities.
'nhance investments in people, process and systems'nhance investments in people, process and systems
to improve future &'R(OR)AC'.to improve future &'R(OR)AC'.
uild future value drivers "hile retaining financialuild future value drivers "hile retaining financialperspective.perspective.
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8/18/2019 -Balance Scorecard.ppt
9/19 April 2005 Raja
Balanced ScorecardBalanced Scorecard
(inancial perspective.(inancial perspective.
alanced scorecard retains financial perspectivealanced scorecard retains financial perspective$y using financial measures to evaluate economic$y using financial measures to evaluate economic
conse1uences of actions already ta#en.conse1uences of actions already ta#en.
It ta#es into account the economic value addedIt ta#es into account the economic value addedand evaluates efficacy of $usiness strategy.and evaluates efficacy of $usiness strategy.
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8/18/2019 -Balance Scorecard.ppt
10/19 April 2005 Raja
BALANCE SC!"ECA" F"A#E$!"% !"ANSLAE S"AE'( IN! !)E"AI!NAL
E"#SFINANCIAL
TO SUCCEED FINANCIALLY
HOW SHOULD WE APPEAR TO
OUR SHAREHOLDERS
CUSTOMERS
TO ACHIEVE OUR VISION,
HOW SHOULD WE APPEAR
TO OUR CUSTOMERS
INTERNAL BUSINESS
PROCESS
TO SATISFY OUR CUSTOMERS
AND SHAREHOLDERS
PROCESSES WE MUST EXCEL AT
*ISI!N &S"AE'
(
LEARNING AND
GROWTH
TO ACHIEVE OUR VISION,
HOW SHOULD WE SUSTAIN
OUR ABILITY TO IMPROVE AND CHANGE
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8/18/2019 -Balance Scorecard.ppt
11/19 April 2005 Raja
+alanced scorecard goes *eyond the standard+alanced scorecard goes *eyond the standardmeasures) such as customer satisfaction)measures) such as customer satisfaction)
customer retention) customer ac!uisition) mar(etcustomer retention) customer ac!uisition) mar(et
share etc. It specifically loo(s at the valueshare etc. It specifically loo(s at the valueproposition that the $R,A-I#ATI$- 'ill deliverproposition that the $R,A-I#ATI$- 'ill deliverto the customer in target mar(et segment.to the customer in target mar(et segment.
It articulates customer and mar(et *ased
strategy) that 'ill deliver superior) value to thecustomer) *uild customer loyalty and *ringsuperior I-ACIA/ returns.
Customer perspectiveCustomer perspective
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8/18/2019 -Balance Scorecard.ppt
12/19 April 2005 Raja
Learning and 'rowthLearning and 'rowth
)erspective)erspective
alanced scorecard identifies the infrastructure analanced scorecard identifies the infrastructure anORGANISATION must $uild to create long term gro"thORGANISATION must $uild to create long term gro"thand improvement.and improvement.
The other three perspectives "ill reveal the gapsThe other three perspectives "ill reveal the gaps$et"een e0isting capa$ilities of people, systems and$et"een e0isting capa$ilities of people, systems andprocedures and "hat is needed to achieveprocedures and "hat is needed to achieve$rea#through performance.$rea#through performance.
This perspective of $alanced scorecard identifiesThis perspective of $alanced scorecard identifiesintervention areas for long term gro"th andintervention areas for long term gro"th andimprovement.improvement.
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8/18/2019 -Balance Scorecard.ppt
13/19 April 2005 Raja
Internal )rocessInternal )rocess
)erspective)erspectivealanced scorecard IN*'NTI(I'S critical internalalanced scorecard IN*'NTI(I'S critical internal
processes in "hich the ORGANISATION must e0cel.processes in "hich the ORGANISATION must e0cel.
Traditional approach in this field monitors e0istingTraditional approach in this field monitors e0istingprocesses and $rings improvements in them.processes and $rings improvements in them.alanced scorecard usually identifies critically ne"alanced scorecard usually identifies critically ne"processes at "hich the ORGANISATION must e0cel.processes at "hich the ORGANISATION must e0cel.
)ore specifically, $alanced scorecard tries to)ore specifically, $alanced scorecard tries toincorporate innovation processes into internalincorporate innovation processes into internalprocesses, as innovation is a po"erful driver forprocesses, as innovation is a po"erful driver forfuture financial &'R(OR)AC'.future financial &'R(OR)AC'.
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8/18/2019 -Balance Scorecard.ppt
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8/18/2019 -Balance Scorecard.ppt
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FINANCIAL PERSPECTIVE
CUSTOMER
PERSPECTIVE
INTERNAL PROCESS
PERSPECTIVE
LEARNING AND
GROWTH
PERSPECTIVE
BALANCESC!"ECA"
GOALS MEASURES
GOALS MEASURES
GOALS MEASURES
GOALS MEASURES
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8/18/2019 -Balance Scorecard.ppt
16/19 April 2005 Raja
Balanced ScorecardBalanced Scorecard
GoalsGoals
SurviveSurvive
SucceedSucceed
&rosper &rosper
)easures)easures
Cash flo"Cash flo" Sales gro"thSales gro"th
Gro"th in operationalGro"th in operational
incomeincome
ROIROI
'2A'2A
FINANCIAL PERSPECTIVE
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8/18/2019 -Balance Scorecard.ppt
17/19 April 2005 Raja
GOALS
RESPONSIVE SUPPLY
PREFERRED
SUPPLIER STATUS
NEW PRODUCT
LAUNCH
CUSTOMER
RELATIONSHIP
MEASURES
ON TIME DELIVERY
SHARE OF KEY
CUSTOMERS’ PURCHASES
PERCENTAGE SALE FROM
NEW PRODUCES
CUSTOMER PARTNERSHIP
VENTURES
CUSTOMER PERSPECTIVE
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8/18/2019 -Balance Scorecard.ppt
18/19 April 2005 Raja
GOALS
TECHNOLOGY
UPGRADATION
NEW PRODUCT
DEVELOPMENT
MANUFACTURING
EXCELLENCE
MEASURES
TECHNOLOGICAL
INVESTMENTS
R&D EXPENDITURE
COMMERCIALIZATION OF
R&D
CYCLE-TIME REDUCTION
IMPROVEMENT IN
THROUGHPUT
INTERNAL BUSINESS PERSPECTIVE
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8/18/2019 -Balance Scorecard.ppt
19/19April 2005 Raja
GOALS
TECHNOLOGICALLEADERSHIP
MANUFACTURING
IMPROVEMENT
TIME TO MARKET
MEASURES
INTERNAL TECHNOLOGYDEVELOPMENT
WASTE REDUCTION
CONSTRAINT REMOVAL
PROCESS IMPROVEMENT
INNOVATION AND LEARNING PERSPECTIVE