Balance Scorecard Flashcards
What is a balance scorecard?
Balance scorecard is a strategic, planning and management system that organisations use to communicate what they are trying to accomplish, align the day to day work that everyone is doing with strategy, prioritise projects, products and services and measure and monitor progress towards strategic targets.
What does balance scorecard look at?
The systems connect the Dots between the big picture strategy elements such as mission (their purpose), vision (what they aspire), core values (what they believe in) and strategic focus areas (Themes, results and or goals)
It also look at organisational elements like objectives, KPIs, targets and iniatives
The 4 perspectives of BSC
Financial
Customer
Internal process
Learning and growth
4 perspectives - financial
Financial views the organisations financial performance and use of financial resources. Using the BSC of the strategy was to improve customer profitability, a KPI will help identify how it can be achieved. The program and budget will enable a business to target this.
4 Perspectives - Customer
The customer perspective is about the value proposition that You give to your customers.
From this you can target the market segment that you want to address and maximise your strategies.
4 perspectives- internal process
The internal perspective looks at stability and the operation of the business. This can be used to make sure customer expectations are being met
4 perspectives- Learning and growth
The learning and growth perspective consists of training and improvement for your workforce. This is underlined as the starting block for which pioneers the business.
Example of BSC for example Financial Perspective
Financial perspective example:
Strategic objectives: increase company profitability
KPIs: % net profit margin
£ net cash flow
Target: 3 intervals current, interval so m or q and next
Then iniatives so the programs and budgets
Example of BSC - Customer
Strategic objective: maintain high levels of customer satisfaction Increase customer profitability KPIs: %survey excellent score £ rev per client £ av new customer acquiring costs % market share
Target - current / interval / target
Iniatives: programs: being customer reward projects
Project to train employees on customer rewards
Budget - £5mil iniatives
Employee add ons to money
4 perspectives of BSC - Internal Process
Strategic objectives - Incrase call handing expertise
Improve service delivery
KPIs: av call handing targets
%achieved projects running on time
%process optimised
Target: current interval next
Programs: Iniatives: training for cal handlers
Review the service Delivery time
Budget - monetary gains for meeting targets
4 perspectives of BSC example - Learning
Strategic objectives: build a culture that encourages innovation
KPIs %employee engagement rates
Ideas received for new ideas
Customer satisfaction
Training hours
Targets: current interval next
Iniatives: programs - ask for and reward employee ideas that improve performance
Determine bonus structure
Budgets - monetary gains
Promotion
Concluding BSC -
BSC looks at the strategic objectives that create continuous improvements that must be implemented to achieve the strategy
Concluding BSC - Strategy map explained
In theory the BSC creates a strategy map that can be used to visualise and communicate how value is created by the organisation.
A strategy map shows a logical cause and effect connection between strategic objectives.
Strategy map example (ending part of conclusion)
Learning health - improve knowledge and skills > improve tools and technology
Leads to
Internal process - increase process efficiencies > lower cycle time
Leads to:
Internal process - Lowe wait time > improve customer retention
Leads to lower cost > increase revenue = increase profitability
