Balanced Scorecard



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Change Vector
SQ
T
>
How to track the change?
DC...Deming Cycle
Change vector

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}To know WHAT to do is not enough
}It is important to know WHETHER and HOW we are doing
}Therefore MbC operates with system of indicators on every level of management
◦in accordance with development of company and people, the target values for indicators are
determined that enable continuous monitoring and management of improvement
}Balanced Score Card utilization
SQ
T
Change vector

}Balanced Score Card (BSC)
◦introduced in 1990’s by Robert Kaplan and David Norton
◦reaction to popular cost-cutting projects
}Cost-cutting Projects substantially improved cost-related financial indicators in fiscal year
◦and consultancy companies made well getting good profit share
}However, in next years cost-cut companies
◦have seen a huge drop in their performance
◦loose much of their ability to react to changes (stability)
◦become less vital, i.e. able to continuously succeed
}Therefore BSC
◦introduced new kinds of indicators to existing ones to connect corporate strategy with all
operational areas of within the enterprise
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Balanced Scorecard

finanční ukazatele jsou pro většinu lidí málo srozumitelné, neodráží výsledky v jednotlivých
úlohách na dostatečné úrovni podrobnosti
Robert Kaplan a David Norton poukázali, že zásadní zlepšení finančních ukazatelů firmy může být
předzvěstí problémů s konkurenceschopností a navrhli doplnění finančních ukazatelů o ukazatele
nefinanční.
Aby celý systém fungoval musí ukazatele měřit něco, co má smysl vzhledem k cílům, jichž má firma
dosáhnout. Tyto cíle musí být definovány, pak vývoj ukazatelů indikuje

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TOP management
financial indicators
revenues   ->   profit/loss       <-      costs
customer indicators
number of new customers
average size of order
new products ratio
number of loyal customers
...
internal processes indicators
average time to market
number of complaints – quality
product cost
service innovation pace
...
learning and growth indicators
competencies/resources
abilities   attitudes   qualities
all managers
Balanced Scorecard

arrows stands for causality relationships

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}Financial goals depend of the lifecycle of
◦Company
◦Unit
◦Service
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}Segmentation of customers
}
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> > > > >
market share
customer retention
acquiring new customers
customer satisfaction
customer profitability
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Customers
profitable
No profitable
Target segments
keep
move
No target segments
monitor
eliminate
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> > > > >
Attributes of product
Functionality
Quality
Price
Time
>
Value
>
Image
>
Relationships
=
+
+

}Innovation process
}Operational process
}Post-sale process
}
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}Mapping the process form customer´s order to the product / service delivery
}Traditionally related to financial indicators
◦Costs
◦Budgets and deviations
}Now related with quality monitoring and time of delivery cycle
◦Number of rejects
◦Time of delivery
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TM
FI
CI
IPI
LGI
all M
req_pos_yy.png
Balanced Scorecard

}BSC is tool primarily for managers
◦but also communication mean with leaders, owners, shareholders
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}BSC may be foundation of monitoring system
shareholders, owners, ...
Feedback
Balanced Scorecard

}Balanced Scorecard perspective
}Why to use in MbC
}Structure of Balanced Scorecard
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