София 20 май 2004 United Nations Development Program Coordination Center for Information...

София20 май 2004

United Nations Development Program

Coordination Center for Information Communication and Management Technologies

eGovernment eGovernment Strategy Balanced Strategy Balanced

ScorecardScorecardKamen Spassov


[email protected]

eGovernment Strategy BSC, София, 20 май 2004

The Management The Management SystemSystem

Vision and Strategy

Management System

FundamentalsProjects Initiatives


Elements of a Good Elements of a Good Management SystemManagement System

• Derived from the Vision and Strategy of the organization

• Planning– Long term strategic plan– Short term business plan and budgets

• Measurement– Focused set of measures– Measures represent the organization’s plan and

vision

• Review– Plans are regularly reviewed and suitably revised

• Performance – Rewards are linked to driving key measures


What isWhat is BSC?BSC?

• A concept that transforms the organization’s strategy into real actions;

• A tool to measure activities of the organization;

• A management decision making support system;

• A technology that integrates actions of all parts around the objectives of the organization

Market Share

85%


BSC PhilosophyBSC Philosophy

Mission and vision definition

Strategy development

Perspectives identification

Key success factors

Measures

Evaluation

Action plan

Feed back

1. Where are we? What are we doing? Where do we want to go?2. How will we realize our intentions?3. From which points of view can we look at our organization?4. What are the factors influencing development in the right direction?5. How will we measure our activities?6. What are the results of the monitoring?7. What will be our actions? Can we complete them?8. What are benefits of the change?How do we continue?


BSC GenesisBSC Genesis

• Situation– Bias towards Financial Measures– Initiatives not all linkable to financials, hence

• Either not undertaken• Or too many initiatives

– Top Management need to focus• The ‘Balanced Scorecard’ solution - Kaplan

& Norton– A set of measures based on

• Finance• Customers• Internal processes• Learning and growth

– Linked to vision and strategy– ‘Balances’ short and long term needs– Builds ‘leading’ and ‘lagging’ indicators


BSC ElementsBSC Elements

Finance

Learning& Growth

InternalProcesses

CustomerVision &Strategy


FinanceFinance

To succeed financially, how should we appear to our shareholders?

• Financial measures– Show economic consequences of actions already

taken– Show if strategy implementation has given results

• Typical measures:– Revenue– Gross Profit– ROI– EVA


CustomersCustomers

To achieve our vision, how should we appear to our customers?

• Measures typically can be related to:– Customer satisfaction– Customer retention– New customer acquisition– Value delivery - to customer– Market and account share in targeted segments

• Segment specific drivers could be:– Shorter lead times– Innovative products and services– Better quality


Internal ProcessesInternal Processes

To satisfy our shareholders and customers, what business processes must we excel at?

• Define key business processes– Business process analysis– Business process reengineering

• Typical measures:– Time to complete a service– Decrease of the total cost of the process


Learning and Learning and GrowthGrowth

To achieve our vision, how will we sustain our ability to change and improve?

• Employees skills and competences– Current– Needed for the future

• Typical measures:– Self Assessment– Certification


Cause/Effect Cause/Effect RelationshipRelationship

EVA

CustomerLoyalty

On-timedelivery

ProcessQuality

ProcessCycle time

EmployeeSkills

Finance

Customer

Internal Processes

Learning and Growth


Customer recommendation

s

Service helpfulness

Merchandise value

Customer

retention

DRIVES DRIVES5 unit increase in 1.3 unit increase in 0.5% increase inemployee attitude customer impression revenue growth

Attitude about the

job

Attitude about the company

A COMPELLING PLACE TO INVEST

A COMPELLING PLACE TO WORK

A COMPELLING PLACE TO SHOP

Employee

retention

Return on assets

Operating margin

Revenue growth

Customer impression

s

Employee behaviour

The rectangles represent survey information, the ovals hard data

Sears Employee-Sears Employee-Customer-Profit ChainCustomer-Profit Chain


Hypothetical ModelHypothetical Model

• Job satisfaction• Commitment• Service climate• Training• Resources• Culture• Line mgmt

Customer Attitudes

Business Performanc

e

Employee Attitudes

• Satisfaction• Loyalty• Recommendati

on• Spending

intention• Retention

• Sales volume growth

• Profitability• Added value

per head• Return on

capital• Productivity


Elements to Measure Elements to Measure RelationshipsRelationships

BSC Element Strategic Areas Strategic Element MeasuresFinance Shareholder Value EVA EVA

Profitability Gross Contribn / Person monthCustomer Customer Loyalty Retention Repeat Order Value / Total Value

Satisfaction Customer Project RatingOn-time delivery On-time delivery % delay in project milestones

Internal Processes Process Quality Bugs Bugs / Line of codeProcess Cycle time CMM Score CMM Score

Estimation Function Pt Plan vs ActualUtilisation % Idle time

Learning and Growth Employee Skills Skill Matrix % skills available vs project estimateSkill matrix score

Recruitment % profile parameters met% leaving within six months

Retention Average org age


Why ‘Balanced?’Why ‘Balanced?’

• A focus only on financial measures is backward looking and restrictive

• Companies have several key stakeholders - not just shareholders, but customers and employees

• Measures should look to the future as

well as the past and the present


Kaplan & Norton Kaplan & Norton OriginalOriginal

Obj

ectiv

esM

easu

rers

Tang

les

Initi

ativ

es

“To satisfy our shareholders and customers, what business processes must we excel at?”

Internal Business Process

Obj

ectiv

esM

easu

rers

Tang

les

Initi

ativ

es

“

Learning and Growth

Obj

ectiv

esM

easu

rers

Tang

les

Initi

ativ

es

“To achieve our vision, how should we appear to our customers?”

Customer

Obj

ectiv

esM

easu

rers

Tang

les

Initi

ativ

es

“To succeed financially, how should we appear to our shareholders?”

Financial

Vision and

Strategy


BSC UseBSC Use

• Translating strategy into operational terms

• Communicating strategy and targets• Monitoring direction and progress• Reporting to stakeholders• Changing behaviour• Enabling double loop learning


Possible LimitationsPossible Limitations

• Does it have to be 4 quadrants? Don’t be constrained by the format!

• Are employees adequately represented? Learning, growth, positive and forward-looking concepts, but what about commitment, attitudes, motivation?

• Designed primarily for the private sector


Public Sector Public Sector Differences - 1Differences - 1

• Focus on cash limit rather than profit• Funded by taxation and/or charges

that are centrally fixed• No shareholders• Regional or national focus rather than

global


Public Sector Public Sector Differences - 2Differences - 2

• Political influence• Requirement to respond to ‘central’

initiatives • Stakeholders are different or have a

different emphasis• Concept of accountability• Ethos of public service


Public Sector Public Sector StakeholdersStakeholders

• Customers of services• Employees• Taxpayers• Voters• Wider public• The Government


Public Sector Public Sector TensionsTensions

• Cost versus quality• Freedom versus regulation• Spending constraints versus public

demand• Organisational wishes versus political

direction


BarriersBarriers

• Understanding the rules • Data collection issues • Organisational politics• Time• Expertise


Strategy DescriptionStrategy Description

• Strategic Map

• Perspectives

• Objectives of the organization


Performance Performance Measures Measures


InitiativesInitiatives

What do we need to do to realize the objectives?


General ViewGeneral View


Linking All Parts of Linking All Parts of the Organizationthe Organization


The LinkThe Link

http://obs.is-bg.net

Username: publicPassword: welcome


The Entry PointThe Entry Point


Strategic Strategic ManagementManagement

Management information systemManagement information systemfor e-government monitoring andfor e-government monitoring andstrategic management based onstrategic management based onthe Balanced Scorecard methodologythe Balanced Scorecard methodology


Strategic Map ModelStrategic Map Model


Bulgarian Bulgarian eGovernmenteGovernment

% of basic public services for Citizens and% of basic public services for Citizens andBusinesses, available onlineBusinesses, available online

2003 – Actual2003 – ActualCitizens – 47.17 %Citizens – 47.17 %Businesses – 34.32 %Businesses – 34.32 %

2004 – Planned2004 – PlannedCitizens – 68.03 %Citizens – 68.03 %Businesses – 77.83 %Businesses – 77.83 %

2005 – Planned2005 – PlannedCitizens – 100 %Citizens – 100 %Businesses – 100 %Businesses – 100 %


Up-to-Date Up-to-Date AchievementsAchievements

Best scores and maximum result for:Best scores and maximum result for:

• Job search services Job search services by labour officesby labour offices – 100 % – 100 %

• Declaration to theDeclaration to thepolice – 100 %police – 100 %

• Public libraries – 100 %Public libraries – 100 %

• Social securitySocial securitycontributions – 75 %contributions – 75 %


Functional Functional AdvantagesAdvantages

• Several view-points• User-friendly, web-based interface• Cause-and-effect relationship• Quantitative measurement by key performance indicators• Multidimensional analyses• Qualitative assessment• Feedback and communication


Information System Information System DesignDesign

BSC BSC StrategicStrategicProcessProcess

eGov MISeGov MISConceptualConceptual

modelmodel

DataDataCollectionCollectionProcessProcess


Technological Technological BackgroundBackground

• OLAP cube for each measure provides OLAP cube for each measure provides analyses across different dimensionsanalyses across different dimensions

ManagerLoader

Input Dimension Fields in

Master Tables

Populate tables

ArchitectMetadata

Create TablesMaster TablesFields in Dimensions

Input TablesReal & Plan data

Base TablesReal & Plan data

System TablesReal & Plan data

София20 май 2004

United Nations Development Program


Thank You!Thank You!

Kamen SpassovCoordination Center

for Information Communication and Management [email protected]

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