The Balanced ScorecardBalanced Scorecard
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Ide tentang BSC diinisiasi oleh Robert S. Kaplan dan David P. Norton di Harvard Business Review tahun 1992 dalam artikel berjudul “Balanced Scorecard-Measures that Drive Performance”.
Success StoryBob McCool became head of Mobil NAM&R in 1992 when the past performance was not acceptable. Mobil launched its Balanced Scorecard project in
1994.
From 1994 to 1998. The productivity strategy created a
20-percent reduction in the cost of refining, marketing, and
delivering a gallon of gasoline.
The growth strategy, with its new value proposition for targeted segments,
produced increased customer satisfaction led to increased revenue that exceeded industry averages by
more than 2 percent per year.
Mereka melakukan penelitian dengan keyakinan bahwa pendekatan pengukuran kinerja yang ada,
terutama mengandalkan ukuran akuntansi keuangan telah menjadi usang
Research finding
Balanced Scorecard — Strategic Measures That
Drive Performance
A set of performance targets and results that show an organization’s performance in meeting its responsibilities to various
stakeholders.
EmployeeStakeholder
Group
InvestorStakeholder
Group
Balanced Scorecard
Financial Perspective
• Objectives• Key Performance Indicators• Targets• Initiatives
STRATEGY
Learning & Growth Perspective• Objectives• Key Performance Indicators• Targets• Initiatives
CustomerPerspective
• Objectives• Key Performance Indicators• Targets• Initiatives
Internal Process Perspective• Objectives• Key Performance Indicators• Targets• Initiatives
Balance Scorecard Perspectives
Kaplan and Norton, 1996
• What is Financial Strategy? [to satisfy shareholders]
Productivity strategy Improve cost structure/yields Increase asset utilization
Growth strategy Expand revenue opportunities Enhance customer Value
• How to reach the financial goals?
Financial Perspective
Performance Measures in Financial Perspective
• Return on investment• Economic value added• Sales growth rate by
segment• Percentage revenue
from new product, service, or customer
• Share targeted customer an account
• Cross-selling
• Cross-selling• Customer and product
line profitability• Revenue/employee• Cost reduction rate• Unit cost• Payback• Return on Capital
Employed• Working capital ratios
(cash-to-cash cycle)
• Information about market & customer
Customer selection, acquisition, retention & growth
• Who are profitable customers? — Target Segmentations
• What do they need? [same as the thing we serve them]— Customer Values Propositions (e.g. QSC&V – quality, services, cleanliness, and value)
Customer Perspective
Performance Measures in Customer Perspective
• Market Share: Reflects the proportion of business in a given market (in term of number of customer, dollar spent, or unit volume sold) that a business unit sells.
• Customer Acquisition: Measures, in absolute or relative, the rate at which a business unit attracts wins new customers or business.
• Customer Retention: Measures, in absolute or relative, the rate at which a business unit retains or maintains ongoing relationships with its customers.
• Customer Satisfaction: Assesses the satisfaction level of customers along specific performance criteria within the value proposition.
• Customer Profitability: Measures the net profit of a customer, after allowing for the unique expenses required to support customer.
Internal Process Perspective
• In order to serve customers’ need and satisfy other stakeholders, what process the organization need to be excellent.– The nature of the customer value proposition
determines the kind of internal processes
• How to build excellent process to serve customer and other stakeholders.
Internal Process Perspective
Production Management Processes Customer Management Processes Innovation Processes Regulatory & Social processes
Operations management processes
• Developing and sustaining supplier relationships
• Producing products and services
• Distributing and delivering products and services to customers
• Managing risks
Learning & Growth Perspective
• What competencies the organization need in order to obtain or sustain competitiveness?– Competencies’ Gap Analysis
• How to fill the gap between ‘what organization what to be’ and ‘its current position’– Competencies, Employee Satisfaction and Retention – Management Information System– Corporate Culture and Motivations
Learning & Growth Perspective
• Human Capital—Employees' skills, talent, and knowledge.
• Organization Capital—Culture, leadership, employee alignment, teamwork, and knowledge management
• Information Capital—Databases, information systems, network, and technology infrastructure
Performance Measures in Learning & Growth Perspective
• Employee satisfaction
• Employee retention/turnover rate
• Employee productivity
• Information system availability
• Organizational Climate Index
• Personal Goals Alignment Index
• Staff development
Key Performance Indicators
• Derived from strategy• Clearly defined/explicit purpose• Mixed performance driver and outcome measures• Optimum number of measures (from 15 to 25
measures)
• Construct Strategy Map (causal model—cause-and-effect relationships)
Characteristics of good performance indicators
• Relevant
• Accurate
• Understandable
• To measure things that can be measured within certain time.
• Comprehensive VS The main things
How to set targets• Stretch Target
– Benchmarking– Stakeholders requirement– Capacity
• Incremental Target– Comparing with baseline/last year
• Baseline Target– Natural number/Normal rate
Balance Scorecard: How is it
“balanced”?• Financial VS Non-financial measures
• Tangible VS Intangible assets
• Long-term VS Short-term Goals
• Internal VS External Perspective
• Performance Drivers VS Outcomes
• Cause-and-effect relationships
Contribution of BSC
• Provide information to management and create accountability
• Influence behaviours
• Facilitate development (learn and adapt)
• Achieve goal congruence and make a system self-correcting
• Encourage continuous improvement
How to use the Balanced Scorecard
Strategic Measurement Systems
Framework for Implementing Strategy
Strategic Management System
BSC Strategic Measurement Systems
Strategy
Key Performance Indicators
Targets
BSC Framework for Implementing Strategy
Strategy
KPIs & Targets
Initiatives & Resources
BSC Strategic Management System
BSC & KPIs
Implementation
Strategic Learning
Performance Report
Quarterly
Yearly
Strategic Initiatives & Resources
Strategy
Bagaimana Penerapan Balanced Scorecard di Berbagai Jenis
Organisasi?
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