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BALANCED SCORECARD

BY:

SAMPADA HARSHE

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INTRODUCTION

The technique was developed by Prof. Robert

Kaplan & David Norton.

Balanced score card approach provides a clear

prescription as to what companies should

measure in order to balance the financial

perspective.

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INCREASING IMPORTANCE OF

INTANGIBLES

TANGIBLE

INTANGIBLE

SERVICE

QUALITY

CUSTOMER

CONFIDENCE

CUSTOMER

RETENTION

REVENUE

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CONCEPT OF BALANCED SCORECARD

A way of Measuring organizational, business

unit or department success

A way of Balancing long term and short term

actions

A way of Balancing different measures of

success such as: Financial, Customer, Internal

Operations & Human Resource System &

Development.

A way of tying strategy to measures to action.

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MISSION Why we Exist?

VALUES What is important to us?

VISION

What we want to be ?

STRATEGY Our Game Plan

STRATEGIC INITIATIVE

What are the priorities

TOTAL QUALITY MANAGEMENT What we must improve?

EMPOWERMENT/PERSONAL OBJECTIVES What I need to do?

STRATEGIC OUTCOME

SATISFIED

SHAREHOLDER

DELIGHTED

CUSTOMER

EFFICIENT &

EFFECTIVEPROCESS

MOTIVATED &

PREPAREDWORKFORCE

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STRUCTURE OF BALANCED SCORECARD

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FINANCIAL PERSPECTIVE

GOALS

Survive

Succeed

Prosper

MEASURES

Cash Flow

Quarterly sales growth &

operating income by division

Increase market share & Return on

equity

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CUSTOMER PERSPECTIVE

GOALS

New Products

Responsive Supply

Preferred Supplier

Customer

Partnership

MEASURES

Percent of sales from the new

product

On-time delivery as defined by

customers

Share of key accounts purchase

Number of co-operative

engineering efforts

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INTERNAL BUSINESS PERSPECTIVE

GOALS

Technology

Capability

Manufacturing

Excellence

Design Productivity

New Product

Introduction

MEASURES

Manufacturing Geometry V/S

Competition

Cycle Time, Unit Cost & Yield

Silicon efficiency & engineering

efficiency

Actual introduction schedule V/S

plan

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LEARNING & GROWTH PERSPECTIVE

GOALS

Technology

Leadership

Manufacturing

Learning

Product Focus

Time to market

MEASURES

Time to develop next generation

Process time to maturity

Percent of products that equal

80% of sales

New product introduction V/Scompetition

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KEY VALUE DRIVERS

a) Environmental drivers

b) Organizational drivers

c) Group or departmental drivers

d) Individual drivers

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BENEFITS OF BALANCED SCORECARD

Alignment of strategy with key performanceobjectives at all levels of the organization

Measuring and managing business

performance effectively

Strategic feedback

Maximizing the overall IT investment Double-loop feedback

Outcome Metrics

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CONCLUSION

Balanced scorecard attempt to

address a key management issue:

companies often fail to turn strategyin to action

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THANK YOU