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SCORECARD AND
KPIS 101Based on
www.bscdesigner.com/scorecard-and-kpis-101.htm
By Aleksey Savkin, bscdesigner.com
BSC
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#%& A'' !#D!(A&%$S A$)*!S
• !t doesn+t make sense to callsomething )*! ntil a bsinesscontet is dened.
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#%& A'' !#D!(A&%$S A$)*!S
• !t doesn+t make sense to callsomething )*! ntil a bsinesscontet is dened.
• Bt !+ll be sing the )*! term as it ismore poplaried.
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#%& A'' !#D!(A&%$S A$)*!S
• !t doesn+t make sense to callsomething )*! ntil a bsinesscontet is dened.
• Bt !+ll be sing the )*! term as it ismore poplaried.
• &hese aspects were discssedbe2ore3 in the gide 2rom4antication to a metric
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56A& *$%B'7S A$ )*!S A#D AS(%$(A$D S8**%SD &% S%'9:
• !ndicators are nmerical vales that
are linked to some kind o2 process.
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56A& *$%B'7S A$ )*!S A#D AS(%$(A$D S8**%SD &% S%'9:
• !ndicators are nmerical vales that
are linked to some kind o2 process.• &heir primary goal is to show a
nmber that can give s an idea
abot the crrent per2ormance.
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56A& *$%B'7S A$ )*!S A#D AS(%$(A$D S8**%SD &% S%'9:
%# !#D!(A&%$ '9'<
• Show the crrent vale.
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56A& *$%B'7S A$ )*!S A#D AS(%$(A$D S8**%SD &% S%'9:
%# !#D!(A&%$ '9'<
• Show the crrent vale.• !ntrodce the per2ormance 2nction
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56A& *$%B'7S A$ )*!S A#D AS(%$(A$D S8**%SD &% S%'9:
%# !#D!(A&%$ '9'<
• Show the crrent vale.• !ntrodce the per2ormance 2nction
• !nterpret the vale o2 an indicator on
a baseline/target scale.
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56A& *$%B'7S A$ )*!S A#D AS(%$(A$D S8**%SD &% S%'9:
%# S(%$(A$D '9'<
• "rop indicators into categories.
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56A& *$%B'7S A$ )*!S A#D AS(%$(A$D S8**%SD &% S%'9:
%# S(%$(A$D '9'<
• "rop indicators into categories.• Speci2y the relevant importance.
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56A& *$%B'7S A$ )*!S A#D AS(%$(A$D S8**%SD &% S%'9:
%# S(%$(A$D '9'<
• "rop indicators into categories.• Speci2y the relevant importance.
• (alclate the per2ormance o2
category.
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56A& *$%B'7S A$ )*!S A#D AS(%$(A$D S8**%SD &% S%'9:
%# S(%$(A$D '9'<
• "rop indicators into categories.• Speci2y the relevant importance.
• (alclate the per2ormance o2
category.• (alclate the total per2ormance.
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!#D!(A&%$ '9'
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&6 9A'8 %= A#!#D!(A&%$
>?0 @
0 hors/week
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&6 9A'8 %= A#!#D!(A&%$
>?0 @
0 hors/week
#meric vale
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&6 9A'8 %= A#!#D!(A&%$
>?0 @
0 hors/week
#meric vale 7easre nit
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&6 $%' %= &6 *$=%$7A#(
=8#(&!%#
•
5hat the vale >?0@ means:
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&6 $%' %= &6 *$=%$7A#(
=8#(&!%#
•
5hat the vale >?0@ means:
• !s it a high or low:
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&6 $%' %= &6 *$=%$7A#(
=8#(&!%#
•
5e need a measrement scale
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5e need a measrement scale
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5e need a measrement scale
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9A'8
&!7
5e need a measrement scale
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9A'8
&!7
7a7a C means the maimalpossible vale o2 an indicator
5e need a measrement scale
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9A'8
&!7
7a7a C means the maimalpossible vale o2 an indicator
7in7in C means the minimal possiblevale o2 an indicator
5e need a measrement scale
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9A'8
&!7
7a
7in
5e need a measrement scale
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&6 *$=%$7A#( %= A#!#D!(A&%$ (A# B (A'(8'A&D AS
*er2ormance 9aleE, F G 100F
9ale C 7inE
7a C 7inE
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!n or eample<
9ale G >?0
7in G 0
7a G H00
&6 *$=%$7A#( %= A#!#D!(A&%$ (A# B (A'(8'A&D AS
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&6 *$=%$7A#( %= A#!#D!(A&%$ (A# B (A'(8'A&D AS
*er2ormance 9aleE, F G 100F
G IIF
>?0C 0E
H00 C 0E
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&he per2ormance 2nction o2 )*!
Sorce<
www.bscdesigner.com
*er2ormance 9aleE, F G 9aleC 7inE / 7a C 7inEE J 100F
5ith a linear growth o2 thevale the per2ormance will alsogrow linearly
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&6 *$=%$7A#( =8#(&!%# !S#%& A'5AKS '!#A$
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&6 *$=%$7A#( =8#(&!%# !S#%& A'5AKS '!#A$
•
=or eample, the per2ormance mightgrow very slowly in the beginning, btthen increase rapidly
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&he per2ormance 2nction o2 )*!
Sorce<
www.bscdesigner.com
*er2ormance 9aleE, F G*ower9ale,10E / *ower7a, 10E
&he per2ormance might grow very slowly inthe beginning, bt then increase rapidly.
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*er2ormance 9aleE, F G 100F
*ower 9ale,10E
*ower 7a,10E
&6 *$=%$7A#(
=8#(&!%# !S #%& A'5AKS'!#A$
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5!&6 &6 !#($AS %= &6
9A'8 &6 *$=%$7A#(7!"6& B D($AS!#"
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5!&6 &6 !#($AS %= &6
9A'8 &6 *$=%$7A#(7!"6& B D($AS!#"
• =or eample, the more waiting timethere is in the spport center, the lower is its per2ormance.
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&h 2 2 ti 2 )*!
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&he per2ormance 2nction o2 )*!
Sorce<
www.bscdesigner.com
*er2ormance 9aleE, F G 7a C9aleE / 7a C 7inEE J 100F
5ith the increase o2 the vale theper2ormance might be decreasing as well.
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*er2ormance 9aleE, F G 100F
7a C 9aleE
7a C 7inE
5!&6 &6 !#($AS %= &6
9A'8 &6 *$=%$7A#(7!"6& B D($AS!#"
BSC
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(A'(8'A&!#" &6 *$%"$SS
• Sometimes it is necessary to 2ocsattention on a very specic part o2the per2ormance interval.
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9A'8
&!7
7a
7in
(A'(8'A&!#" &6 *$%"$SS
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9A'8
&!7
7a
7in
(A'(8'A&!#" &6 *$%"$SS
*lanning horion
6istorical
valesBSC
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9A'8
&!7
7a
7in
(A'(8'A&!#" &6 *$%"$SS
*lanning horion
6istorical
vales
Baseline
&arget
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9A'8
&!7
7a
7in
(A'(8'A&!#" &6 *$%"$SS
*lanning horion
6istorical
vales
Baseline
&arget
7in and 7a aresed to calclate the
per2ormance o2 the )*!.
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9A'8
&!7
7a
7in
(A'(8'A&!#" &6 *$%"$SS
*lanning horion
6istorical
vales
Baseline
&arget
7in and 7a aresed to calclate the
per2ormance o2 the )*!.
&he per2ormance answers the 4estion<5hat is the overall
per2ormance o2 the)*!:
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9A'8
&!7
7a
7in
(A'(8'A&!#" &6 *$%"$SS
*lanning horion
6istorical
vales
Baseline
&arget
Baseline and &argetare sed to calclatethe progress.
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9A'8
&!7
7a
7in
(A'(8'A&!#" &6 *$%"$SS
*lanning horion
6istorical
vales
Baseline
&arget
Baseline and &argetare sed to calclatethe progress.
&he progress answersthe 4estion< &o what
etent was the targetachieved:
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&6!S 7!"6& S%8#D A '!&&' B!&(%7*'!(A&D &% D%3
• &his might sond a little bitcomplicated to do i2 yo se 7S
cel or similar so2tware
• A pro2essional scorecard so2tware,like BS( Designerwill atomate these tasks 2or yo.
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S(%$(A$D '9'
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&6 $'9A#& !7*%$&A#( %=
)*!S
A spport center has two )*!s<
– Average email response time, hors
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&6 $'9A#& !7*%$&A#( %=
)*!S
A spport center has two )*!s<
– Average email response time, hors
– =irst contact resoltion rate, F
BSC
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&6 $'9A#& !7*%$&A#( %=
)*!S
A spport center has two )*!s<
– Average email response time, hors
– =irst contact resoltion rate, F
5hat )*! is moreimportant:
BSC
% ( %
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&6 $'9A#& !7*%$&A#( %=
)*!S
• A company can make Average emailresponse time e4al to 10 mintes,
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&6 $'9A#& !7*%$&A#( %=
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&6 $'9A#& !7*%$&A#( %=
)*!S
• A company can make Average emailresponse time e4al to 10 mintes,
• Bt this will not make cstomers
happy, as the =irst contactresoltion rate will be very low.
BSC
&6 $'9A#& !7*%$&A#( %=
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&6 $'9A#& !7*%$&A#( %=
)*!S
• A company can make Average emailresponse time e4al to 10 mintes,
• Bt this will not make cstomers
happy, as the =irst contactresoltion rate will be very low.
• "ood response time is important, bt
what is more important is the high4ality o2 the answers.
&6 $'9A#& !7*%$&A#( %=
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&6 $'9A#& !7*%$&A#( %=
)*!S
• &o reLect this idea we need aconcept o2 “weight ” <
– Average email response time, hors
– =irst contact resoltion rate, F
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&6 $'9A#& !7*%$&A#( %=
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&6 $'9A#& !7*%$&A#( %=
)*!S
• &o reLect this idea we need aconcept o2 “weight ” <
– Average email response time, horsMweight G N
– =irst contact resoltion rate, FM weight
G H
BSC
&6 $'9A#& !7*%$&A#( %=
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&6 $'9A#& !7*%$&A#( %=
)*!S
• &o reLect this idea we need a concepto2 “weight ” <
– Average email response time, horsMweight G N
– =irst contact resoltion rate, FM weight GH
#ow we know that =irst contact resoltionrate is more important than Average
email response time. BSC
(A'(8'A&!#" &6 &%&A'
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(A'(8'A&!#" &6 &%&A'
*$=%$7A#(
• &he per2ormance o2 a category canbe calclated by taking in accontthe per2ormance vales o2 eachindicator and their weights.
BSC
(A'(8'A&!#" &6 &%&A'
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(A'(8'A&!#" &6 &%&A'
*$=%$7A#(
• 6ere we have the strctre o2 thescorecard (1..N C are categories.7etric-i,O are indicators together with
their weight and per2ormance vales<
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(A'(8'A&!#" &6 &%&A'
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(A'(8'A&!#" &6 &%&A'
*$=%$7A#(
• 'et+s convert this into a diPerentnotation<
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(A'(8'A&!#" &6 &%&A'
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(A'(8'A&!#" &6 &%&A'
*$=%$7A#(
• 5e had or weight on a scale 1..10,so be2ore moving ahead we need tocalclate a normalied weight<
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(A'(8'A&!#" &6 &%&A'
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(A'(8'A&!#" &6 &%&A'
*$=%$7A#(
• &he total per2ormance vale 2or the selectedcategory is be calclated as<
5here<
– #i is the nmber o2 metrics on i-levelM
– #5i,O C is a normalied weight o2 O-metric on i-levelM
– #Si,O C is a per2ormance o2 O-metric on i-level.
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(A'(8'A&!#" &6 &%&A'
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(A'(8'A&!#" &6 &%&A'
*$=%$7A#(
• &he nal 2ormla 2or the totalper2ormance inde o2 the scorecardwill be<
5here 7 is a nmber o2 categories.
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(A'(8'A&!#" &6 &%&A'
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(A'(8'A&!#" &6 &%&A'
*$=%$7A#(
• &hese calclations are simple i2 yodon+t have sbcategories in yorscorecard.
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(A'(8'A&!#" &6 &%&A'
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(A'(8'A&!#" &6 &%&A'
*$=%$7A#(
• &hese calclations are simple i2 yodon+t have sbcategories in yorscorecard.
• !2 yo had sbcategories, the weight o2 these sbcategories shold betaken into accont in a similar way.
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(A'(8'A&!#" &6 &%&A'
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(A'(8'A&!#" &6 &%&A'
*$=%$7A#(
• &hese calclations are simple i2 yo don+thave sbcategories in yor scorecard.
• !2 yo had sbcategories, the weight o2
these sbcategories shold be taken intoaccont in a similar way.
• *ro2essional scorecard so2tware like BS(Designer will atomate these calclationsso that yo can 2ocs on the bsinessside.
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(A'(8'A&!#" &6 &%&A'
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(A'(8'A&!#" &6 &%&A'
*$=%$7A#(
• *ro2essional scorecard so2tware like BS(Designer will atomate these calclationsso that yo can 2ocs on the bsiness side.
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7%$ AB%8& &6 BA'A#(D S(%$(A$D
=ind more insight2larticles abot theBalanced Scorecardin Articles section atwww.bscdesigner.com
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&6A#) K%8
=eel 2ree to send s yor 4estions sing thecontact 2orm at www.bscdesigner.com