1
<Insert Picture Here>
Balanced Scorecard Implementation at UniCredit Tiriac Bank
Jann Tadorian Contact:
Managing Partner e-mail: [email protected]
Inplenion Business Consulting International mobile: +41763915015
3
<Insert Picture Here>
Agenda
• What is the Balanced Scorecard ?
• How to implement a Balanced Scorecard Project?
• Unicredit Tiriac Bank Example
• Overview Oracle Strategy and Scorecard Solution
• Q&A
4
<Insert Picture Here>
Agenda
• What is the Balanced Scorecard ?
• How to implement a Balanced Scorecard Project?
• Unicredit Tiriac Bank Example
• Overview Oracle Strategy and Scorecard Solution
• Q&A
5
A Report ?
A Fashion ?
A KPI
System
? It’s a
Management System !
What is the Balanced Scorecard ?
6
• Do you have a clear formulated mission, vision and strategy in your company ?
• Are the BU strategies aligned with the company strategy ?
• Is there a discussion on strategy implementation within your management meetings? How much time do you spend on it ?
• Are your personal goals (MBO) aligned with the company strategy ?
• ...are the projects clearly approved and prioritized according to their strategy contribution ?
• Are you sure that your management reporting reflects the status of your key success factors or the strategy implementation ?
Honestly…
7
Company Challenges : Strategy Execution
The Vision Barrier
Only 5% of the work force understands the strategy
The People Barrier
Only 25% of managers have incentives linked to strategy
The Management Barrier
85% of executive teams spend less than one hour per month
discussing strategy
The Resource Barrier
60 % of organizations don’t link budgets to the strategy
9 of 10 companies fail
to execute strategy
Today’s management Systems Were Designed to Meet the Needs of Stable Industrial Organizations That Were Changing Incrementally
You Can’t Manage Strategy With a System Designed for Tactics
8
= + + + + Objectives Competencies Actions Resources Motivation Information + Intendent
Change
= Confusion + + + + Objectives Competencies Actions Resources Motivation Information +
= Anxiety + + + + Objectives Competencies Actions Resources Motivation Information +
= Frustration + + + + Objectives Competencies Actions Resources Motivation Information +
= Chaos + + + + Objectives Competencies Actions Resources Motivation Information +
+ + + + Objectives Competencies Actions Resources Motivation Information + = Little Change
+ + + + Objectives Competencies Actions Resources Motivation Information + = unsuccessful
Implementation
What is needed for a successful Strategy Execution?
9
Vision/ Strategy
Finanzielle Perspektive Finanzielle Perspektive
“Was leisten wir für unsere Kapitalgeber, um den
finanziellen Erfolg zu erhöhen?
“Was leisten wir für unsere Kapitalgeber, um den
finanziellen Erfolg zu erhöhen?
Finanzielle Perspektive Financial
“Was leisten wir für unsere Kapitalgeber, um den
finanziellen Erfolg zu erhöhen?
“If we succeed, how will we
look to our Shareholders ?“
Struktur - und Prozessperspektive
Struktur - und Prozessperspektive
optimiert werden, um
zufrieden zu stellen?”
optimiert werden, um
zufrieden zu stellen?”
Struktur - und Prozessperspektive
Processes
optimiert werden, um
zufrieden zu stellen?”
“To satisfy our customers,
at which processes
must we excel ?“
Mitarbeiter/Lern - und Entwicklungsperspektive Mitarbeiter/Lern - und
Entwicklungsperspektive
“Wie können wir durch Innovation und Lernen
unseren Beitrag zur Wert - schöpfung verbessern?"
“Wie können wir durch Innovation und Lernen
unseren Beitrag zur Wert - schöpfung verbessern?"
Mitarbeiter/Lern - und Entwicklungsperspektive
Learning & Growth
“Wie können wir durch Innovation und Lernen
unseren Beitrag zur Wert - schöpfung verbessern?"
“To achieve process excellence
how must our organization
learn and improve ?“
Kundenperspektive Kundenperspektive
wir für unsere Kunden
zu verwirklichen?"
wir für unsere Kunden
zu verwirklichen?"
Kundenperspektive Customer / Market
wir für unsere Kunden
zu verwirklichen?"
“To achieve our vision, how
must we look to our
customers ?“
Increased Clarity
Better Committment Implementation is
controllable
Better Balance
The Balanced Scorecard!
10
The Balanced Scorecard Story!
Source: Kaplan/Norton 2009
11
Source: Study “100 x BSC”, Horváth & Partners
Support of a successful Strategy Implementation
Put in place of a common Strategy Understanding
Better Communication of the Strategy
Improvement of the Organization Learning
Enhancement in « Cause & Effect Relations » Thinking
Better Objective Accountability
Very important
Relatively important
Little importance
Not important
20%
43%
61%
43%
59%
69%
42%
35%
24%
43%
33%
24%
28%
18%
13%
10%
6%
6%
10%
4%
2%
4%
2%
1%
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
The Reasons for BSC implementation?
12
<Insert Picture Here>
Agenda
• What is the Balanced Scorecard ?
• How to implement a Balanced Scorecard Project?
• Unicredit Tiriac Bank Example
• Overview Oracle Strategy and Scorecard Solution
• Q&A
13
BSC
Change Management (F)
Project Management (A)
BSC
Model
(C)
Business Content Information Technology
SW
Solution
(D)
Data
Management
(E)
The Balanced Scorecard House
Strategic
Foundation
(B)
14
• Project Initialisation
Clarify Starting Point
Buy in Top Management
Clarify Objectives
• Project Execution
Project Plan
Project Organisation
Project Documentation
Steering Commitee
Sponsor
(CFO)
Projectsteering
Work Group
(Content)
Work Group
(Technical)
Core Team
Project Organisation
Jan
Project Plan
AprMarFeb Mai
2 3 4 5
Modul A
Modul B
Modul D/E
Modul C
Modul E
ProjectManagement
ChangeManagement
StrategicFoundation
BSCArchitecture
SW/DataManagement
6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21Woche
Projektstart
Workshop1
Workshop2
Workshop 2: (11.2.03, 1/2 Tag)
•Ausarbeitung strategische Ziele•Entwicklung Ursache-/
Wirkungsbeziehung
Teilnehmer:
Core team/alle
Kick Off
Workshops
Meeting Steering Comitee
Kick Off: 13.1.03, (1/4 Tag)
•Klärung Ausgangslage•Klärung Zielsetzung
Teilnehmer:
alle
Sitzung 1: (18.2,1/4 Tag)
•Verabschiedung Ziele u.•Ursache-/Wirkungsbeziehungen
Workshop 3: (26.2.03, 1 Tag)
•Definition Messgrössen•Definition Aktionen
Teilnehmer:Core team/alle
Sitzung 2: (11.3,1/4 Tag)
•Verabschiedung Messgrössen u.•Aktionen
Workshop 4: (18.3.03, 1/2 Tag)•Definition Zielwerte u.
•Verantwortlichkeiten
Teilnehmer:alle
Workshop3
Sitzung 3: (20.3,1/2 Tag)•Verabschiedung Zielwerte u.•Verantwortlichkeiten u.
•BSC Konzept
Workshop3
Workshop 1: (4.2.03, 1/2 Tag)
•Klärung und ErläuterungLeitbild
•Stakeholderanalyse
Teilnehmeralle
Project Management (Module A)
15
Vision - Strategy - Check
Strategy:
Strategic Priorities
Common Strategy Understanding
External View
Internal View
Opportunities
Threats
Strengths
Weaknesses
SWOT
Actual/ Future
Markets/Products
Gaps Deficits
Competitors
Vision
Strategic Foundation (Module B)
16
• Strategic Objectives
• Cause and Effect Chain
(Strategy MAP)
• KPI‘s
• Owners
• Targets
• Initiatives
Sustainable Growth Operational Excellence
Increase Revenue
Financial
Customer
Processes
Potential
Acquire New
Customers
Improve Employee
Competencies and
Motivation
Develop further the
Customer Focussed
Attitude
Enhance Accessibility of
Relevant Customer
Information
Improve
Profitability
Improve Asset
Utilization
Strategy Map Shop
Offer an Optimal Customer
Value Proposition
Improve Customer
Profitability
Retain Existing
Customers
A Class Supplier
Quality of Product
Presentation
Improve Cost
Structure
Optimize Product
Availability
Optimize Supply
Management
Enhance Advertising
Effectivity
Balanced Scorecard
Balanced Scorecard
Strategic Objectives KPI‘s Targets2003
Initiatives
Improve Profitability
Improve
Cost structure
Force
Growth
EBITDA
% Gesamtkosten vom Umsatz
% Vertriebs- und Verwaltungskosten
Gesamtumsatz
Improve
Capital Expenditures
Acquisition New Customers
Bind Customers
Optimal Value Proposition
Focus on
A Classe Supplier
Improve Product
Presentation
Use new Medias
Improve employee Motivation
and Competencies
Anzahl Neukunden
Churn Rate
CSI
% Anteil der Produkte von A Klasse
Lieferanten
Produkt-Visualisierungsindex
Bestellvorgänge über Internet
Austritte von Key Employees
Mitarbeiterbefragungswerte
18%
80 %
7 %
900 Millionen Euro
12%
+ 5 %
2%
80 Indexpunkte
80 %
85 Indexpunkte
+ 125 %
3%
85 % Indexwerte
Shop UP- Projekt
Einführung eines Lieferanten-
bewertungssystems
Einführung Mitarbeiterbefragung
Feedbacksysteme überarbeiten
PR- Projekt
ROI
Perspectives
Financials
Customer/Market
Processes
Potentials
Balanced Scorecard Model (Module C)
17
Strategic Objectives + Explanations
Strategic Initiatives
KPI´s and
Target Values
BSC
Documents
Strategic Priorities
Cause and Effect Chains+ Explanations
•
•
•
•
1
2
3
4
Financial Perspective
Improve W.C.-ratio
. . .
. . .
. . .
Process Perspective Improve strategic akquisition process
. . .
. . .
. . .
. . .
Customer Perspective Establish innovator image
. . .
. . .
. . .
. . .
Learning & Growth Perspective Create global group thinking of local
management
. . .
. . .
. . .
. . .
Po
ten
cia
l P
rocess
Cu
sto
mer
Fin
an
ce
Documentation of strategic goals and corresponding KPI´s
Goal-No.: P 3 Upper level strategic goal: none
Measurement No.: P 3.1 Corporate level: 1
Person responsible for data: Frequence:
FORMULA:
Definition by negative separation (What does the strategic goal not mean?):
Person responsible for reporting:
Frequence of reports:
DEFINITION:
Person responsible for strategic goal:
Data source:
Strategic goal definition (What shall be reached?):
Story of Strategy
Strategic goal:
Definition/Formula:
Measurement:
Person responsible for result:
Balanced Scorecard Model (Module C)
18
18
BSC Model: Translate Strategy into Action (Module C)
19
• BSC Logic
• Presentation Content
• Navigation
• Different Data Inputs
• Easy Maintenance
• Company-wide Distribution
Balanced Scorecard Solution (Module D)
20
• Datasources
• Data Transformation
• Data Quality Assurance
• Interfaces
• Loading Data
Slide 9
ERP
KPI Data Mart Data Input
SW - Datatransfer
Quality Assurance
BSC Application
DWH
Business
Divisions
Scorecard User
Data Management Architecture
Administration & Support
KPI Interface Manual
Interface (Web Application )
Application Web Interface
Cubes Excel
Data Management (Module E)
21
• Communication
Mobilisation
Information
Training
• Integration in Management System
BSC Review Process
MBO
Incentive System
Change Management (Module F)
22
<Insert Picture Here>
Agenda
• What is the Balanced Scorecard ?
• How to implement a Balanced Scorecard Project?
• Unicredit Tiriac Bank Example
• Overview Oracle Strategy and Scorecard Solution
• Q&A
23
Employees: ~162,000
Customers: ~ 40 million
Branches: ~ 10,000
Total assets: ~ EUR 1tn
Banking operations in 22 countries
International network spanning ~50 countries
Global player in asset management: ~ € 86 bn in managed assets
Market leader in Central and Eastern Europe leveraging on the region’s structural strengths
UniCredit Group – at a glance*
*Data as of June 2010, UniCredit Group site
A Major Banking Group
24
UNICREDIT TIRIAC BANK AT A GLANCE*
• ~ 3,000 employees
• Over 500,000 clients
• 234 branches
• 20.5 bn RON total assets
*at 30 June 2010
25
OUR GROUP MISSION
We UniCredit people are committed to generating value for our customers.
As a leading European bank, we are dedicated to the development of the communities in which we live, and to being a great place to work.
We aim for excellence and we consistently strive to be easy to deal with.
These commitments will allow us to create sustainable value for our shareholders.
25
26
March April May June July August February January
Post Production Support
18.01
March April May June July August February January
Project Initialization
Workshops round 1
Workshops round 2
Consistency Check
Project Initialization
Test & Training
Design
Migr. PROD
30.03 WS round 1 ready
28.05 WS round 2 ready
Installation
Start
Start
Build
07.06
BSC Concept Ready
07.06 Design ready
25.06 Build ready
16.07 T&T ready
26. 07 Go Live
Inplenion Support and coach implementation BALANCED SCORECARD CONCEPT
01.03
SCORECARD IMPLEMENTATION
Balanced Scorecard Project
27
Definition of Strategic Initiatives
Definition and Linkage of Strategic
Objectives
Finance
Customers
Processes
Potentials
Priorisation and Budgeting of
Strategic Initiatives
3 2 1 4 5
WS 1:
Strat.Objectives , Cause-and-effect-
chain
WS 2:
KPI´s, Target Values and Strat. Initiatives
WS 3:
Initiative Priorization and Budgeting
Definition of Strategic Measures
Definition of Target Values
Str
ate
gic
Check
0
BSC Content Elaboration
28
Criterias for Rollout Type Type A Type F
External Customer Relation (E) vs. Internal Customer (I) E I
Revenue Center (R) vs. Cost Center (C) R C
Strategic Importance H L
Contribution to Business Value H L
Independency related to other units H L
Size of the Unit H L
Diversification of unit H L
Complexity of Unit L H
Rollout Type
OWN A Entity has an own strategy as starting point for the BSC elaboration
DERIVED BSC B BSC elaboration is derived from Superior BSC and some own strategic input
MIX C Financial and L&G perspectives use objectives from superior BSC; individual objectives for customer and process perspective are included.
STANDARD D Same strategic objectives and KPI's as superior BSC but with own target values (e.g. Branch)
STRATIGIC INITIATIVES E No BSC is elaborated. Only strategic initiatives are defined as contribution to the BSC objectives of superior entities.
BSC Communication F No BSC is elaborated but the company and department BSC is communicated and explained.
Legend
High (H)
Little (L)
OWN
1. Company
DERIVED DERIVED DERIVED DERIVED DERIVED DERIVED
2. Retail 3. CIB&PB 4. CFO 5. GBS 6. CRO 7. HR
Mix DERIVED
8.Large Corp 14. IT Phase 1 (2010)
Mix SI
9. Intl Cl/CBBM Operations Phase 2 (2011)
Mix SI
10. Mid Corporate Org Phase 2 (2011)
Mix SI
11. PB Fac. Man. Phase 2 (2011)
Mix
12. Markets
Mix
13. Real Estate
SI
Fin Adv & Prod
SI
GTB
BSC Architecture - 13 scorecards
BSC Rollout Structure
29
The above described integrated and comprehensive closed-loop system links strategic planning with operational planning, execution,
feedback, and learning. The system has many moving parts and interrelationships, and it requires simultaneous coordination among all
line and staff units.
Stage: Adapt/Translate the Strategy
5Y Financial Plan
Bank Strategy Map
Bank KPIs
Bank targets
Bank Initiatives Portfolio
Identyfy the Stratex portfolio
Stage: Align the organization
BL/CL strategic maps
BL/CL KPI's
BL/CL targets
BL/CL Initiatives
Stage: Plan Operation/ Budgeting
Projects prioritization and CAPEX budgeting
Operational budget
Personal MBO
Stage: Monitor & Learn
Data collection & validation process in BSC
Monthly Operational Review Meetings
Quarterly Strategy Review Meetings**
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Strategy- and Operational Management Cycle
30
<Insert Picture Here>
Agenda
• Introduction
• What is the Balanced Scorecard ?
• How to implement a Balanced Scorecard Project?
• Unicredit Tiriac Bank Example
• Overview Oracle Strategy and Scorecard Solution
• Q&A
31
OSSM Offers Strategy Management • Graphic Visualizations of
Strategy:
– Strategy Maps
– Strategy Trees
– Cause and Effect Maps
– Custom Visualizations
• Scorecards
• Collaboration
– Initiatives
– Threaded Discussions
– Related Documents
– Action Links
– Agents
32
OSSM Offers KPI Management
• Performance Tracking
– Against Target / Trending
– Threshold Assessment
• Ownership Definition
• Collaboration
– Threaded Discussions
– Related Documents
– Action Links
– Agents
– Drill to Analysis
– Watch Lists
33
OSSM Offers An Interactive, Collaborative Environment
• Dashboard integration
– Embed scorecard visualizations into dashboards to foster broad interactive analyses
• KPI Agents
– To monitor performance even when you can’t
• KPI & Scorecard Actions
– Align day-to-day decisions with your corporate strategy
• Annotations & Overrides
– Collaborate and document exceptions to prevent future recurrences
34
<Insert Picture Here>
Agenda
• Introduction
• What is the Balanced Scorecard ?
• How to implement a Balanced Scorecard Project?
• Unicredit Tiriac Bank Example
• Overview Oracle Strategy and Scorecard Solution
• Q&A