KEC Dhapakhel Lalitpur BALANCED SCORECARD KEC Dhapakhel Lalitpur

BALANCED SCORECARD While working, in general, trend is towards focusing on Today only. BSC is a strategy map for balancing Today and Tomorrow. Integrates the immediate & future: Set targets, measure and reward. At same time, orients one towards the future desired state of affairs, as set by Mgt. Setting targets involves all concerned. Foster team spirit and group motivation.

Mission-Vision-Strategy BALANCED SCORECARD A Gap Exists Between Mission-Vision-Strategy and Employees’ Everyday Actions The Balanced Scorecard Describes How the Strategy will be Executed

BALANCED SCORECARD The Balanced Scorecard is a strategic planning and management system used to align business activities to the vision and strategy of the organization by monitoring performance against strategic goals.  Balanced Scorecard concept was first published in 1992 by Kaplan and Norton, a book followed in 1996. Traditional performance measurement that only focus on external accounting data are obsolete. The approach is to provide 'balance' to the financial perspective.

BALANCED SCORECARD The balanced scorecard (BSC) is a strategic planning and management system that organizations use to: Communicate what they are trying to accomplish Align the day-to-day work that everyone is doing with strategy Prioritize projects, products, and services Measure and monitor progress towards strategic targets

4 Perspectives in Balance Scorecard The BSC translates mission and strategy into four dimensions:- Financial: "How do we look to our shareholders? ” Customer: "How do we become our customers’ most valued supplier?” Internal Process: “What processes must we excel at to achieve our financial and customer objectives?” Innovation and Growth: “How can we continue to improve and create value with employee capabilities, systems, and structure?”

A COMPANY’S BALANCED SCORECARD FINANCIAL PERSPECTIVE IMPROVE RETURNS INCREASE SALES TURNOVER IMPROVE ASSETS UTILIZATION CAPTURE NEW MARKET. EXTEND PRODUCT RANGE REDUCE STOCK LEVELS. IMPROVE STOCK CONTROL. REDUCE LEAD TIMES INTERNAL PROCESS PERSPECTIVE CUSTOMER PERSPECTIVE DEVELOP NEW PRODUCTS MODIFY EXISTING PRODUCTS IDEAS FROM EMPLOYEES FEEDBACK FROM CUSTOMERS MARKET RESEARCH LEARNING & GROWTH PERSPECTIVE

Organization from 4-Perspectives

Strategy Mapping One of the most powerful elements in the BSC methodology is the use of strategy mapping to visualize and communicate how value is created by the organization. A strategy map is a simple graphic that shows a logical, cause-and-effect connection between strategic objectives (shown as ovals on the map). Generally speaking, improving performance in the objectives found in the Organizational Capacity perspective (the bottom row) enables the organization to improve its Internal Process perspective (the next row up), which, in turn, enables the organization to create desirable results in the Customer and Financial perspectives (the top two rows).

CAUSE & EFFECT RELATIONSHIPS & BALANCED SCORECARD STRATEGY MAPS- A CHAIN OF CAUSE AND EFFECT LOGIC THAT CONNECTS THE DESIRED OUTCOMES WITH THE DRIVERS EFFECT REVENUE GROWTH FINANCIAL VALUE PROPOSITION CUSTOMER LOYAL CUSTOMERS CAUSE QUALITY PRODUCT IF- THEN WHAT ? QUALITY PRODUCTION QUALITY MATERIALS INTERNAL CAPABILITIES LEARNING & GROWTH SKILLED WORKFORCE + TECHNOLOGY HOW ? ENABLERS

ALIGNING CUSTOMER VALUE MANAGEMENT WITH BALANCED SCORECARD Financial Results Perspective Value Proposition Customer Capabilities Internal Process Enablers Learning & Growth Process Enabling Infrastructure Systems/skills/assets/IT

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