Balanced Scorecard Quick Guide April, 2010

Basics & Best Practices Terminologies Balanced Scorecard Quick Guide

In addition, Strategic & Business Planning relies on well-defined, best practice terminology Strategic & Business Planning Process Key Terminology Units Any Business or Functional Unit. According to the new organization structure, GACA has five Business Units (KKIA, KAIA, KFIA, Domestic Airports and ANS) and five Functional Units (Corporate Core, IT, Finance, Human Resources, Internal Audit) and a Safety and Economic Regulation function1 Key Performance Indicators (KPI) A measure used to monitor how well a business is achieving its quantifiable objectives. KPIs are found at both the strategic (assets turnover, customer satisfaction index) or operational levels (e.g. traffic volume) Goal Long-term target value (a number) of KPI; set to be attained after five years Objective Short-term target value (a number) of KPI; set to be attained in one year Strategy A means or action that will lead to the achievement of a goal (five years ahead) Initiative A means or action that will lead to the achievement of the objective (one years ahead). A set of initiatives form a strategy Balanced Scorecard Quick Guide Booz & Company 28 March 2009

Balanced Scorecard Quick Guide Contents BSC general work flow Internal Scanning Summary External Analysis Summary SWOT Analysis Summary Strategy Mapping Summary KPIs Setting Summary Targets Setting Summary Initiatives Setting Summary BSC Dashboard Summary Performance Assessment Summary Balanced Scorecard Quick Guide

Balanced Scorecard Quick Guide Now BSC general work flow Internal Scanning Summary External Analysis Summary SWOT Analysis Summary Strategy Mapping Summary KPIs Setting Summary Targets Setting Summary Initiatives Setting Summary BSC Dashboard Summary Performance Assessment Summary Balanced Scorecard Quick Guide

One Of The Best Practices For BSC Work Flow 1. Internal Scanning 2. External Scanning 3. SWOT Analysis One Of The Best Practices For BSC Work Flow 4. Strategy Mapping 5. KPIs Setting 6. Targets Setting 7. Initiatives Setting 8. BSC Dashboard 9. Performance Monitoring Balanced Scorecard Quick Guide

Balanced Scorecard Quick Guide Now BSC general work flow Internal Scanning Summary External Analysis Summary SWOT Analysis Summary Strategy Mapping Summary KPIs Setting Summary Targets Setting Summary Initiatives Setting Summary BSC Dashboard Summary Performance Assessment Summary Balanced Scorecard Quick Guide

Internal Scanning Summary Introduction Internal scanning is a strategic planning technique that helps in determining the firm’s strengths and weaknesses and any related issues inside the firm Purpose Knowing firm’s strengths and weaknesses Getting exposed to the firm’s processes and chain of commands Suitable Techniques The following techniques are suitable to serve the internal scanning purpose: Value Chain Analysis Capability Assessment Expected Outcomes Once the internal scanning is done, it is expected to have: Firm’s strengths Firm’s weaknesses Firm’s processes and value transferred from each process to another potentials for improvements Balanced Scorecard Quick Guide

Balanced Scorecard Quick Guide Now BSC general work flow Internal Scanning Summary Related Templates External Analysis Summary SWOT Analysis Summary Strategy Mapping Summary KPIs Setting Summary Targets Setting Summary Initiatives Setting Summary BSC Dashboard Summary Performance Assessment Summary Balanced Scorecard Quick Guide

Balanced Scorecard Quick Guide Value Chain Analysis Activity A Key Responsibilities Key Responsibilities Activity B Activity C Activity D Value transferred Value transferred Value transferred Value transferred Template Balanced Scorecard Quick Guide

Capability Assessment Organization Readiness (%) People Readiness (%) Process Readiness (%) System Readiness (%) Evidence and Comments Activity A Activity B Activity C Activity D Template Balanced Scorecard Quick Guide

Balanced Scorecard Quick Guide Now BSC general work flow Internal Scanning Summary External Analysis Summary SWOT Analysis Summary Strategy Mapping Summary KPIs Setting Summary Targets Setting Summary Initiatives Setting Summary BSC Dashboard Summary Performance Assessment Summary Balanced Scorecard Quick Guide

External Scanning Summary Introduction External scanning is a strategic planning technique that helps in determining the firm’s opportunities and threats and any related issues outside the firm Purpose Knowing firm’s opportunities and threats Getting exposed to the firm’s competitors and market changes Suitable Techniques The following techniques are suitable to serve the external scanning purpose: Industry Trends Porter 5 Forces Model Expected Outcomes Once the external scanning is done, it is expected to have: Firm’s opportunities Firm’s threats New trends and demands potentials for investments and competitive advantages Balanced Scorecard Quick Guide

Balanced Scorecard Quick Guide Now BSC general work flow Internal Scanning Summary External Analysis Summary Related Templates SWOT Analysis Summary Strategy Mapping Summary KPIs Setting Summary Targets Setting Summary Initiatives Setting Summary BSC Dashboard Summary Performance Assessment Summary Balanced Scorecard Quick Guide

Corporate Industry Trends Trend Description Supporting Evidence Implications Trend A Trend B Competitive Trends Market Trends Regulatory Technology Other Trends Template Balanced Scorecard Quick Guide

Template General External Environment Technological Change Specific International Events Demographic Trends Entry Complementors Rivalry Focal Firm Industry Buyers Substitutes Legal/Political Conditions Suppliers Cultural Trends Template Economic Climate Balanced Scorecard Quick Guide

Balanced Scorecard Quick Guide Now BSC general work flow Internal Scanning Summary External Analysis Summary SWOT Analysis Summary Strategy Mapping Summary KPIs Setting Summary Targets Setting Summary Initiatives Setting Summary BSC Dashboard Summary Performance Assessment Summary Balanced Scorecard Quick Guide

Balanced Scorecard Quick Guide SWOT Summary Introduction SWOT is a strategic planning technique that helps in determining the firm’s strategic directions and priories Purpose Knowing what strategies will sustain the growth of the firm and what will be done in order to extract advantaged over the competitors Suitable Techniques The following techniques are suitable to serve the SWOT purpose: SWOT Matching Expected Outcomes Once the SWOT is done, it is expected to have: Firm’s strategic directions and priorities Balanced Scorecard Quick Guide

Balanced Scorecard Quick Guide Now BSC general work flow Internal Scanning Summary External Analysis Summary SWOT Analysis Summary Related Templates Strategy Mapping Summary KPIs Setting Summary Targets Setting Summary Initiatives Setting Summary BSC Dashboard Summary Performance Assessment Summary Balanced Scorecard Quick Guide

Balanced Scorecard Quick Guide SWOT Summary Internal Factors Strengths Weaknesses External Factors Opportunities Threats Internal Strengths Matched with External Opportunities … Internal Weaknesses Relative to External Opportunities … Internal Strengths Matched with External Threats … Internal Weaknesses Relative to External Threats … Template Balanced Scorecard Quick Guide

Explore New Market Segments to Expand Revenue Base SO ST WO WT SWOT Analysis Strategic Priorities SO1 Leverage the planned expansion for Jeddah airport to attract the growing charter market in the region 1 Explore New Market Segments to Expand Revenue Base WT2 WO4 WO5 SO1 2 WO1 WO2 SO2 WO3 3 WO6 Template Balanced Scorecard Quick Guide

Balanced Scorecard Quick Guide Now BSC general work flow Internal Scanning Summary External Analysis Summary SWOT Analysis Summary Strategy Mapping Summary KPIs Setting Summary Targets Setting Summary Initiatives Setting Summary BSC Dashboard Summary Performance Assessment Summary Balanced Scorecard Quick Guide

Strategy Mapping Summary Introduction Strategy mapping is a strategic planning technique that helps in representing the firm’s strategies in such a way that shows the cause and effect of each strategy Purpose To ensure that each strategy does really serve a specific other strategy, and the overall strategies serve and feed the firm's vision Suitable Techniques The following techniques are suitable to serve the strategy mapping purpose: Strategy Map Expected Outcomes Once the strategy mapping is done, it is expected to have: Firm’s strategy map Balanced Scorecard Quick Guide

Balanced Scorecard Quick Guide Now BSC general work flow Internal Scanning Summary External Analysis Summary SWOT Analysis Summary Strategy Mapping Summary Related Templates KPIs Setting Summary Targets Setting Summary Initiatives Setting Summary BSC Dashboard Summary Performance Assessment Summary Balanced Scorecard Quick Guide

Balanced Scorecard Quick Guide LEARNING AND GROWTH PERSPECTIVE INTERNAL CUSTOMER FINANCIAL VISION Template Balanced Scorecard Quick Guide

Balanced Scorecard Quick Guide Now BSC general work flow Internal Scanning Summary External Analysis Summary SWOT Analysis Summary Strategy Mapping Summary KPIs Setting Summary Targets Setting Summary Initiatives Setting Summary BSC Dashboard Summary Performance Assessment Summary Balanced Scorecard Quick Guide

Balanced Scorecard Quick Guide KPIs Setting Summary Introduction KPIs (Key Performance Indicators) are measures that indicate how is the progress of strategic objectives and targets achievements Purpose To indicate and alarm the management for strategy and targets achievements or deviations Suitable Techniques KPIs Profile Benchmarking KPIs Libraries Expected Outcomes Once the KPIs setting is done, it is expected to have: Firm’s KPIs KPIs definitions & frequency of review KPIs formulas Strategic objectives that are measures by specific KPIs KPIs owners Balanced Scorecard Quick Guide

Balanced Scorecard Quick Guide Now BSC general work flow Internal Scanning Summary External Analysis Summary SWOT Analysis Summary Strategy Mapping Summary KPIs Setting Summary Related Templates Targets Setting Summary Initiatives Setting Summary BSC Dashboard Summary Performance Assessment Summary Balanced Scorecard Quick Guide

Balanced Scorecard Quick Guide KPI Definition KPI Formula Frequency Owner Definition X+Y = Z W/M/Q/S/A Name / Dept. Definition X+Y = Z W/M/Q/S/A Name / Dept. Definition X+Y = Z W/M/Q/S/A Name / Dept. Definition X+Y = Z W/M/Q/S/A Name / Dept. Template Balanced Scorecard Quick Guide

Balanced Scorecard Quick Guide Now BSC general work flow Internal Scanning Summary External Analysis Summary SWOT Analysis Summary Strategy Mapping Summary KPIs Setting Summary Targets Setting Summary Initiatives Setting Summary BSC Dashboard Summary Performance Assessment Summary Balanced Scorecard Quick Guide

Targets Setting Summary Introduction Targets are those values (determined in each KPI) that the management wants to achieve within a certain time Purpose To make the KPIs and the measurement more quantifiable and measureable Suitable Techniques Benchmarking Forecasting Feasibility studies Market Research Expected Outcomes Once the targets setting is done, it is expected to have: KPIs targets Targets values & units Balanced Scorecard Quick Guide

Balanced Scorecard Quick Guide Now BSC general work flow Internal Scanning Summary External Analysis Summary SWOT Analysis Summary Strategy Mapping Summary KPIs Setting Summary Targets Setting Summary Initiatives Setting Summary BSC Dashboard Summary Performance Assessment Summary Balanced Scorecard Quick Guide

Initiatives Setting Summary Introduction Are those actions that are predesigned and dedicated to achieve the determined targets and to activate specific KPIs Purpose To help the firm achieving strategic objectives Suitable Techniques Benchmarking Feasibility studies Market Research R&D Expected Outcomes Once the initiatives setting is done, it is expected to have: Strategic plan initiatives Owners Balanced Scorecard Quick Guide

Balanced Scorecard Quick Guide Now BSC general work flow Internal Scanning Summary External Analysis Summary SWOT Analysis Summary Strategy Mapping Summary KPIs Setting Summary Targets Setting Summary Initiatives Setting Summary Related Templates BSC Dashboard Summary Performance Assessment Summary Balanced Scorecard Quick Guide

Balanced Scorecard Quick Guide Strategic Priority KPI Target Initiative Strategic Priority A KPI1 KPI2 KPI3 VALUE (unit) Action A Action B Action C Strategic Priority B KPI1 KPI2 KPI3 VALUE (unit) Action A Action B Action C Strategic Priority C KPI1 KPI2 KPI3 VALUE (unit) Action A Action B Action C Strategic Priority D KPI1 KPI2 KPI3 VALUE (unit) Action A Action B Action C Template Balanced Scorecard Quick Guide

Balanced Scorecard Quick Guide Now BSC general work flow Internal Scanning Summary External Analysis Summary SWOT Analysis Summary Strategy Mapping Summary KPIs Setting Summary Targets Setting Summary Initiatives Setting Summary BSC Dashboard Summary Performance Assessment Summary Balanced Scorecard Quick Guide

Balanced Scorecard Quick Guide BSC Dashboard Summary Introduction It is a simple visualization of the firm’s performance Purpose To help the management taking decisions and being up to date with the firm’s overall performance Suitable Techniques MS Power Point Presentation MS Excel other software Expected Outcomes Once the BSC dashboard is done, it is expected to have: Projected BSC perspectives and firm's strategic priorities with notifying designs Balanced Scorecard Quick Guide

Balanced Scorecard Quick Guide Now BSC general work flow Internal Scanning Summary External Analysis Summary SWOT Analysis Summary Strategy Mapping Summary KPIs Setting Summary Targets Setting Summary Initiatives Setting Summary BSC Dashboard Summary Related Templates Performance Assessment Summary Balanced Scorecard Quick Guide

Template Internal Processes Dimension Indicators % (Actual / Target) Learning & Growth Dimension Indicators Financial Dimension Indicators Actual < 90% of Target 90% of Target < Actual < 100% of Target Actual >= 100% of Target Internal Processes Dimension Indicators % (Actual / Target) Template Balanced Scorecard Quick Guide Internal Processes Dimension Indicators % (Actual / Target)

Balanced Scorecard Quick Guide Now BSC general work flow Internal Scanning Summary External Analysis Summary SWOT Analysis Summary Strategy Mapping Summary KPIs Setting Summary Targets Setting Summary Initiatives Setting Summary BSC Dashboard Summary Performance Assessment Summary Balanced Scorecard Quick Guide

Performance Assessment Summary Introduction It is a systematic examination of the whole strategic plan and its achievements and implications Purpose Contiguous learning and improvement Suitable Techniques Cause& Effect systematic inspections and assessment Corrective planning Preventive planning Lessons Learned Expected Outcomes Once the performance assessment is done, it is expected to have: Performance assessment reports Balanced Scorecard Quick Guide

Balanced Scorecard Quick Guide Now BSC general work flow Internal Scanning Summary External Analysis Summary SWOT Analysis Summary Strategy Mapping Summary KPIs Setting Summary Targets Setting Summary Initiatives Setting Summary BSC Dashboard Summary Performance Assessment Summary Related Templates Balanced Scorecard Quick Guide

Template External Factors Internal Factors Description Operational Lever Root Cause Corrective Action Plan 1 2 % Plan Completed 30% 04/09 09/08 33% 01/09 11/08 80% w% dd/yy Template Balanced Scorecard Quick Guide

Template KPI(Target Unit) Comments Summary of drivers for performance Summary of actions taken to rectify any variance Overall Status Based on both current performance and on cumulative-to-date performance Gap =< -10% of Target -10% of Target < Gap < 0% of Target Gap >= 0% of Target Template Balanced Scorecard Quick Guide

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