1. Lecture 11: BALANCE SCORE CARD
IFAP - UAJY
Lecture 11: BALANCE SCORE CARD

2. PERFORMANCE MANAGEMENT THINKING FRAMEWORK
If we can measure it, we can manage it
If we can manage it, we can achieve it
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3. Definition
Menurut Kaplan dan Norton [1996], Balanced Scorecard merupakan:
“…. a set of measures that gives top managers a fast but comprehensive view of the business….includes financial measures that tell the results of action already taken…complements the financial measures on customer satisfaction, internal processes, and the organization’s innovation and improvement activities operational measures that are the drivers of future financial performance.”
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4. Definition
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5. Definition
The traditional Balanced Scorecard supplemented traditional financial measures with criteria that in addition measured performance from those of customers, internal business processes, and learning and growth.
The new Balanced Scorecard translates a business unit's mission and strategy into tangible objectives and measures. The measures represent a balance between external measures for shareholders and customers, and internal measures of critical business processes, innovation, and learning and growth.
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9. The Strategy Focused Organization
Vision – What we aspire to be
Mission – What we do
Goals - What we want to achieve
Strategies – How we accomplish our goals
Measures – Indicators of our progress
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10. The Balanced Scorecard
Management translates its strategy into performance measures that employees understand and accept.
Customers
Financial
Performance measures
Learning and growth
Internal business processes
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22. The Balanced Scorecard
How do we look to the owners?
How can we continually learn, grow, and improve?
In which internal business processes must we excel?
How do we look to customers?
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23. Financial Perspective
“To succeed financial, how we should appear to our shareholder?”
Financial performance measures indicate whether the company’s strategy, implementation and execution are contribution to bottom line improvement
Typically are related to profitability: Operating Income, ROCE, EVA, Sales Growth, Cash Flow Increases siklus hidup produk
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24. Financial Perspective
How do we look to stockholders?
Survive
Succeed
Prosper
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25. Customer Perspective
“To achieve our vision, how should we appear to our customers?”
To identify the customer and market segments in which the business unit will complete and their performance in these target market
Typically includes customer satisfaction, customer retention, new customer acquisition, customer profitability analysis
Enables managers to articulate their unique customer for producing superior future financial returns
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26. Customer Perspective How do our customers see us? New products
Responsiveness
Quality
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27. Perspektif Pelanggan
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28. Perspektif Bisnis Internal
To satisfy our shareholder and customers, what business process must excel at? – the business processes: innovation, operations and post sales services
To identify the critical internal processes in which the company must excel, in order to increase customer satisfaction
Typically includes: time need to produce a new product, product cycle time, machine efficiency
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29. Perspektif Bisnis Internal
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30. Internal Business Perspective
At what must we excel currently?
Manufacturing/service excellence
New product/service introduction
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31. Perspektif Pertumbuhan dan Pembelajaran
“To achieve our vision, how will we sustain our ability to change and improve?”
Identify the infrastructure that the company must build to create long-term growth and improvement
3 principles sources: people, systems and organizational procedures
Typically includes: employee satisfaction, employee retention, employee training, and employee skill
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32. Innovation and Learning Perspective
Can we continue to improve and create value?
Technological leadership
Time to market
Employee training and satisfaction
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33. Cause effect relationship
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34. Advantages
Comprehensive
Coherent
Balance
Measurable
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35. Operating Income, ROI, EPS, cash Flow, Economic value added
Example
FINANCIAL PERSPECTIVE
Operating Income, ROI, EPS, cash Flow, Economic value added
To Succeed Financially, how should we appear to our shareholder
OBJECTIVES
MESAURES
TARGETS
INITIATIVES
ACTUAL PERF.
DIVIATIONS
To increase market value of the company by 18%/year over 5 years
Operating Income
Increasing by 10% each year
Control sales return
Return On Employed Capital
Increase by 5% each year
Monitor account receivables
Operating expenses
Decreases by 1% of sales/year
Monitor rework
Cash Flow
Negotiate credit terms
Sales Growth
Win customer
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36. The End
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