1. The Siliwangi University Post Graduate Programs
The Balanced Scorecard
Presented To
MM PROGRAM
Welcome and Introductionsv
The Siliwangi University
Post Graduate Programs

2. The Balanced Scorecard What is it?
Definition:
The Balanced Scorecard is a management tool that provides stakeholders with a comprehensive measure of how the organization is progressing towards the achievement of its strategic goals.

3. The Balanced Scorecard What is it?
Balances financial and non-financial measures
Balances short and long-term measures
Balances performance drivers (leading indicators) with outcome measures (lagging indicators)
Should contain just enough data to give a complete picture of organizational performance… and no more!
Leads to strategic focus and organizational alignment.

4. The Balanced Scorecard Why do it?
To achieve strategic objectives.
To provide quality with fewer resources.
To eliminate non-value added efforts.
To align customer priorities and expectations with the customer.
To track progress.
To evaluate process changes.
To continually improve.
To increase accountability.

5. The Balanced Scorecard Why do it?
It works!
In just 90 days, Sandia Labs was able to redirect $190,000 in savings by dropping initiatives that didn’t fit their overall strategy.
“The BSC has forced our management team to focus beyond financial measures… too often in the past we would get sucked into short-term thinking.”
“The BSC dramatically improved our data analysis… we don’t overreact nearly as much as we used to.”

6. The Strategy Focused Organization
Mission – What we do
Vision – What we aspire to be
Strategies – How we accomplish our goals
Measures – Indicators of our progress

7. A Model for Strategic Planning Environmental Scan Strengths Weaknesses
Opportunities Threats
A Model for
Strategic
Planning
Values
Mission &
Vision
Strategic Issues
Strategic Priorities
Objectives, Initiatives, and Evaluation

8. The Strategy Focused Organization
The Five Principles
Translate the strategy to operational terms.
Align the organization to the strategy.
The Balanced Scorecard, when focused on driving strategy, is the recipe for success, bringing together varying departments, all working to accomplish an overall mission. The Balanced scorecard will take your vision and translate that into terms and goals for all levels of the organization.
Use the Balanced Scorecard to assist in breaking down barriers between departments. Use of strategic themes link separate operational units.
Source: The Strategy Focused Organization, Norton & Kaplan

9. The Strategy Focused Organization
The Five Principles (cont.)
Make strategy everyone’s job.
Make strategy a continual process.
Mobilize change through executive leadership
It is important to communicate and educate everyone in the organization. Understanding of the strategy is key, as well as how each individual contributes to the achievement of the strategy.
Use regular management meetings to review status of measures and address the need to modify the strategic initiatives if performance is not improving. These meetings should be used as a learning opportunity, focused on team problem solving and adaptation to new situations.
Improvement is the ultimate goal, and cannot be attained without executive leadership. Effective leaders provide an environment that values creativity and accepts “risk taking” as an integral part of change management. Executives also need to use the Balanced Scorecard to communicate successes and opportunities for improvement.
Source: The Strategy Focused Organization, Norton & Kaplan

10. The Balanced Scorecard and The Big Picture
Activity Based Costing
Economic Value Added
Forecasting
Benchmarking
Market Research
Best Practices
Six Sigma
Statistical Process Control
Reengineering
ISO 9000
Total Quality Management
Empowerment
Learning Organization
Self-Directed Work Teams
Change Management

11. Linking it all together….
Strategic Direction
Create Environment
For Change
Strategic Performance Management System
Communicate Strategies
Define Objectives
Implement BSC
Balanced Scorecard
Measure Performance
Improve Processes
Evaluate and Adjust
Continuous Improvement
Redefine Initiatives
Linking it all together….

12. THE BALANCED SCORECARD
FINANCIAL/REGULATORY
To satisfy our constituents,
what financial & regulatory
objectives must
we accomplish?
CUSTOMER
To achieve our vision,
what customer needs must
we serve?
INTERNAL
To satisfy our customers and
stakeholders, in which business
processes must we excel?
LEARNING & GROWTH
To achieve our goals, how
must we learn, communicate
and grow?

13. Customer Perspective To achieve our vision, what customer needs
must we serve?
Possible Performance Measures
Customer Satisfaction (Average)
Satisfaction Gap Analysis (Satisfaction vs.
Level of Importance)
Satisfaction Distribution (% of each area scored)

14. Financial / Regulatory Perspective
To satisfy our constituents, what financial and
regulatory objectives must we accomplish?
Possible Performance Measures
Cost / Unit
Unfunded Requirements or Projects
Cost of Service
Budget Projections and Targets

15. Internal Perspective To satisfy our customers, in which business
processes must we excel?
Possible Performance Measures
Cycle Time
Completion Rate
Workload and Employee Utilization
Transactions per employee
Errors or Rework

16. Learning and Growth
To achieve our goals and accomplish core activities, how must we learn, communicate and work together?
Possible Performance Measures
Employee Satisfaction
Retention and Turnover
Training Hours and Resources
Technology Investment

17. Why Measure?
To determine how effectively and efficiently the process or service satisfies the customer.
To identify improvement opportunities.
To make decisions based on FACT and DATA

18. Measurements Should: Translate customer expectations into goals.
Evaluate the quality of processes.
Track our improvement.
Focus our efforts on our customers.
Support our strategies.

19. Targets
“If you don’t know where you’re going, you’re probably not gonna get there.”
Forrest Gump

20. Link it together…. DIVISION CUSTOMER FINANCIAL INTERNAL PROCESS
 LEARNING & GROWTH
DEPT.
Hum. Rscrs.
Univ. Police
Facilities
Police
Parking
FUNCTION
Measure: Satisfaction Index
Current: Target: 4.0

21. The Balanced Scorecard as a Management System
BSC reviewed regularly to enhance operational decision-making
Success of initiatives assessed based on DATA… not opinions
Leading indicators evaluated to confirm accuracy of assumptions

22. The Balanced Scorecard as a Management System
The BSC is a “Living Document” that requires regular revision of objectives, measures and initiatives:
How are we doing?
Are we measuring the right things?
What initiatives do we need to get us where we want to go?
Have our organizational goals changed?

23. Advantages to this Approach
Simple to Use and Understand
Based on Vision and Strategy
Multidimensional
Quantitative and Qualitative Measures
Current and Future
Provides Measurement of and Method for Improving our Services
Ties QI initiatives together
Serves as a Communication Tool

24. Suggested Readings
Kaplan, Robert and Norton, Edward. The Balanced Scorecard.
Harvard Business Publishing, 1998
Kaplan, Robert and Norton, Edward. The Strategy-Focused Organization.
Harvard Business Publishing, 2001
Buckingham, Marcus and Coffman, Curt. First, Break All the Rules
The Gallup Organization, 1999
Brown, Mark. Keeping Score. Mark Graham Brown, 1996

25. Thank You Iman Pirman Hidayat Siliwangi University