1. K T’s B S C : Becoming the Obvious Choice

2. Contents Reference Evaluation BSC of KT Balanced Score Card Introduction of KT

3. 1. Introduction of KT  Established in 1981 ( Completely privatized in 2002 )  The largest provider of high-speed internet, local, long- distance and international call services in Korea  Selected as top company in corporate governance excellence for Asia ( 2003 )  Nominated BSC Hall of Fame (2003)

4. BSC :: Balanced Score Card  Definition - Management practice that attempts to complement drivers of past performance (financial measures) with the drivers of future performance, such as customer satisfaction, development of human and intellectual capital, and learning. -(by BusinessDictionary.com) ONLY FROM THE FINANCIAL VIEW POINT ONLY FROM THE FINANCIAL VIEW POINT VIEW FROM Financial, Customer satisfaction, Internal business process. and Learning and Growth point VIEW FROM Financial, Customer satisfaction, Internal business process. and Learning and Growth point COMPREHENSIVECOMPREHENSIVE PRIOR METHOD BSC MUCH MORE CUSTOMER-ORIENTED!! CUSTOMER-ORIENTED!!

5. BSC of KT – Background Because of the expansion of the wireless market, entry of new competitors are accelerated.  Rapid collapse of the fixed phone market New business (Ex, Internet)  Preemption of competitors Because of the expansion of the wireless market, entry of new competitors are accelerated.  Rapid collapse of the fixed phone market New business (Ex, Internet)  Preemption of competitors “See” was weak in the management cycle “Plan- Do-See” Few of the officers knew about vision and strategy Performance measurement and corporate strategy and objectives were not corresponded. “See” was weak in the management cycle “Plan- Do-See” Few of the officers knew about vision and strategy Performance measurement and corporate strategy and objectives were not corresponded. Why did KT select the BSC? KT :: Come to a crisis

6. BSC of KT – Building Process Cyber World Leader BSC Performance Measurement Activity- Based Budgeting Multidimensional Profitability Analysis Insider trading / Replacement price Forecasting and Planning Distribution of Budget Resources Business Management Business Management ABC Profitability Management ABB Planning and Control Account Code KT :: Integrated Performance Management System Model

7. BSC of KT – Building Process Goal Changes and Administrative Aspects Institutional Aspects Information System Aspects

8. BSC of KT – Building Process Pilot Phase 0 6 Month (1998. 10.~ 1999. 4.) Perform Full-Scale Development Phase 1 7 Month (1999. 5.~ 1999. 12.) Build System Phase 2 5 Month (2000. 1.~ 2000. 6.) Assessment requirements review Practical possibilities Bench Marking Organization of TFT Group and Ready Assessment requirements review Practical possibilities Bench Marking Organization of TFT Group and Ready Strategy Review Develop Enterprise BSC Develop BSC for Employment and Business department User Requirements Review System Integration Database Development User Interface Development Operating Stabilization User Requirements Review System Integration Database Development User Interface Development Operating Stabilization KT :: The Promoting Procedure of BSC KT Members Survey

9. BSC of KT – Building Process KT Members Survey Recognition About Vision & Mission statement of KT  Important to achieve company’s outcome Only about 20% of the members of the company understand the vision Recognition About Vision & Mission statement of KT  Important to achieve company’s outcome Only about 20% of the members of the company understand the vision Long-term strategy : Lack of concreteness Communication about the strategy is not performed clearly within the organization Management goals and incentives are more impacted by the government policy than company Long-term strategies are not properly reflected in business plan and annual budget of the item Communication about the strategy is not performed clearly within the organization Management goals and incentives are more impacted by the government policy than company Long-term strategies are not properly reflected in business plan and annual budget of the item Vision of KT Communication about Strategy Lack of publicity Limited channels of information sharing Instructions, rather than strategy The department of promoting long-term business strategy is not clear Lack of publicity Limited channels of information sharing Instructions, rather than strategy The department of promoting long-term business strategy is not clear

10. BSC of KT – Building Process BSC Project promoting strategy Cyber World Leader Focus Data and wireless business BSC Promoting Strategy 1.Development of indicators that is connected to vision, strategy 2.Timely Offering Performance information through BSC system 3.Building strategic management process of performance rate BSC Promoting Strategy 1.Development of indicators that is connected to vision, strategy 2.Timely Offering Performance information through BSC system 3.Building strategic management process of performance rate Vision of KT Strategy of KT

11. BSC of KT - Characteristic Utilize leadership of manager for innovation Convert KT's strategic terms into practical terms Redefine KT's strategies and organization Make KT's strategy into member's daily business Improve KT's strategy into continuous process Five Principle of BSCFive BSC Creative communication Increase employee’s understandability of overall strategy and BSC Increase employee’s supportiveness Creative communication Increase employee’s understandability of overall strategy and BSC Increase employee’s supportiveness BSC development : Strategies, Overall Performances, Internal customers Management’s objectives + BSC  KPI  Executive officer’s interests & participation BSC development : Strategies, Overall Performances, Internal customers Management’s objectives + BSC  KPI  Executive officer’s interests & participation Relationship between overall strategy and KPI Relationship between each departments Relationship between upper class’ performance and lower class’ incentive Relationship between overall strategy and KPI Relationship between each departments Relationship between upper class’ performance and lower class’ incentive Introduction of BSC system Integrating data with EDW(enterprise data warehouse) Providing information with consistent data, systematized data Introduction of BSC system Integrating data with EDW(enterprise data warehouse) Providing information with consistent data, systematized data Strategy map shows the relationship between each strategic goals Generate KPI Strategy map shows the relationship between each strategic goals Generate KPI

12. Finance Customer Internal process Learning & Growth Increasing High Speed Internet Income Increasing High Speed Internet Income New ADSL Customer Customized Services Contents Strategy Market Collaboration with Contents Producer ADSL facilities Optimization Supporting ADSL network Service Quality Improvement Expert Training Expert Training Cross-functional Strategy Map of KT ADSL Service BSC of KT - Characteristic KT’s ADSL :: Cross-functional Strategy Map

13. Critical KPI Introduction Stage Growth Stage Maturity Stage

14. EVALUATION FROM OUTSIDE  BSC HALL OF FAME “ … They introduced BSC as a catalyst which provides their vision and strategies to the entire organization in 1999. …It went beyond our expectation…” Present : 11.78 Present : 11.78

15. EVALUATION FROM INSIDE Net Income $3.2 Billion (1999) → $15.8 Billion(2002) EVA Growth rate -$3.8 Billion(1999) → $1.3 Billion(2002) 5 million More Subscribers in 3 years 3 years’ run of CVA Enhancement World Best Internet Service Provider  Quantitative Assessment

16. EVALUATION FROM INSIDE  Qualitative Assessment KPI could be able to be used as a “Second Language” … How Well Do you Understand How Well Do you Understand About The KT’s VISION & STRATEGY About The KT’s VISION & STRATEGY? How Well Do you Understand How Well Do you Understand About The KT’s VISION & STRATEGY About The KT’s VISION & STRATEGY? Do You Think Your Daily Jobs are Related to the Company’s Strategies Do You Think Your Daily Jobs are Related to the Company’s Strategies? * Internal Survey (1999. 09 / 2001. 11)

17. Challenges to Sustainable Growth DO SEE PLAN FEEDBAC K Vision /Strategy Development Management Goal Establishment Strategy Translation Financial Planning  KT SEM Unified Process Marketing Business Order Management Fare ManagementCUSTOMERSERVICE Communication Network Installation Communication Network Management R & D * Monitoring Information - Daily - Strategic Performance - Business Environment Analysis - Risk Communication - Poor Indicators’ Career Concern - Strategy Executing Community - Assemblies - CEO’s Instructions

18. FUTURE OF KT

19. Reference  BSC Institute (http://www.balancedscorecard.org/)http://www.balancedscorecard.org/  Business Dictionary (http://www.businessdictionary.com)http://www.businessdictionary.com  Wikipedia(Eng ver.)  Improve Your Performance “News” – David Wilsey, 2009, Balanced Scorecard Institute)  Strategy map (http://strategymap.com.au/)http://strategymap.com.au/  The Balanced Scorecard - Measures that Drive Performance Robert S. Kaplan and David P. Norton. 1992, Jan-Feb, Harvard Business Review  https://www.bscol.com/bsc_online/technology/certified/https://www.bscol.com/bsc_online/technology/certified/  http://www.12manage.com/methods_balancedscorecard_ko.html  BSC Institute (http://www.balancedscorecard.org/)http://www.balancedscorecard.org/  Business Dictionary (http://www.businessdictionary.com)http://www.businessdictionary.com  Wikipedia(Eng ver.)  Improve Your Performance “News” – David Wilsey, 2009, Balanced Scorecard Institute)  Strategy map (http://strategymap.com.au/)http://strategymap.com.au/  The Balanced Scorecard - Measures that Drive Performance Robert S. Kaplan and David P. Norton. 1992, Jan-Feb, Harvard Business Review  https://www.bscol.com/bsc_online/technology/certified/https://www.bscol.com/bsc_online/technology/certified/  http://www.12manage.com/methods_balancedscorecard_ko.html