1. North Delhi Power Limited Balanced Scorecard (BSC) NITIN ROHILLA Head (IT-SAP) NORTH DELHI POWER LIMITED Balanced Scorecard (BSC) by NITIN ROHILLA Head (IT-SAP) NORTH DELHI POWER LIMITED

2. North Delhi Power Limited 2 Outline of Presentation Background of BSCBackground of BSC Origin of BSCOrigin of BSC What is BSC?What is BSC? Components of BSC – Perspectives, Objectives, Measures, Targets, Initiatives etcComponents of BSC – Perspectives, Objectives, Measures, Targets, Initiatives etc NDPL BSC Scenario – Vision, Strategies, BSCsNDPL BSC Scenario – Vision, Strategies, BSCs An example - IT BSCAn example - IT BSC

3. North Delhi Power Limited 3 Organizational Performance MeasurementOrganizational Performance Measurement Organizational Strategy ManagementOrganizational Strategy ManagementBackground

4. North Delhi Power Limited 4 Shortcomings of Traditional Performance Measurement System Financial measures are not relevant to many levels in the organizationFinancial measures are not relevant to many levels in the organization The reports sometimes stimulate actions that have a positive impact on the short term results, but a negative effect on the long term Sacrifice long term thinkingSacrifice long term thinkingBackground

5. North Delhi Power Limited 5 Barriers to Strategy Execution - Robert S. Kaplan and David P. Norton

6. North Delhi Power Limited 6 A Balanced Approach Financial statements will remain an important tool for organizations since they ultimately determine whether improvements in customer satisfaction, quality, on-time delivery, and innovation are leading to improved financial performance and wealth creation for shareholders. What we need is a method of balancing the accuracy and integrity of our financial measures with the drivers of future financial performance of the organization.

7. North Delhi Power Limited 7 Origin of Balanced Scorecard Developed in early 1990s byDeveloped in early 1990s by –Dr Robert Kaplan (accounting professor at Harvard university) –David Norton (a consultant) As a result of 1 year research project with 12 companies

8. North Delhi Power Limited 8 Innovation of BSC "The balanced scorecard retains traditional financial measures. But financial measures tell the story of past events, an adequate story for industrial age companies for which investments in long-term capabilities and customer relationships were not critical for success. These financial measures are inadequate, however, for guiding and evaluating the journey that information age companies must make to create future value through investment in customers, suppliers, employees, processes, technology, and innovation.“ - Kaplan and Norton

9. North Delhi Power Limited 9 What is BSC ?

10. North Delhi Power Limited 10 BSC Strategy = Doing the right things Operations = Doing things right Change = Doing things differently BSC = Strategy + Operations + Change SUCCESS = Effective, Well Executed Strategy + Efficient Operations + Meaningful Change

11. North Delhi Power Limited Desired state Differentiating activities What must be done well to implement strategies How strategic success is measured Mission Vision Strategies / Goals Objectives Measures Strategy Management with BSC 11

12. North Delhi Power Limited 12 BSC – Measures four Perspectives

13. North Delhi Power Limited 13 BSC – Financial Perspectives What financial steps are necessary to ensure the execution of our strategy/goals?What financial steps are necessary to ensure the execution of our strategy/goals? Are the company’s strategy, implementation and execution are contributing to overall improvement ?Are the company’s strategy, implementation and execution are contributing to overall improvement ? Are we meeting operational and financial targets?Are we meeting operational and financial targets?

14. North Delhi Power Limited What critical processes must we excel at to satisfy our customers/stakeholders?What critical processes must we excel at to satisfy our customers/stakeholders? What must be done internally to meet customer expectations?What must be done internally to meet customer expectations? Cluster for internal process perspectives areCluster for internal process perspectives are Operations management Customer management Innovation Regulatory and social etc. BSC – Internal Process Perspective 14

15. North Delhi Power Limited Who are our target customersWho are our target customers How do our customers see us?How do our customers see us? How do customers rate our performance?How do customers rate our performance? It measuresIt measures Value proposition (Time, quality, performance, service and cost) Outcome of value proposition (Customer satisfaction, market share) BSC – Customer Perspectives 15

16. North Delhi Power Limited Focus on intangible assets – skills, capabilitiesFocus on intangible assets – skills, capabilities How can we continue to improve?How can we continue to improve? What capabilities and tools do our employees need to execute our strategy/goals?What capabilities and tools do our employees need to execute our strategy/goals? Clusters areClusters are Human capital Information capital Organization capital IncludesIncludes Employee training Corporate self improvement BSC – Learning, Innovation and Growth Perspective 16

17. North Delhi Power Limited BSC - Objectives Derived from strategyDerived from strategy Describe the activities that we must perform well to successfully implement strategyDescribe the activities that we must perform well to successfully implement strategy Grouped in four perspectivesGrouped in four perspectives Start with an action verb: increase, develop, improve, lower, achieve etc.Start with an action verb: increase, develop, improve, lower, achieve etc. For example -For example - Improve Customer Service. 17

18. North Delhi Power Limited 18 BSC - Measures For each objective, a measure is assignedFor each objective, a measure is assigned Measurement provides feedback on meeting the strategic objectiveMeasurement provides feedback on meeting the strategic objective

19. North Delhi Power Limited 19 BSC – Measure Target Once measures are established, set a target for each measureOnce measures are established, set a target for each measure Targets put focus on the strategy, expressing the specifics of the strategyTargets put focus on the strategy, expressing the specifics of the strategy Targets push the organization to a required level of performanceTargets push the organization to a required level of performance When an organization hits its targets, then it has successfully implemented its strategyWhen an organization hits its targets, then it has successfully implemented its strategy

20. North Delhi Power Limited 20 Strategic Initiatives Special project initiated in order to achieve the objective For example – improving customer service may require a new customer management system

21. North Delhi Power Limited 21 Building the BSC Begin with strategic plan – what things are critical to future success? Focus on customers – what values will we add to our customers Define the processes – how will we deliver these services to our customers Build the organization – what capabilities must we put in place

22. North Delhi Power Limited 22 Benefits of using BSC Focusing the whole organization on the few key things needed to create breakthrough performance. Helping to integrate various corporate programs, such as quality, re-engineering, and customer service initiatives. Breaking down strategic measures to local levels so that unit managers, operators, and employees can see what's required at their level to roll into excellent performance overall. - Kaplan and Norton

23. North Delhi Power Limited 23 NDPL BSC SCENARIO

24. North Delhi Power Limited 24 Corporate Balanced Scorecard ITHROps.TS&PFinanceAdmin.Comm. 5 Grp.3 Grps.Dst.,ZnTS&P5 Grps.6 Grps.9 Grps. JD/KRA. JD/KRA Mapping the Objectives thru Funct. Scorecards Mapping the Initiatives thro Perf. Scorecards OPMSOPMS DPMSDPMS IPMSIPMS Management by Facts

25. North Delhi Power Limited 25 NDPL Strategies S1 – Maintain and grow core regulated electricity business in NDPL licensed areaS1 – Maintain and grow core regulated electricity business in NDPL licensed area S2 - Secure low cost power generationS2 - Secure low cost power generation S3 – Provide services not envisaged in the power distribution core business within or outside NDPL areaS3 – Provide services not envisaged in the power distribution core business within or outside NDPL area S4 – Deploy new electricity distribution elsewhereS4 – Deploy new electricity distribution elsewhere

26. North Delhi Power Limited 26 NDPL BSCs Corporate BSCCorporate BSC Administration BSCAdministration BSC Commercial BSCCommercial BSC Finance BSCFinance BSC HR BSCHR BSC IT BSCIT BSC Operations BSCOperations BSC

27. North Delhi Power Limited 27 BSC Implementation Tool at NDPL SAP SEM (Strategic Enterprise Management Module) – development toolSAP SEM (Strategic Enterprise Management Module) – development tool SAP Enterprise Portal – user interfaceSAP Enterprise Portal – user interface

28. North Delhi Power Limited 28 Awards & Recognitions.. to name a few NDPL Wins Balanced Scorecard Hall of Fame Award – 2008

29. North Delhi Power Limited 29 Thanks