balanced scorecard - Prof. Ranjan Kumar Bal

Report
WELCOME
BALANCED SCORECARD
A NEW MEASURE OF ENHANCING
ENTERPRISE EFFECTIVENESS
Prof. Ranjan K. Bal
Former President,
Indian Accounting Association
INTRODUCTION
 HBR: One of the most influential
management ideas of the past 75 years.
 New tool for measurement of overall / holistic
corporate performance.
 Shift from lopsided approach to a balanced
one
 Translate companies vision and strategy into
tangible objectives and measures.
 Enhances Enterprise Effectiveness
KPMG study
On “Measuring Performance of the
Organizations of the Future”
FINDING:
“Over-reliance on summary
financial performance measures
(Viz. ROI) was hindering an
organization’s abilities to create
future economic value.”
BSC
Robert Kaplan & David Norton
1992 - HBR : “The Balanced Scorecard :
Measures that Drive Performance”
1996 – BOOK : “ The Balanced Scorecard
:Translating Strategy into Action”
BSC
 Balances:Financial and Non-financial
performance measures
 Evaluates: Short-run and long-run
performance in a single report.
APPLICATION OF BSC
Many Fortune 500 Companies
More than 50 Indian Companies
Tata Group Companies
Dr. Reddy’s Lab
Bharati Tele
RPG
Godrej
PERSPECTIVE OF BSC
FINANCIAL
CUSTOMER
VISION
&
STRATEGY
LEARNING & GROWTH
INTERNAL BUSINESS
PROCESS
BSC
Enables an Organization to answer the
following questions:
How should it appear to its shareholders ?
How should it appear to its customers ?
What business processes must it excel at ?
How will it sustain its ability to change &
improve ?
FINANCIAL PERSPECTIVE
REVENUE / INCOME GROWTH
COST MANAGEMENT
ASSET UTILISATION
ROI
CUSTOMER PERSPECTIVE
CUSTOMER RETENTION
CUSTOMER ACQUISITION
CUSTOMER SATISFACTION
MARKET SHARE
Customer is the only valid
reason for the existence of a
business.
Peter F. Drucker
INTERNAL BUSINESS
PROCESS PERSPECTIVES
VALUE CHAIN:
R&D
DESIGN PROD. MARKETING
DISTRIBUTION
CUSTOMER SERVICE
Process Innovation
Product Reengineering:
Quality
Operational Efficiency - IT
HUL & INFOSYS
“Reengineering is the fundamental rethinking and
redesign of business processes & products.”
Marketing and innovation
should come before worries
about finances.
Peter F. Drucker
LEARNING & GROWTH
PERSPECTIVE
EMPLOYEE CAPABILITIES
INFORMATION SYSTEM CAPABILITIES
MOTIVATION , EMPOWERMENT
LEARNING & GROWTH
Arun Moira: Member, Planning Commission, GOI
To be a leader: - Continuous Learning
- Bigger Dream
Stephen Covey: Sharpening the Saw
Ajim Premji on JRD: JRD was a life-long
learner.
“Knowledge is being doubled in every
18 months.”
Dedicated employees
are key to the success
of any corporation.
Peter F. Drucker
IMPLEMENTING A BSC
PROCESS
Identify Vision
Identify Strategies
Identify Perspectives
Identify Measures
Create Action Plan
Evaluate
Follow Up
ENVIRONMENT OF SAIL
Steel industry witnessing a boom
Increased steel consumption:
30 Kg Vs. 144 Kg
High bargaining power of buyers
Bargaining power of suppliers
Threat of new entrants & competition
Threat of substitutes
SAIL’s CORPORATE PLAN 2012
To continue in the business of steel & steel related
activities
To enhance market share in growth segments
To improve profits by cost reduction & high value
added products
To achieve excellence in quality
To secure availability of key raw materials
To build customer centric processes,systems &
procedures
SAIL’s CORPORATE PLAN:
Comments
Shows strategic goals, but inter-relationship is
absent
Comprehensive, but lacks focus
Lacks focus on Product Profitability
No focus on Operational Excellence
No focus on Attracting & Retaining HR
To develop a Culture of Accountability
& Appreciation
“A manager’s job is to
pursue the interests of
the society.”
Peter F. Drucker
The Father of Modern Management
CHANGE
“Change is the only constant
in to-day’s world.”
ISB
“A company can not survive
without change.”
K.V.Kamath
THANK YOU

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