《BSC平衡记分卡》PPT课件.ppt

Dr. Dila Agrizzi,- Introduction - The main types of information to implement a BSC. - Examples of performance measures that could be used in diverse sectors: - Service, - Manufacturing, - Profit, and - Not-for-profit organizations. - Summary - Questions - Case Studies.,Topic : Strategic Management Accounting (SMA) and the Balanced Scorecard (Kaplan and Norton, 1996a,b) - Lectures layout -,Dr. Dila Agrizzi,Introduction Aim Learning Objectives Relevance,M3006 STRATEGIC MANAGEMENT ACCOUNTING (SMA) THE BALANCED SCORECARD,Dr. Dila Agrizzi,The Balanced Scorecard (Kaplan and Norton, 1996a,b) Traditionally Management Accounting focused mainly on financial performance measures. Greater emphasis started being given to incorporating non-financial measures into the formal reporting system. The result was a proliferation of performance measures. BSC = Balancing financial and non-financial performance measures to evaluate both short and long-run performance in a single report.,Dr. Dila Agrizzi,BSC,BSC is a framework intended to make the strategy of the business more coherent by strongly linking it to particular targets and initiatives. BSC should be used to clarify, communicate and manage strategy.,Dr. Dila Agrizzi,BSC Well-constructed BSC,Which customer should be targeted? How will they be attracted and retained at a profit? What internal business processes should be improved?,Dr. Dila Agrizzi,The Balanced scorecard (BSC) (Kaplan and Norton, 1996a,b),The BSC consists of two types of performance measures: Lagging measures: Financial measures (lag indicators) = outcomes = consequences arising from management decisions made earlier. Leading measures: Non-financial measures = aspects that drive performance (measuring changes).,Dr. Dila Agrizzi,BSC Main types of information (An integrated set of performance measures),BSC = Four Perspectives: How do we look to shareholders? (Financial) How do customers see us? (Customer) What must we excel at? (Internal business process) Can we continue to improve and create value? (Learning and growth) ?,Dr. Dila Agrizzi,FOCUS ON CURRENT PRACTICE BSC at British Telecom (1990)(1) (BT Chairman, Cited in Creelman, 2000, p.11),“Indeed, I would make culture the fifth balanced scorecard perspective. The Scorecard or any performance management methodology for that matter has to resonate with the fundamental values of the organization. If doesnt it will be rejected.” BT was privatised in 1984,Dr. Dila Agrizzi,FOCUS ON CURRENT PRACTICE BSC at British Telecom (1990)(1.1),Five core values seemed as necessary for transforming the organisational culture from a monopoly mindset: Putting the customer first Being professional Working as a team Respecting each other Being committed to continuous improvement.,Dr. Dila Agrizzi,The Balanced Scorecard for translating a strategy into operational processes,Dr. Dila Agrizzi,The cause-and-effect relationship Chadwick case study (Laitinen, 1996; Norreklit, 2000),Dr. Dila Agrizzi,BSC = Four Perspectives: (Chadwick case study) 1. The financial perspective Typical measures include ROI, RI, ROCE and EVA TM Revenue growth, cost reduction and asset utilization. “There is the argument that by focusing on other perspectives, financial measures will take care of themselves.”,Dr. Dila Agrizzi,2. The customer perspective,Typical generic measures include: Market share (volume consumption/good) Value share (consumption in value/brand) Customer retention and loyalty Customer acquisition Customer satisfaction Customer profitability (Kanthal Case),Dr. Dila Agrizzi,3. The internal business perspective (innovation, operation and post-service sales processes) Typical innovation : % of sales from new products. New product introduction versus competitors. Product development break-even time. Typical operation : Cycle time and throughput time . Quality. Activity and process costs. 3. Post-sales service processes: Develop appropriate time, Quality, and Process measurements.,Dr. Dila Agrizzi,*Process time is the only value-added time.,3. The internal business perspective 2. Typical operation : .Cycle time and throughput time,Wait Time,Process Time* + Inspection Time + Move Time + Queue Time,Order Received,Production Started,Goods Shipped,Delivery Cycle Time,Throughput Time,Dr. Dila Agrizzi,Delivery Cycle time and throughput time,Wait Time,Throughput Time=manufacturing time,Process Time + Inspection Time + Move Time + Queue Time,Order Received,Production Started,Goods Shipped,Delivery Cycle Time,Dr. Dila Agrizzi,FOCUS ON CURRENT PRACTICE The UK Banks,The UK banks require 3 to 4 weeks to approve an application for a mortgage loan on a house. The application form includes the individuals employment history, income, and financial assets and liabilities. Personnel at the bank check credit references and review the entire application before granting the loan. A manager at one bank wondered why this process takes so long and asked employees to keep track of how much time they actually worked on processing an application. He discovered that processing an application took on average 26 days, but only about 15 minutes of this time was actual work. All of the rest of the time, the application was waiting in someones in-tray. The manufacturing cycle efficiency (MCE) was, therefore, only 0,0004 (15 minutes/26 days x 24 hours/day x 60 min/h). By redesigning and automating the process, the cycle time was cut down to 15 min and the MCE rose to 1.0.,Dr. Dila Agrizzi,4. The learning and growth perspective (Long-term growth and improvement) Three principal categories identified: Employee capabilities Information system capabilities Motivation,empowerment and alignment,Dr. Dila Agrizzi,The BSC and Learning,Learning improves business processes.,Improved business processes improve customer satisfaction.,Improving customer satisfaction improves financial results.,Dr. Dila Agrizzi,Exercise,Think about producing a diagram showing the possible strategy at Jaguar and the Balanced Scorecard? Consider the cause-and-effect relationship,PROFIT,Contribution margin per car,Number of cars sold,Customer surveys: Satisfaction with Options available,Financial,Customer,Numbers of options available,Time to install an option,+,Employee skills in Installing options,Internal Business Processes,Learning and Growth,POSSIBLE STRATEGY AT JAGUAR & THE BSC,+,+,+,+,+,Dr. Dila Agrizzi,Features of a Good BSC,It tells the story of a companys strategy by articulating a sequence of cause-and-effect relationships. It assists in communicating the strategy to all members of the organisation by translating the strategy into a coherent and linked set of measurable operational targets.,Dr. Dila Agrizzi,Features of a Good BSC,In for-profit companies, the BSC places strong emphasis on financial objectives and measures. The scorecard limits the number of measures used by identifying only the most critical ones. The BSC highlights sub-optimal tradeoffs that managers may make.,Dr. Dila Agrizzi,Pitfalls to be avoided when implementing a BSC,1. Dont assume the cause-and-effect linkages to be precise. They are merely hypotheses. A Critical challenging is to identify the strengths and speed of the causal linkages among the non-financial and financial measures. An organisation must gather evidence of these linkages over time. With experience businesses should alter their scorecards if needed, instead of trying to design the perfect scorecard at the outset.,Dr. Dila Agrizzi,Pitfalls to be avoided when implementing a BSC,2. Dont seek improvements across all measures all the time. This approach may be inappropriate because of trade-off may need to be made across various strategic goals. For example, emphasising quality and on-time performance beyond a point may not be worthwhile further improvement in these objectives may be inconsistent with maximisation.,Dr. Dila Agrizzi,Pitfalls when implementing a BSC (cont.),3. Dont use only objective measures on the scorecard. However, when using subjective measures, managers must be careful to trade off the benefits of the richer information these measures provide against the imprecision and potential for manipulation.,Dr. Dila Agrizzi,Pitfalls when implementing a BSC (cont.),4. Dont fail to consider both costs and benefits of initiatives such as spending on information technology and research and development before including these objectives in the scorecard. Otherwise, managers may focus the organisation on measures that will not result in overall long-run financial benefits.,Dr. Dila Agrizzi,Pitfalls when implementing a BSC (cont.),5. Dont ignore non-financial measures when evaluating managers and employees. Managers tend to focus on what their performance is measured by. Excluding non-financial measures when evaluating will reduce the significance and importance that managers give to non-financial scorecard measures.,Dr. Dila Agrizzi,Do Remember:,Most, but certainly not all, BSCs will contain performance measures that fall into at least four main categories: financial, customer, financial business process, and learning and growth. The ultimate objectives of the organisation are usually financial, but better financial results cannot be attained without improving customers perceptions of the companys products and services and to achieve this it is necessary that employees learn.,Dr. Dila Agrizzi,The Balanced Scorecard Summary,Continual improvement is encouraged. Managers should carefully select the performance measures for their companys balanced scorecard.,Dr. Dila Agrizzi,Balanced Scorecard Summary,The BSC should be tailored to the companys strategy; each companys balanced scorecard should be unique. The theory should be viewed as tentative and subject to change. If the theory changes, then the performance measures on the balanced scorecard should also change.,Dr. Dila Agrizzi,Summary,The BSC is a relatively new approach to managing organizations and consists of an integrated system of performance measures. BSC approach reflects the idea that cost and financial data alone cannot capture all the characteristics of competitive choice. It highlights the non-financial objectives that an organisation must achieve in order to meet its financial objectives.,Dr. Dila Agrizzi,Summary,The BSC provides a management accounting system that supports an organizations strategy with financial and non-financial performance indicators. Different companies will have different balanced scorecards because they have different strategies.,Dr. Dila Agrizzi,References,Booth, R. (1997) Performance Management: Making it happen. Management Accounting (UK), November: 28-30 (handout) Chow, C.W., Haddad, K.M. and Williamson, J.E. (1997) Applying the balanced scorecard to small companies. Management Accounting (US), August: 21-27 (not available in the library) Ittner et al (2003) “Performance implications of strategic performance measurement in financial services firms”, Accounting, Organization and Society, vol 28, p. 715. Kaplan, R.S. and Norton, N.P. (1990) The balanced scorecard measures that drive performance. Harvard Business Review, January-February: 71-79 Kaplan, R.S. and Norton, N.P. (1996) The balanced scorecard: translating strategy into action. Harvard Business School Press Kaplan, R.S. and Norton, N.P. (2000) having trouble with your strategy? Then map it. Harvard Business Review, September-October: 167-176 (available at PER HF in library) Lynch and Cross, Measure Up! Yardsticks for C