Week 22

WEEK 22

LEARNING JOURNAL

What is your understanding on the Balanced Score Card approach? How useful is it for the Companies?

The popularity of Balanced Score Card has been increasing day by day in the business world. There are various business which have left a gap between strategy development and implementation which was created while building their objectives by focusing on financial targets and goals of the little relevance to long-term goals or visions. Balanced Score Card is and approach which helps the businesses to cover the gap that exists between the development and implementation. It is a vast strategic tool that provides the organization the ability to clarify the vision and strategy and turn them into action. It focuses both on the internal business process involved and external outcomes from so that it can continuously improve the strategic action, performances and results. Balanced Score Card can be defined as a strategic and management tool that can be used to draw line between the business activities and vision of an organization. (Frank Figge, Tobias Hahn, 2002).

There are four perspectives which Balanced Score Card looks into:

1.      Financial Perspective

2.      Customer Perspective

3.      Process

4.      Innovation

Usefulness of Balanced Score Card approach for the companies is mentioned below:

1.  It enables an organization to generate more useful and creative ideas. In other way we can say that it increases organization’s creativity

2. It helps to cover the gap between strategies of various level of organization with the performances measures.

3. The results obtained are usable i.e. changes strategy into desired action and behavior.

4. It enables companies to overcome problems like performance measurements, rise of intangible assets and implementation of strategy.

5. It transforms the vast amount of information gathered by the business houses into essential information.

6. It provides management with the overall picture of the business operations.

7.  It enables to achieve unique competitive advantage i.e. less time, improved process, improved decision, etc.

2. Identify and list the 20 important KPIs of Balanced Score Card.

The 20 important KPIs of Balanced Score Care are as follows:

1.      Client’s Value

2.      Billing Value

3.      Contribution to profit

4.      Contribution to  revenue

5.      Cost of services delivered

6.      Average bill rate

7.      Consultancy projects managed

8.      Labor multiplier

9.      Billable hours

10.  Percentage chargeable ratio

11.  Certification

12.  Ideas for new services

13.  Percentage attained objective rate

14.  Clients handled

15.  Length of tenure of clients

16.  New client inquires received

17.  Percentage client satisfaction

18.  Percentage customer retention rate

19.  Percentage professional development requirements met

20.  Percentage conversion rate of potential prospects to clients

3. Present your thoughts and understanding on the article “The Strategic Management process”.

The article “Strategic Management Process” starts with an inspiring tale of Ford’s strategic plan named as “The Way Forward” by the Ford’s manager for how to match internal strengths and weakness with external opportunity and threats in order to maintain its competitive advantage. In addition to it the article also looks more deeply on the process of strategic management used and the phases or the steps involved in the strategic management process.

From this article I found out that Strategic management is the process of identifying and executing the organization’s actions into plans and is an enclosure of strategic planning, evaluation and implementation. It also helps to match the compatibility of the company with the demand according to its environment. This article has shown the 7 steps of strategic management which are mentioned below:

Step 1: Defining Current Business

This step of strategic management process precisely defines vision and direction of the business as well as answers what business the firm should be in and the strengths and weakness, threats and weakness of the company.

Step 2: Perform Internal and External Audit

In this stage SWOT analysis is conducted which determines the company’s strengths, weaknesses, opportunities and threats.

Step 3: Formulating New Business and Statements

In this step new vision and mission are generated by analyzing the situation of the business and also determines what and where new business should sell along with the competitor difference.

Step 4: Translate the Mission into Strategic Goals

In this step missions are changed into strategic goals.

Step 5: Formulate Strategies to Achieve Strategic Goals

In this stage clear and concise strategies are made.

Step 6: Implement the Strategy

In this step strategies are converted into action and results. Even management functions are drawn and applied in this stage.

Step 7: Evaluate Performance

This is the last stage which evaluates the performance by implying strategic control.

References:
1. Frank Figge, Tobias Hahn,. (2002). THE SUSTAINABILITY BALANCED SCORECARD – LINKING  SUSTAINABILITY MANAGEMENT TO BUSINESS STRATEGY. Available: http://www.sustainabilitymanagement.net/public/04%20The%20Sustainability%20Balanced%20Scorecard.pdf. Last accessed 14th December 2013.
2. Alfred Sarkissian.. (2011). Advantages and Disadvantages of Balanced Scorecard.. Available: http://smallbusiness.chron.com/advantages-balanced-scorecard-59821.html,.. Last accessed 14th December 2013.
3. Business Balls. (2013). Balanced Scorecard. Available: http://www.businessballs.com/balanced_scorecard.htm. Last accessed 14th December 2013.
4. SmartKPIs. . (2011). SmartKPIs. . Available: http://www.smartkpis.com/blog/2011/02/09/kpis-at-individual-level-grouped-by-balanced-scorecard-perspectives/.. Last accessed 14th December 2013.