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Balanced Scorecard Implementation

Balanced Scorecard Implementation Steps:

     Step-1: Understand corporate vision, mission and objectives 
     Step-2: Document core processes for each department.
     Step-3: Align cascading department core processes with corporate objectives
     Step-4: Create scorecard measures for each department. 
     Step-5: Create measures to monitor and measure scorecard achievement for each department.
     Step-6: Create scorecard achievement report for each department and submit to executive management.

         Balanced Scorecard Implementation By Example:

Let’s take an example of a company that sells PC’s online and see how to implement balanced scorecard.

Let’s assume the vision and objectives of the company are to:

    Increase PC sales by 10% every year
    Increase profitability margins
    Increase customer satisfaction.

To better understand, let’s categorize the above corporate objectives as balanced scorecard perspectives of financial, customer, internal process and learning & growth.

Financial: Increase its sales by 20% every year.

Customer: Increase customer satisfaction.

Internal Process: Practice KAIZEN and improve processes to reduce cost.

Learning & Growth: Train customer service reps to ensure the best support for customers and retain top performers.

Now let’s look how IT department can implement their scorecards based on corporate objectives.
Note: The same principles can be used by all departments to implement their scorecards.

Step-1: Identify key process of IT Dept.

    IT Governance Processes (Portfolio Management, Project Management)
    IT Application Processes (Application Development, Support)
   IT Operations Processes (Data Center, Operations )

            Step-2:Align IT department core processes with corporate objectives

             Financial :


Corporate Objectives
IT Core Processes FINANCIAL Increase Sales Increase Margins
IT Governance Processes N/A Use framework like VAL IT to manage IT investment portfolio and increase ROI
IT Application Processes Develop E-Commerce applications with easy UI and good response times for users to buy PC's N/A
IT Support Processes N/A N/A

  Customer:


Corporate Objectives
IT Core Processes Customer Increase Customer Base Increase Customer Satisfaction
IT Governance Processes N/A N/A
IT Application Processes Use SEO to ensure our corporate website(s) are in the first page when user search for PC's Ensure applications are available 24/7 to ensure zero downtime for customers
IT Support Processes N/A Ensure infrastructure is available 24/7 to ensure zero downtime for customers

              Internal Processes:

 

Corporate Objectives
IT Core Processes Internal Processes Practice KAIZEN Reduce Costs
IT Governance Processes Use governance frameworks to better align IT with business Better portfolio management system can help approve projects with increased ROI
IT Application Processes N/A Using open source tools (when applicable)
IT Support Processes N/A N/A


Learning & Growth:
 

Corporate Objectives
IT Core Processes Learning & Growth Training Retain Top Talent
IT Governance Processes Ensure performance management capture of employees Ensure compensation based pay hikes or bonuses
IT Application Processes Ensure training for employees N/A
IT Support Processes Ensure escalation rules in case of support issues N/A


Step-3:CreateIT department balanced scorecard analyzing current state, expected state,
            Plan to achieve the goals, responsibility and expected date of completion.

BSC Perspective Objective Current State Expected State Improvement Plan Responsibility Expected Date Of Completion
Financial






Use framework like VAL IT to manage IT investment portfolio and increase ROI





Develop E-Commerce applications with easy UI and good response times for users to buy PC's




Customer






Use SEO to ensure our corporate website(s) are in the first page when user search for PC's





Ensure applications and infrastructure are available 24/7 to ensure zero downtime for customers




Internal Process






Use governance frameworks to better align IT with business





Better portfolio management system can help approve projects with increased ROI





Using open source tools (when applicable)




Learning & Growth






Ensure performance management capture of employees





Ensure compensation based pay hikes or bonuses





Ensure escalation rules in case of support issues






Finally ensure the balanced scorecard is continuously measured, monitored and updated to ensure alignment with corporate objectives a BSC report is created and reported to executive management.

Copyright © Technology Governance Solutions LLC. All rights reserved.

Please refer to the other articles from www.governancetraining.com to understand IT governance and advance your career by appropriate governance certifications
Also visit
www.investize.com to view Project Portfolio Management tool from Technology Governance Solutions.

 

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