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.

 

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