2010

PROJECT SUBMITTED BY

ALKA SINGH

SHASHI BALA

MONIKA PRATAP SINGH

ANURADHA MATHURIA

JAYOTI VIDYA PEETH WOMEN’S

UNIVERSITY

9/27/2010

BALANCE SCORE CARD

WHAT IS A BALANCE SCORECARD?The Balance score card is a strategic planning and management system that is used extensively in business and industry government and nonprofit organization worldwide align business activities to the vision and strategy and external communication and monitor organization against strategic goals.

At the highest level, the Balanced Scorecard is a framework that helps organizations translates strategy into operational objectives that drive both behavior and performance.

Balance score card is a comprehensive performance measurement tool that reflects all the measures critical for the success of the firm’s strategy.

It’s a performance report based on a broad set of both financial and non financial measures.

Customer value creation in turn drives financial performance and profitability.

THE BALANCE SCORE CARD

What is it? Balance financial and non –financial measures. Balance short and long –term measure. Balance performance drivers (leading indicators) with outcome

measures (lagging indicators). Should contain just enough data to give a complete picture of

organizational performance. Leads to strategic focus and organizational alignment.

Why do it? To achieve strategic objectives.

To provide quality with fewer resources.

To eliminate non value added efforts.

To continually improve.

To increase accountability.

HISTORYIt was originated by Dr. Robert Kaplan (Harvard business school) and Dr. David Norton in 1992 as a performance measurement platform that added strategic non- financial performance measure to traditional financial metrics to give managers a more balanced view of organizational performance.

BSC IS A MEASUREMENT TOOL It allows the organization to assess progress in implementing

strategy. It allows the organization to benchmark its progress against

great practices outside and inside the organization, and over time.

It provides a diagnostic framework for tracking relationships and impact among strategies.

BSC IS A COMMUNICATION TOOL It allows an organization to articulate its chain of value creation

within the organization and to the world at large. It provides a platform for planning and communication of

planning activities.

EXAMPLE OF A COMPANY’S BSC

BSC IS A STRATEGIC MANAGEMENT TOOL

It allows an organization to see all of the drivers of organizational value and performance in a holistic conceptual framework.

It creates a pathway for the creation and implementation of strategy and measurement of progress that is fully aligned throughout the organization.

IMPORTANCE Gives competitive advantage to the organization. Improve organizational performance. Performance is documented. Improves communication of the organization vision and

strategies.

ADVANTAGES OF BALANCED SCORE CARD

It translates vision and strategy into action. It defines the strategic linkages to integrate performance across

organizations. It communication the objective and measures to a business unit. It aligns the strategic initiatives in order to attain the long-term

goals. It aligns everyone within an organization so that all employees

understand how they support the strategy. It provides a basis for compensation for performance. The scorecard provides a feedback to the senior management if

the strategy is working. Focusing the whole organization on the few key things needed

to create breakthrough performance. Helps to integrate various corporate programs. Such as: quality,

re-engineering, and customer service initiatives. Breaking down strategic measures toward lower levels, so that

unit managers, operators, and employees can see what’s required at their level to achieve excellent overall performance.

A means for implementing strategy by drawing managers’ attention to strategically relevant critical success factors, and rewarding them for achievement of these factors.

A fair and objective basis for firms to use determining each manager’s compensation and advancement.

LIMITATIONS No financial information is subject to the reliability of the source

and processes used. Some information is required to the handled confidentially. Require timely appropriate reporting of some elements of the

scorecard. It is not easy to implement this tool because it involves a lot of

subjectivity. The tool is much more complex compared to the other tools. The measures that need to be taken are contingent upon the

kind of environment, industry and the business the organization. A lot of refinement still required to be done so that it becomes

understandable to every stakeholder.

PANTALOON RETAIL INDIA LIMITED

KISHORE BIYANI CEO AND MD.

ABOUT THE COMPANY Found in 1987, ranked amongst top five retail companies in

INDIA. Subsidiary of the future group. Has over 1000 stores across 71 cities in India and employs over

30,000 people. Pantaloon retail was recently awarded the international retailer

of the year 2008. Emerging market retailer of the year 2008 at the world congress. First Retail Company to implement BSC in INDIA.

In 2009 big bazaar opened its 100th store in Siliguri, west Bengal, marking the fastest ever organic expansion of a hypermarket. The first set of big bazaar stores opened in 2001 in Kolkata, Hyderabad and Bangalore.

ROAD MAP OF THE COMPANY FOR BALANCE SCORE CARD:

The road to developing the balanced score card at pantaloon began with keeping in mind the vision of the company. That to achieve sales of Rs.1000 core and PBDIT of per cent by the year 2005. And with this vision in mind, the four parameters – financials, customer service, internal processes and learning and growth – was incorporated, which would be applicable to the people in the corporate boardroom at pantaloon to employees at the head quarters and the stores. So for the employees to be rewarded, he or she will have to match up to the target set in each of the four parameters. The flow begins with corporate score card as it was imperative for the top brasses to be excited and convinced about it before it percolates to the next level. Form thereon, it flows to individual departments. Departments like category management, operations, human resources, information technology and accounts…The effects of the company through balance score card are show in next through the picture:-

CUSTOMER PERSPECTIVE Customer retunes and complaints. Customer satisfaction surveys. Delivery time of the apparels. Coverage and strength of distribution channel.

INTERNAL BUSINESS PROCESS Number of defects, amount of rework, number of returns. Total cycle time, machine efficiency. Number of accidents. Severity of the accidents.

LEARNING & GROWTH Number of new apparel designs. R & D output success rate. Number of training hours. Employee turnover, number of complaints. Employee satisfaction and retention.

SUMMARYBalance score card is a tool which tells us the knowledge skills and systems that employees will need (learning and growth) to innovate build and adopt the right strategic capabilities and efficiencies (internal process) that delivers desired value to the market (customer) which will eventually lead to the accumulation of shareholder value (financial).