Balanced Scorecard
Until recently, most of the studies for performance management were done in the field of human resources performance assessment and improvement. Today’s practices however, focuses increasingly on management system and aims for developing monitoring and control systems on strategic fields which would improve organizational performance. Although several different methods have been developed, Balanced Scorecard, which has found an extensive field of application including many companies within Turkey, collects a number of methods under the same roof.
We Turn Strategy into Action!
In the early 90’s a new strategic management approach was brought forward by Robert Kaplan and David Norton. In contrast to the weakness and narrow scope of previous management approaches, balanced scorecard pointed out which other aspects should be considered in order to balance the financial results which is used by most of the organizations. Balanced scorecard, is not only a measurement system. It is rather a management system that enables organizations to define their vision and strategies clearly and turn these into actions at operational level. It provides information about business process and output of these processes constantly for continuous improvement of performance and results.
Kaplan and Norton defines balanced scorecard concept as follows in their academic research.
“Balanced scorecard takes financial performance indicators in consideration. But financial indicators are about past and adequate for industry age companies in which customer relations and long term capabilities are not important. Even though, these financial indicators can be guiding for information age companies, it is not adequate for these companies anymore which invests in and creates value by taking customers, suppliers, employees, business processes, technology and innovation into center of interest area.”
Balanced scorecard evaluates the organization in four main perspectives given below and suggests identification, data collection and analysis of metrics in these four perspectives by making cause-effect relation between each other.
- Continuous Learning and Development Perspective
- Internal Business Process Perspective
- Customer Perspective
- Financial Perspective
Strategic Planning
It is not something new that organizations need to do planning for realizing their visions. Along with that, the ongoing change in today’s world makes it necessary to make this planning in organizational aspect considering the environmental factors too. In this sense, strategic planning can be defined as: “All of the effort made for planning and execution of the plan in the fields that is required for realization of visions within the organization.”
Vision is the starting point in the strategic plan. Strategic planning is actually a study done backwards. In other words, strategies which will be implemented are decided starting form vision. Main fields related to strategic planning are Marketing, Sales, Human Resources, IT Systems and Use of Technology etc. Each of these main fields include more than one study topics. For example Human Resources strategic field covers Training Planning and Workforce Planning.
The first step of strategic planning is to do Current State Analysis (CSA). The study is done by various research, analysis and assessment of the current state of the organization and by employing workshops.
The second step of strategic planning is definition of "vision" which is the starting point of planning. Here what is meant by Vision is formulation of core strategies in a detailed form. What is written in web sites of companies with one or two sentences as Vision can only be described as a very short summary of Vision. The reason for that is not reveal the decisions which will determine company’s future to the competitors.
On the other hand, another subject which should be investigated under the strategic planning topic is budgeting. Although there are several budgets defined for different topics, the budget which should be focused on is spending budget. It is expected for the spending budget to comply with plan. So, not only the money that will be spend but also other tasks which will be done should be monitored within this budget. In this sense, it is required to consider this study as an interactive planning subject which adapts to changing strategies dynamically in contrast to the classical spending budgets. Thus, periodic budget monitoring system have a strategic dynamic structure.
One of focusing points of strategic planning and budgeting studies is management of resource consumption. In today’s business world it is only possible to do that by effective use of IT systems.
The progress of strategic plan is monitored by performance management systems. Even though several different techniques exists, almost all methods focus on is Key Performance Indicators (KPI). Key performance indicators are measures each are associated with the strategy. These measures eases the performance review efforts and enables all the actions to focus on strategic plan’s priorities. In this manner, emersion of new performance improvement projects on areas with inadequate performance will be automated.
One of the most important factors that will enable the success of strategic planning efforts is effective management of improvement projects which will guarantee the future performance of the organization.
Corporate Performance Management
Until recently most of the studies done under the name of "performance management" was intended for human resources performance assessment and improvement. Today's practices however, being increasingly focused on management system, aims at developing, monitoring and control systems which will increase the overall performance of the organization.
Our fields of work,
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Balanced Scorecard
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Business Process Performance Management
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Corporate Performance Management and Pay Systems
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Performance Reporting and Monitoring
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Performance Improvement Practices
