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Balanced Business Scorecard

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Choose from performance parameters from BBS posted on the intranet, if applicable. List down all the activities performed by the officer. ... – PowerPoint PPT presentation

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Title: Balanced Business Scorecard


1
Scorecard initiative in BSNL
Implementation of
Balanced Business Scorecard
in BSNL
2
Agenda
  • Generating Scorecards
  • Deciding the performance parameters
  • Type of performance parameters
  • Assigning Weights and targets to performance
    parameters
  • Calculating scores
  • Responsibility Centres Initiatives

3
Generating Scorecards
4
How BBS looks like
5
Scorecard
  • It resembles a grade report / Marksheet
  • Parameter Perspective are like Subjects
  • Shareholders concern
  • Customers concern
  • Internal Business Processes
  • Learning Growth of Organization and Employees
  • Performance parameters are like Questions
  • Weights are like marks assigned to questions
  • Targets are like desirable marks
  • Achievements are your answers to questions
  • Score can be more than the maximum marks(100)

6
PERFORMANCE PARAMETERS
7
Deciding the performance parameters
  • Ideally decided by cause-effect relationship of
    strategy map
  • Example BD cell

ROCE
Cost / Expenses of BD team
Revenues generated by BD cell
Financial Perspective
Cost of equipment quoted to customer
No of turnkey VPN projects
Customer Perspective
Average No of days For commissioning Turnkey
projects
Strategic tie ups with vendors
Internal process Perspective
Training manpower In network management
Training manpower In sales capabilities
Learning Growth Perspective
8
Deciding the performance parameters
9
Deciding the performance parameters
  • Look at companys/circles BBS.
  • Choose from reporting officers Score card, if
    applicable
  • Choose from performance parameters from BBS
    posted on the intranet, if applicable.
  • List down all the activities performed by the
    officer.
  • Choose those which have high priorities or
  • which are contributing in strengthening the
    Companys/Circles performance parameter.
  • See if the activity is measurable.
  • If it is not directly quantifiable or measurable
    then re-define it in a way (or break it into
    sub-activities) that it becomes measurable.
  • Put such quantifiable activities/sub-activities
    which are important in contributing towards the
    companys/ circles score card as Key Performance
    Indicator (KPI) in the BBS.
  • Place the parameters into four different
    perspectives

10
Deciding the performance parameters
  • For example AO (TR)s major job is to issue bill.
    Now it is difficult to quantify this parameter in
    these very terms i.e. Issue bills. So we divide
    this activity into different parts i.e.
  • Bill data processing
  • Bill Printing
  • Post printing processing
  • Bill delivery
  • Bill collection
  • Post collection activities as statement
    preparation, Customer grievance redressal
  • Now we can quantify some of these sub-activities
    based on quality, cost and time. For example
  • a) of bills issued in time (time)
  • b) reduction in total billing cost or per bill
    cost (Cost)
  • c) Reduction in no. of EMC complaints (Quality)
  • RELATE TO COMPANYS SCORE CARD

11
Deciding the Performance parameters
  • The performance parameters chosen for SBUs and
    individuals should be
  • Linked with strategic objectives and vision of
    organization
  • (At any instance the officer should be able to
    identify the direct or indirect link between his
    performance parameters and one or more of the
    performance parameter in companys scorecard)
  • Measurable and are not subjective
  • (e.g. enhance employee skills??, Instead no. of
    staff trained)
  • Oriented towards driving desired behavior /
    performance
  • E.g. for JTO improve fault rate vis-à-vis
    rehabilitate pillar
  • Capable of being benchmarked/ properly reported
  • E.g. reduction in cost of team
  • Unambiguous and easy to understand
  • CCR within the circle

12
Financial Perspective Parameters
  • Financial measures tell the results of actions
    already taken. It is a lag parameter
  • All other perspectives namely Customer, Internal
    process and learning and growth leads to this
    perspective
  • The EFFECT should be ultimately be felt in this
    parameter. Financial performance measures
    Indicate whether the company's strategy,
    implementation, and execution are contributing to
    bottom-line improvement.

13
Financial Perspective Parameters
  • Some of the financial parameters that can be used
    are
  • Return on investment
  • Operating ratio
  • cash flow,
  • quarterly revenue growth,
  • operating income by division
  • Total outstanding revenues
  • Expenditure per route Km
  • Total operating cost of the team
  • Reduction in idle inventory
  • Revenues generated through USO

14
Customer Perspective Parameters
  • Customers' concerns tend to fall into four
    categories
  • Lead times (time required for the company to meet
    its customers' needs)
  • For existing products- from order receipt to
    service delivery
  • For new products from conception to
    commissioning
  • Costs,
  • Quality,
  • Performance and service (product features).
  • This leads to Market Share
  • Customer Acquisition,
  • Customer retention,
  • Customer satisfaction and
  • Customer value creation)

15
Customer Perspective Parameters
  • Therefore some of the customer perspective
    parameters can be
  • Increase in customer numbers (GSM, basic, WLL
    etc.)
  • Tariff or costs per minute of usage
  • No of minutes of usage per customer per month
  • Customer segmentation parameters like No of
    corporate customers added
  • Average performance score of internal customers

16
Internal Process Perspective Parameters
  • measures of what the company must do internally
    to meet its customers' expectations.
  • Some of the internal process parameters can be
  • cycle time (Post sales service) mean fault
    clearance time, mean time for providing new
    services to existing customers like ISD
  • Defect rate fault rate
  • Quality Average downtime for leased circuits,
    of defective bills
  • Efficiency Call completion rate, Collection
    efficiency

17
Learning Growth Perspective Parameters
  • A company's ability to innovate, improve, and
    learn It is the foundation on which other
    perspective rest
  • employee learning (Revenue per Employee, No of
    staff trained),
  • Productivity - (Employees per 1000 lines, staff
    to customer ratio)
  • Employee motivation alignment (Suggestions per
    employee, Implemented suggestion per employee,
    Retention, Satisfaction survey can be thought in
    long run)
  • Empowering Employee to serve customer better (Use
    of IT)
  • launch new products and packages

18
Deciding the performance parameters
  • Create cross functional / down the line linkages,
    wherever applicable. (The internal customer
    concept - recognition of fact that the
    performance of one unit / individual is dependent
    on other)
  • TD circle and territorial circles
  • E.g. Commercial Officer and SDOs
  • DGM (Planning) CAO
  • GM (Development) SSAs
  • Prefer to choose parameters that are currently
    being measured or can be measured without major
    change of procedures
  • E.g. Avoid benchmarking against customer
    satisfaction until process to measure the same is
    in place

19
Deciding the performance parameters
  • Prioritize Try and restrict the no. of
    parameters in a scorecard to ten or so. This
    increases focus.
  • Setup middle-level integrated management
    teams/committees esp. for internal process and
    customer perspectives parameters

20
TYPE OF PARAMETERS
21
Type of performance parameters
  • This is derived from the cause effect
    relationship
  • Positive
  • A positive performance parameter is one where an
    increase is desirable (for e.g. number of
    customers, market share etc.)
  • Negative
  • A negative performance parameter is one where a
    decrease is desirable (for e.g. fault rate,
    staff-per-thousand lines, etc.)

22
ASSIGNING WEIGHTS
23
Assigning weights
  • Weights decide the balance of four perspective.
    In general the weights have been kept as follows
  • Down the line the emphasis on Customer
    perspective and Internal process should be more
  • Critical parameters should have more weights
  • E.g. No. GSM connections provided 16

24
Assigning weights
  • Different units may like to differentiate on
    emphasis that is to be given to different
    parameters
  • E.g. In some units fault rate target may already
    be achieved and may want to emphasize on CCR
  • Those parameters that find direct mention in
    Company or circle scorecard should have more
    weight
  • E.g. For DGM (WLL) more weight on no. of WLL
    customers added

25
FINALIZING TARGETS
26
Finalizing the targets
  • Targets should be challenging at the same time
    realistic
  • Last three years achievements should be taken
    into consideration if possible (for this year)
  • A better approach is to keep increase and
    decrease over last year as targets and parameters
    should be defined accordingly
  • Targets for different units for the same
    parameter may be different depending on the
    current status of achieved values
  • E.g. CCR, fault rate

27
Finalizing the targets
  • While fixing targets one should try to benchmark
    with his past achievements, other units/officers
    achievements and the telecom industrys best
    practice achievements
  • E.g. Airtels norms for fault rectification are 4
    hours and 2 hours
  • Change in targets should be an exception rather
    than a rule

28
REPORTING ACHIEVEMENTS
29
Reporting Achievements
  • While finalizing the performance indicators it
    should also be kept in mind how the achievements
    will be reported.
  • Reporting of achievements should be on monthly
    basis, review can be monthly or quarterly. At CO
    we have fixed quarterly review
  • During the course one should ensure that such
    processes and methods are put in place that helps
    in true and timely reporting of achievements.
  • BBS should drive the use of Information
    Technology in the company. IT should aim at
    monitoring and measuring the key performance
    parameters. (e.g. financial parameters)

30
CALCULATING SCORES
31
Calculating scores
  • Calculate Proportionate Achievement (B) for each
    parameter
  • B A/T if Type of performance parameter P
    Positive or
  • B T/A if Type of performance parameter P
    Negative
  • Where T is the target value and
  • A is the achieved value
  • Calculate the final Score for each parameter
  • Score B W 100
  • Where W is the weight assigned to particular
    parameter and
  • B is calculated as above
  • Calculate the total score as sum of all
    individual parameters scores

32
Add column on responsibility and Initiatives
33
Responsibility centres and Initiatives
  • Parameters can be achieved only if group of
    individual work as team to achieve them
  • Responsibility centers is team of officers
    related to particular parameter chaired by GM/DGM
    concerned for providing the targets
  • E.g. ITC cards sold (Budget, Marketing, BB)
  • They should jointly review achievements
    periodically
  • Responsibility centers should have common
    parameters as far as possible
  • E.g. Planning, MM IFA (for equipment
    procurement)
  • Responsibility centre should suggest
    initiatives

34
Responsibility centres and Initiatives
  • Initiatives are suggested measures to achieve a
    particular parameter target
  • Initiative
  • Should not be a laundry list
  • Should be separately documented for each
    individual parameters
  • Initiative example For parameter Increase in
    ITC sale
  • Increase product availability esp. in rural areas
  • Make tariff more attractive
  • Increase franchise commission
  • Bundle with other products
  • Decrease customers procurement time
  • Initiatives serve as feedback to higher office

35
Other important issues
  • Consultative Participative approach to be
    adopted
  • Different posts have different job definitions
    and therefore BBS can be different for same
    designations
  • It is a change management exercise which requires
    effective and frequent communication down the
    line. Circles should have communication plan like
  • DOs from CGMs/SBU heads
  • Holding of Workshops/Seminars at RTTC level
  • Discussions/postings on Intranet
  • Frequent review meetings / feedback reports on
    implementation

36
Thank You
37
Suggested Management Readings
1. Balanced Business Scorecard by Robert Kaplan
and David P. Norton. 2. Strategy Maps by Robert
Kaplan and David P. Norton. 3. Good to Great by
Jim Collins. 4. Build to Last by Jim Collins and
Jerry I. Porras. 5. Trust in Balance Building
successful Organizations on Results,
Integrity and Concern by Robert Shaw. 6. Jack
Welch and the GE Way by Robert Slater.
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