Title: Balanced Business Scorecard
1Scorecard initiative in BSNL
Implementation of
Balanced Business Scorecard
in BSNL
2Agenda
- Generating Scorecards
- Deciding the performance parameters
- Type of performance parameters
- Assigning Weights and targets to performance
parameters - Calculating scores
- Responsibility Centres Initiatives
3Generating Scorecards
4How BBS looks like
5Scorecard
- 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
7Deciding 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
8Deciding the performance parameters
9Deciding 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
10Deciding 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
11Deciding 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-Ã -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
12Financial 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.
13Financial 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
14Customer 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)
15Customer 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
16Internal 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
17Learning 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
18Deciding 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
19Deciding 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
21Type 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
23Assigning 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
24Assigning 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
26Finalizing 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
27Finalizing 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
29Reporting 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
31Calculating 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
32Add column on responsibility and Initiatives
33Responsibility 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
34Responsibility 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
35Other 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
36Thank You
37Suggested 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.