This action might not be possible to undo. Are you sure you want to continue?
1. 2. 3. 4. 5. 6. 7. 8. Sneha Sharma Debasmita Lahiri Debojyoti Chowdhary Abhishek Gupta Kawsik Roy Monodip Sen Samipan Das Chandranath Chatterjee
THE BALANCED SCORE CARD
Developed by Harvard Professors Robert Kaplan and David Norton in early nineties The logic of BS is that learning and people management help organizations improve their internal processes (product development, service etc.) which are critical for creating customer satisfaction and loyalty Customer value creation in performance and profitability turn drives financial
BS enables to translate broad corporate goals into divisional, departmental and team goals in a cascading fashion which helps an individual to see clearly how his performance ties with overall performance of the firm.
WHAT IS A BALANCE SCORECARD
Balanced scorecard 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.
It is a crucial part of the firm’s effort to better understand and to implement its strategy.
STRATEGY MAP LINKS BSC
It is a one-page graphical representation of what we must do well in each of the four perspectives in order to successfully execute our strategy “What we must do well” is answered in the form of objectives in a strategy map A few strategic objectives within each of the perspectives are selected, and then the cause-effect chain among these objectives are defined by drawing links between them. The whole idea is represented in a compelling way so that it is easily understood and embraced by all employees.
USES OF BALANCED SCORE CARD
Translating the vision into operational goals. Communicating the vision and link it to individual performance Business planning. Feedback, learning and adjusting the strategy accordingly.
Advantages of Balanced Score Card
It translates vision and strategy into action. It defines the strategic linkages to integrate performance across organizations. It communicates the objectives 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. o 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 towards 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 framework firms can use to achieve a desired organizational change in strategy, by drawing attention to and rewarding achievement on factors that are part of a new strategy.
A fair and objective basis for firms to use in determining each manager’s compensation and advancement A framework that coordinates efforts within the firm to achieve critical success factors. BSC enables managers to see how their activity contributes to the success of others.
Nonfinancial information is subject to the reliability of the source and processes used Some information are required to be 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 is contingent upon the kind of environment, industry and the business the organization is in. A lot of refinement is still required to be done so that it becomes understandable to every stakeholder associated with the organization.
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 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 2007
ABOUT THE COMPANY (CONTD.)
Emerging Market Retailer of the Year 2007 at the World Retail Congress
First Retail company to implement BSC in INDIA In 2008, 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 crore and PBDIT of 11 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 targets set in each of the four parameters. The flow begins with the 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. From 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 shown in next slide through the picture:---
“THE EFFECT OF BALANCE SCORECARD”
Customer returns 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
Sales growth PAT growth ROI EPS
FINANCIAL PERSPECTIVE (CONTD.)
Pantaloon Net Sales Growth (%) FY 2005 65.51 FY 2006 80.81 FY 2007 73.06 FY 2008 56.06
PAT Growth (%) ROCE (%) D/E Total Assets Turnover
94.89 14.63 2.49 2.14
66.43 12.00 1.31 1.74
87.01 7.75 1.14 1.42
5.85 10.17 1.19 1.31