BALANCED SCORCARD

OLEH
DR. YURNIWATI,SE.,M.SI.,AK.,CA
ACCOUNTING DEPARTEMENT Room; 2212
ANDALAS UNIVERSITY
The Balanced Scorecard provides a framework
to look at strategy from four different
perspectives; Financial, Customer, Internal
Business Processes, and Learning and Growth. 

It gives managers the accurate information to

make important decisions that effect everyone
in the company.
 Four Perspectives (Pillars)
on which organizational success is based
Financial perspective How should we appear to our
shareholders to succeed
financially?
Customer perspective: How should we appear to our
customer to achieve our vision?

Internal business processes In which business processes

perspective: should we excel to satisfy our
shareholders and customers?
Learning-and-growth How do we sustain our ability to
perspective: change and improve?
 The Basic Premise of These
Four Perspectives
Investment in learning and growth will give rise to
improved internal business processes.

Better internal business processes ensure more

satisfied customers who in turn enable an
organization to become more profitable and
financially secure.
 Perspective Generic Measurements

Financial Return of Capital Employed, Economic value added, Sales

growth, Cash flow
Customer Customer satisfaction, retention, acquisition, profitability,
market share
Internal business Includes measurements along the internal value chain for:
process
Innovation - measures of how well the company identifies the
customers’ future needs.
Operations - measures of quality, cycle time, and costs.
Post sales service - measures for warranty, repair and
treatment of defects and returns.
Learning and growth Includes measurements for:
People - employee retention, training, skills, morale.
Systems - measure of availability of critical real time
information needed for front line employees.
GENERIC SCORECARD
 Perspectives Goals Objectives Measurements

Customer Continuously Decrease lead time.* Average lead time.*

improve customer Increase on time delivery. Percentage of deliveries on
satisfaction. time.
Reduce customer Number of customer
complaints. complaints.
Internal Continuously Decrease cycle time** Average cycle time.**
Business improve business Increase quality. Number of defects and number
processes. of items reworked.
Increase productivity. Average output per employee.

Innovation & Continuously Increase sales of new Percentage of sales obtained

Learning develop and deliver products and services from new products & services.
new innovative
Reduce development time. Average time from initial design
products & services.
to production.
Financial Continuously Decrease costs. Average unit costs.
improve financial Increase sales growth Growth rate in sales.
performance. Increase market share Company's market share.

Increase return on Return on investment.

investment.
 Strategy-Focused Organization

The Balanced Scorecard allows

organizations to build a
management system that manages
strategy
 Strategy-Focused Organization

Strategy means communicating in a way that

everyone can understand a plan for success.

Focused means navigation in the organization

to align strategy

Organization means to mobilize all employees

to act in different ways that will link together
across the business
 Five Principles of
a Strategy-Focused Organization

1. Translate the strategy to operational terms  

2. Align the organizational strategy,
3. Make strategy everyone’s everyday job
4. Make strategy a continual process, and
5. Mobilize through executive leadership. 
 
 Strategy Maps
A strategy map as "a logical comprehensive architecture for
describing strategy.

Strategy map is a tool for translating strategy into operational.

It provides the foundation for designing a Balanced Scorecard

that is the cornerstone of a strategic management system."

Strategy maps, combined with balanced scorecards, provide a

new framework for describing and implementing strategy.