BALANCE SCORECARD REVIEW

HARY SATRIA. N

November 18, 2019

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Agenda

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 DEFINITION

Drs. Robert Kaplan

1990
David Norton

BALANCE SCORECARD

Balance between:
• Financial performance and
Non financial
• Short and Long Term Plan
• Internal dan External
To record and design the
score that someone wants to
realize

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What is Balance Scorecard and Why it’s Important
BSC is a management system mechanism which
able to translate the organization vision and
strategy into real action on the field. BSC is one of
the management tools which proven to help lots of
company in order to implement their business
strategy
WHAT
BSC consist of: Financial Perspective, Customer
Perspective, Internal Business Process
Perspective, Learning and Growth Perspective
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WHY
1. BSC is able to tie the company long-term
strategy into a short-term set of goals with
“what if” method if there is a sudden change
with their long term plan;
2. BSC is able to manage diverse company units
and ensure that every department sees and
understands clear linkages between its own
strategy and the strategy of the organizations
as a whole;
3. BSC is able to act as the basic framework for
every department and allows employees to
see the clear connection between their
departmental approaches and organizational
approaches and put them into context
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COMPARISON Every organization needs to evaluate their performance and here are
the comparison between Traditional management strategy and
Balance scorecard as performance measurement tools

Traditional Management Strategy Balance Score Card

Measure the organization performance
only from financial perspective
Emphasize the measurement only on
tangible things
Inconsistent, weak predictive for the
business environment nowadays
Resulting in the emergence of Functional
Silos, and prevent long-term thinking
Not only emphasizes on tangible things
only but also intangible perspectives
such as consumer and employee
satisfaction
Has comprehensive (detail), coherent
(sebab akibat), balance, and measured
(Mulyadi, 2001, p.18)
Able to connect small vision into bigger
vision
 THE PERSPECTIVES

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 FINANCIAL
PERSPECTIVE
Financial perspective is an
important factor because all
perspectives depends on the
financial measurement which
shows the implementation of
planned strategy and push
the others to achieve the
target
1. Increase of customer
Traditional satisfaction
Management Strategy 2. The increase of employees
ROI (Return on productivity and commitment
Investment) and Net 3. The increase of organization
Profit capability to create more profit
by reducing the production cost
or investment
BSC
Resulting the increase of
organization revenue
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FINANCIAL PERSPECTIVE INVOLVEMENT AND ROLE
Financial perspectives involved in three business cycle of a company and
those involvement played significant role on the business
Three Steps of Business Cycle
1. Growth  Development of
product and resources
2. Sustain  Invest more or pull
the investment
3. Harvest  increase the profit
and reduce the production cost
Has different financial objectives
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Financial Perspective
Significant Role
1. Other perspectives depends
on the financial
measurement that shows
implementation from planned
strategy
2. To push other perspectives
about target to be achieved
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 The Company has to
define their market
segmentation

Customer perspective related to how Define measurement

the company serve the customer. In
CUSTOMER this case, every customer has to be
tools to identify their
financial target
PERSPERCTIVES treated the same way and properly.

Develop high quality

product that goes beyond
customer expectation
 TWO MEASUREMENT GROUP

Core Measurement Group:

Customer Value Proposition:
To measure how the company fulfill the
customer needs to achieve targeted
To measure the market value they control
satisfaction, sustain, achieve, seize
and the potential market they might enter
market share

Benchmark
a. Product or service attributes (Function,
Customer Price, and Product Quality;
Profitability
Customer b. Relationship with Customer ( distribution,
Satisfaction
Customer response, delivery time, and how they
Retention
Customer
Acquisition
feel;
Market c. Image and reputation which represent
Share
intangible factor for the company to
attract customers
 Internal Business Process Perspectives is a Critical process that enables
business unit to offer interesting value proposition to retain customer
and fulfill the stakeholder expectation

Tambahin why important

INTERNAL INNOVATION
BUSINESS 1. Identify customer demands  satisfy what customer wants
2. Product design process  should align with what customer
PROCESS wants and develop high quality product

PERSPECTIVES OPERATION PROCESS

the process of activities from where the company receive the
orders from consumers until they deliver the goods on time and
efficiently. This process is based on fact

AFTER SALES SERVICE

The service that the company offer to the customer such as
guarantee or the replacement of broken product
 Long Term Business
Internal
Financial Customer
Process

Growth and Learning

CAPABILITY
GAP
Invest on
Infrastructure

GROWTH AND
LEARNING Human
Resource
System Procedure

PERSPECTIVES
 Capability Principals

System Information Capability

Employee Capability The Benchmark

level of information availability,

Things to Capabilities to The outcome accuracy, how long to get the
measure, maintain the from the increase information needed
employee employee in of skills, moral,
involvement in innovation,
the company.
Employee Retention

Employee Productivity
Employee Satisfaction

decision making, internal process,

recognition Resign means
and customer
access to get loss on Organization Climate
satisfaction.
information, intellectual
support to think capital. Support motivation and
creatively, Measured Are they empowerment in order to create
initiative from from the improved and initiative employee.
their superior turnover rate able to handle
more task or not The Benchmark
The amount of suggestion