Finance & Facilities
Metrics & Reporting
Instructors: LuAnn Stokke, Vincent Lau
The Balanced Scorecard (BSC) is an important tool that aligns business activities, improves communications, and measures
organization performance against strategic goals. Attendees can expect to gain a good understanding of BSC principles and
how BSC theory relates to real
-
life application in F2.
This course will provide definitions and help demystify the relationshi
p
among operation, strategy, dashboard, scorecard, strategy maps, initiatives, values, mission, vision, and other terms.
Background and Quality Improvement Infrastructure
What is Balanced Scorecard?
Vision to Operation
Operational Dashboards
Exercise 1
BREAK
Strategy Map, Objectives & Initiatives
Strategic Scorecards
Exercise 2
Targets & Benchmarks
Welcome
What have you heard? What would you like
to know more about?
-
LEAN, QI, PI, PDCA, Deming, Strategy Map, BSC, Dashboard, Scorecards,
Kaizen, Strategic Objectives, Initiatives, etc.
Efficient
Processes
Strategic Plans
Quality Improvement System
Trained Staff
Recognition
Data Analysis
Customer Focus
Empowered Staff
Problem Solving
Teamwork Quality Processes Measurement Systems
Vision
Delighted
Customers
Leaders Staff
Trustworthy Trustworthy
Trusting of Others Trusting of Others
Approachable, Inspiring Collaborative, Committed
What are the goals?
1. Customer Focus
2. Continuous Improvement
3. Quality Definition
4. Work Process Focus
5. Prevention
6. Error
-
Free Attitude
7. Manage by Facts
8. Participation / Empowerment
9. Total Involvement
How is it done?
Who does it?
More than a performance measurement tool:
Helps organizations effectively execute strategy.
Articulates strategy in actionable terms.
Serves as a roadmap for strategy execution.
Mobilizes and aligns leaders and staff to make strategy
a continuous process.
Illustrates cause
-
and
-
effect relationships between
actions and outcomes.
FS
CPO
FM
Treasury
Group
University
Audit
F2 Admin
Top down
Management
tool
Bottom up
Bottom up
Top down
Top down
Custome
r
focused
Different organizations have different journeys. There is no right or wrong way to
implement continuous
improvement
.
BSC
QI
LEAN
Vision
Mission
Strategy
Operation
Ideal State. A lofty dream.
A common goal / future for
the entire organization.
What does the
organization
do
?
What type of business?
Often
interchangeably used
as
Vision
Major
Goals
& Performance
Objectives to achieve the
Mission & Vision
Specific actions to
achieve
work
-
level targets aligned
with strategic goals.
Description
One day
in the
future
Not yet clearly
attainable
?
5
–
10
years
3
–
5 years
Present
–
1 year
Timeframe
An ideal
world
40,000 ft
point of view
20,000 ft
point of view
Strategic
Scorecard
Ground level
point of view
Operational
Dashboard
Also Known As
UW President
Board of Regents
Executives
Government
SVP / AVPs
Controller
Executives
Leaders
Leaders
Managers
Supervisors
Staff
Managers
Supervisors
Staff
Owners
(
F2
perspective)
Conceptual
Factual
Is it real?
Vision
Mission
Strategy
Operation
“I
have a dream that all men will be judged
by the merit of their character,
not
by the
color of their skin
.”
Eliminate racial injustice in American
society
•
Establish national
-
public attention to racial
injustice
•
Educate people
about racial injustice
•
Governments establish civil rights for all citizens
•
Speak
at public
events
•
March
alongside civil
-
rights
activists
•
Engage politicians at events
•
Object to and stand
-
up against racial injustice
Rev. Dr. Martin Luther King
Dr. King’s vision/mission of equality
is achievable with successful
Strategy & Operations.
We all play a role/influence the
success of an organization.
Successful Strategy is how to achieve
Vision & Mission.
Successful Operation helps achieve
Strategy (Strategic Objectives).
Values
Utilize a passive/non
-
violent approach
Why we
exist
What’s
important to
us
What we want to
be
Our game plan
Translate, Focus and Align
What are the priorities?
What we must improve?
What do I need to do?
Vision / Mission /
Values
Strategy
Operations / Tactics
VISION / MISSION
Set Direction
STRATEGY
Systems; Cross
-
functional
OPERATION
Execution/Feedback
Work
Teams /
Measure
Analysts
Leaders
Directors
Supervisors
Coordinators
STEAM
Executives
We all Play a Role
FS
CPO
FM
Treasury
Group
University
Audit
F2
Admin
Maintain
grounds
Clean
buildings
Service
vehicles
Project
-
manage new
construction
Manage or
monitor
design/con
-
struction
vendors
Pay staff on
time
Manage
research
budgets
Deliver mail
Steward
Endowment
Lease
buildings and
space
Mitigate risk
Monitor
regulatory
compliance
Conduct
audits
Deliver
F2
-
wide training
Oversee
LEAN
implementa
-
tion
INPUT
Value
Added Tasks
OUTPUT
Financial
20% of measures
Customer
(esp. important for Non
-
Profit
)
20% of measures
Internal
Process
40% of measures
Learning &
Growth
20% of measures
A fully functioning Dashboard may consist of 20
-
25 measures, with a
larger portion in Internal Process
According to Kaplan & Norton, long
-
term success is
best gauged via a
BALANCED
perspective.
For example, financial statements will not display intangible assets:
cycle
-
time, knowledge management,
staff capability, customer
satisfaction, etc
.
CUSTOMER
PROCESS/THEME MEASURE (Strategy Map Objective) ACTUAL TARGET
GAP
FINANCIAL
PROCESS/THEME MEASURE (Strategy Map Objective) ACTUAL TARGET
GAP
Instill
Customer
Confidence
1
Percent of Financial Aid Disbursed Within
1
st
Week of Academic Quarter (C1,
annual)
84%
85%
-
1%
Control Costs
14 Utilities Cost Avoidance, Seattle Campus
(R1, annual)
$9.89M
$
8.78M
No gap
Manage Business
Growth
2 Number of Business Days to Set up New
Budgets (C1,
monthly)
21
days
12
days
-
9
days
Control Costs
15 Cost of (Leased) Space per Sq. Ft. (R2,
quarterly)
$32.44
$33.15
No gap
Manage Business
Growth
3 Transportation
Modes to and from
Campus
-
Environmentally
friendly
transportation
(C2, annual). Reduce
drive
alone.
22%
2008
20%?
-
2%
Control
Costs
16
U.S. Postal Service Postage Cost
Avoidance (R1, quarterly)
9.8%
8.5%
No gap
Synthesize
Information
and Inform Campus
4 Customer perception: “FS employees
effectively communicate with me,“ 2009
Customer Survey (C3, biennial)
70%
72%
-
2%
Control Costs
17
Cost
-
per
-
Paycheck (R1,
annual
)
$1.00
$2.25
No gap
Monitor
Client
Satisfaction
5 CPO Client Advisory Committee
Quarterly
Survey Results (C1, quarterly)
HOLD FOR CUST. SURVEY
3.31
Jul2009
3.5
-
0.19
Control Costs
18
eCommerce Utilization Rate (R3,
monthly)
79%
100%
-
21%
Monitor Client
Satisfaction
6 Student Overall Satisfaction with SFS
Services (C3, annual)
80%
64%
No gap
Control Costs
19
Custodial Services
--
Cost Comparison
per GSF (R2, annual)
$1.29
$1.41
No gap
INTERNAL BUSINESS
PROCESS
PROCESS/THEME MEASURE (Strategy Map Objective) ACTUAL TARGET
GAP
Manage Operational &
Business
Risk
20 DRAFT: Risk Management
—
Cost of Risk
(R3, quarterly)
$ 0.0054
$ 0.0054
No gap
Operational Excellence
7 Annual Productivity: Finance & Facilities
vs. Depart
ment of Labor benc
hmark
0.8%
3.0%
-
2.2%
Manage Investment
Portfolios
21 Consolidated Endowment Fund and
Invested Fund Performance Returns, CEF; IF
(R3
, quarterly)
4.1%
0.0%
3.1%
-
0.2%
No gap
Purchase Goods and
Services
8
Number of Invoice Discrepancies Over 30
Days Old (O1, monthly)
122
50
-
72
Manage Cost of
Capital
22.
Cost of debt: ILP; Non
-
ILP (R3,
quarterly)
4.3%
5.1%
5.0%
5.5%
No gap
Purchase
Goods and
Services
9
Percent of Online Invoices Paid Within 45
Days of Invoice Date (O1, monthly)
76%
85%
-
9%
STAFF LEARNING & GROWTH
PROCESS/THEME MEASURE (Strategy Map Objective) ACTUAL TARGE
T
GAP
Manage Workspace
and Infrastructure
Projects
10 Closed Projects Cost versus Budget (O1,
annual)
-
8.4%
-
6.0%
+/
-
10%
No gap
Develop Staff
23
Percentage of staff highly satisfied with
Collaboration (4, 5); 2009 Employee Survey,
(S1, annual)
68%
70%
-
2%
Operate
and Maintain
Buildings;
Campus
1
1a
Carbon Footprint Reduction, in
MgCO2e, Scope 1 and 2 Emissions
(O4,
quarterly)
2.4%
2.0%
No gap
Lead People
24
Percentage of staff highly satisfied with
Internal Communication (4, 5); 2009
Employee Survey (S1, annual)
62%
63%
-
1%
Operate
and Maintain
Buildings;
Campus
1
1b
Carbon Footprint Reduction, in
MgCO2e, Scope 3 Emissions
(O4, quarterly)
11.9%
2.0%
No gap
Lead
People
25
Percentage of staff highly satisfied with
Leadership (4, 5); 2009 Employee Survey
(S2, annual)
63%
70%
-
7%
Operate and Maintain
Buildings;
Campus
12
Water and Energy Conservation, Seattle
Campus (O4, quarterly)
1123gpd
510
btu
1188gpd
538.5btu
No gap
Develop
Staff
26
Percentage of staff highly satisfied with
Development to Full Potential (4, 5); 2009
Employee Survey (S3, annual)
75%
69%
No gap
Advise & Consult
13 Percent of MWBE and SBA firms in
eProcurement
/Diverse Supplier Portal (O3,
quarterly)
35%
25%
No gap
Lead People
27
Percent of staff highly satisfied (4, 5);
2009 Employee Survey "overall satisfaction"
question (S3, annual)
71%
69%
No gap
Financial
Annual % growth in revenue
Average margin per order
Customer
Average wait time (in minutes)
for customer to receive order
# of inaccurate orders per 1,000
Internal Process
# Days to develop new product
% of food wasted
Learning
&
Growth
% of Staff cross
-
trained
% of servers > 5 years with
company
Setting:
It is the year 2000, and you are the Blockbuster senior management
team.
You are the industry leader in renting movies.
Your competitors include Hollywood Video, local video stores, and
grocery stores.
Assignment
:
•
Create the Blockbuster operational dashboard.
•
Using the four perspectives, what measures would you like to see that would
show you know how well Blockbuster is doing?
•
Report out & debrief to class.
Dashboard attributes:
Measures key processes
Operational in nature
Displays day
-
to
-
day activities
Reinforces doing our job well
Analyzes performance
Provides baseline for improvement efforts
Financial
Customer
Internal Process
Learning &
Growth
Star Wars episodes 5 & 6 were
titled “Empire Strikes Back” and
“Return of the Jedi”
What was the title given to the
original 1977 movie Star Wars?
A.
“A New Hope”
B.
“Genesis”
C.
“Anakin’s Vengeance”
“A New Hope” was sub
-
titled to
help distinguish from its prequel
and sequel.
But to this day, most remember
the iconic movie as “Star Wars”
A.
“A New Hope”
B.
“Genesis”
C.
“Anakin’s Vengeance”
Which is the most expensive movie to date?
A.
Avatar
B.
Pirates of the Caribbean: At World's End
C.
Titanic
Which is the most expensive movie to date?
A.
Avatar $237M
B.
Pirates of the Caribbean: At World's End $300M
C.
Titanic $200M
Guess this animated science fiction movie:
•
Year is 2105
•
Earth is covered in trash
•
Humans live on luxury
Starliners
•
Trash compactor robot cleans Earth
•
Robot & movie titled “WALL• E”
Why we
exist
What’s
important to
us
What we want to
be
Our game plan
Translate, Focus and Align
What are the priorities
What we must improve?
What I need to do?
Vision / Mission /
Values
Strategy
Operation / Tactics
Develop
Strategy
Test and
Adapt the
Strategy
Monitor and
Learn
Plan
Operations
Translate
the Strategy
Strategy Map
Balanced
Scorecard
Dashboards
Now that you have a Strategy Map and
Strategic Objectives, how would you know
you are making progress in achieving it?
A Scorecard tells the story of the strategy.
Reviewing the Scorecard is a way to assess
progress towards the Strategic Objectives on
the Map.
BSC scorecard vs. "metrics": BSC not a collection of measures, it's a description
of the organization's strategy.
Operational
Dashboard
Strategy
Scorecard
Purpose
Demonstrates an organization’s
performance in delivering
their core
-
processes today.
An organization’s
roadmap of the
future
, and how every entity within the
organization impacts success.
Themes
Day
-
to
-
day
activities
Doing our job well
Management
Tasks
“Winning
the
fight”
Concrete
5
-
year
plan
Moving the organization forward
Leadership
Projects
“Winning
the
war”
Perception
Examples of
Measurements
# of days to
process transactions
# of transactions
# of outstanding items
$ savings / costs
“lag measure” (after the fact)
Best indicator/proxy
Can be
concrete;
e.g. “utility costs
avoided”
Milestones achieved
Index of several measures that
connect to tell the story
Operational
Dashboard
Strategy
Scorecard
Suggestions
when starting to
measure
Consider measurements that best
refelct
your
core process.
Consider
one
Lead
and
one
Lag measure.
Lag
measures may not be available in the
beginning;
rather,
just
lead indicators.
Review
Month
ly or quarterly
Semi
-
annual
/ Annual
When is it
Strategy
vs.
Operations?
Once
a
strategy
is achieved
and the
process is stable, it
can move
to
operations.
An operational
measure may
become strategically important and reviewed at a
strategic
level
(e.g.,
Budget responsibility at
UW, utility costs avoided, etc.)
Lead vs. Lag
measures
Lag
=
Whether you met your
desired results
Lead
=
A predictive driving metric
that leads to achieving results, or
early indicator/warning sign
Could be lead or lag
The
ultimate strategic measure (“were desired
results achieved?”) is often a lag indicator.
Since strategy is usually cast at a 3
-
5 year
horizon, lead measures are reviewed in the
interim.
Draft and
launch
initiatives
when target can’t be reached through current core processes or incremental process
improvement. Initiatives, once achieved, introduce new capability or innovation that changes the operation or context of
the strategy.
An initiative may impact several Strategic Objectives/Measures
Not all Strategic Objectives have an initiative
Initiatives are akin to projects and are not operational (e.g.,
project m
ilestones, completion
dates
—
not routine
services or performance levels)
Eamp汥猠of 楮楴楡瑩te猺s䥮瑥牮r氠Lend楮g P牯r牡rⰠ䝬Gba氠Suppo牴rP牯橥捴
As the senior management team, craft a Strategy Map for your firm. Where is
your company heading in the next 5 years, given what you know?
Draft at least one scorecard measure for each perspective to help you
understand whether you’re achieving your strategic objectives.
It is the Year 2010, present time
Your table is the senior management team of one of these assigned companies: Blockbuster,
Netflix or
Redbox
. You all provide entertainment products to consumers,
but using different
business models.
In the last 10 years, there have been significant changes within the industry
Internet technologies
Changing c
ustomer
demographics
New business lines (e.g., game rentals, agreements with studios for exclusive movie
release
dates)
Hollywood Video bankrupt (formerly major Blockbuster rival)
STRATEGY MAP TEMPLATE
FINANCIAL
Double profits within 5 years.
MISSION
Deliver quality entertainment
VISION
Bringing quality of life anywhere, anytime
CUSTOMER
INTERNAL PROCESS
LEARNING & GROWTH
Target Types
Description
Usage
Example
CUSTOMER
Target based on Customer
expectations of your process.
Target set via customer input
(survey, feedback, focus
-
groups).
•
Demonstrating client
satisfaction or customer
expectations.
•
Number of days UW
officially closed on regular
school days (Target=0)
•
One day response time for
customer
-
inquiry
BENCHMARK
Target based on peer
performance. How does
your process rank relative to
the industry? How does it
rank relative to the industry’s
best practices?
•
Demonstrating cost
-
effectiveness / value
•
Demonstrating rank among
peers
•
Our performance
compared to industry
average
•
Gap between our
performance and industry
best
-
practices
STRETCH
Target based on projections
from improving the process,
rather than from incremental
change over time.
•
Process Improvements
•
Target setting when other
methods are not
appropriate/available
•
Reduce process turnover
time to 3 days within 1
year
•
Rate of return up 10%
from previous year
COMPLIANCE /
LAW
Target based on compliance
or law requirements. These
targets are prescribed, and
are non
-
negotiable “red
-
rules.”
•
Complying with regulations
•
Common in industries
dealing with regulatory
issues (e.g. Grants/
Contracts, Construction,
Payroll, Safety, etc.)
•
Meet
e
mission standards
for automobiles
•
Eliminate
v
iolation of civil
rights in the workplace
Target Setting
“Benchmarking is the process of
comparing one’s business processes
and performance metrics to industry
bests and/or best practices from
other industries. Dimensions typically
measured are
quality
,
time
, and
cost
.
Improvements from learning mean
doing things better, faster, and
cheaper.”
en.wikipedia.org/wiki/Benchmarking
Remote Research/Analysis
LEAN, CPI, BSC
“STEP 3”
BSC
—
either dashboard or scorecard
“STEP 1”
“STEP 2”
Develop
Strategy
Test and
Adapt the
Strategy
Monitor and
Learn
Plan
Operations
Translate
the Strategy
Strategy Map
Balanced
Scorecard
Dashboards
The Balanced Scorecard (BSC) aligns business activities, improves
communications, and measures organization performance against
strategic goals.
What would you like to know more about?
How to get involved? (classes, teams, dashboards & scorecards, etc.)
FS
CPO
FM
Treasury
Group
University
Audit
Finance
&
Facilities
Strategy
Scorecard
Yes
Yes
Yes
(hybrid)
In process
Operation
Dashboard
In process
Yes
Yes
Yes
Yes
Contact
Linda Tennant
Kelly Casey
Jeanne
Semura
Susan Freccia
Patricia Durbin
LuAnn or
Vincent
How does operational dashboard link to
scorecard and strategy map
Enter the password to open this PDF file:
File name:
-
File size:
-
Title:
-
Author:
-
Subject:
-
Keywords:
-
Creation Date:
-
Modification Date:
-
Creator:
-
PDF Producer:
-
PDF Version:
-
Page Count:
-
Preparing document for printing…
0%
Σχόλια 0
Συνδεθείτε για να κοινοποιήσετε σχόλιο