Prof. R.C.M.

Pendyala
The Balanced Scorecard.
Strategy to Measures
BSC is not a :
Dashboard of Financial & non financial
indicators.
New/re-hashed measurement system.

BSC is a tool to convert a strategy into
action
WHAT IS A BALANCED SCORECARD?
It is a set of measures that are directly
linked to the companys strategy . It
directs a company to link its own
long term strategy with tangible
goals & actions.

BSC & STRATEGY
A strategy is a set of hypotheses about cause &
effect.
Any system such as BSC should tell the story of the
BUs Strategy.
It should make explicit the sequence of hypotheses
about the cause & effect relationships between
various action the BU proposes to take.
Every element selected for a BSC should be an
element in a chain of cause & effect relationship
that communicates the meaning of the BUs
strategy.

Benefits of Balance Scorecard
Balanced Scorecard Concept
Financial Perspective
To succeed financially , how should
we appear to our shareholders
(Corporate Management)?
Business Process Perspective
To satisfy our shareholders &
customers , what business process
must we excel at ?
Customer Perspective
To achieve our mission, how should
we appear to our customers ?
Renewal , Learning Growth
Perspective
To achieve our mission , how will we
sustain our ability to change &
improve?
Implementation Steps of BSC
Strategy
Strategy mapping
Performance measures
Implementation

Strategy
VISION
MISSION
OBJECTIVES
GOALS
STRATEGIES
& TACTICS
Strategy Mapping
Return on
investment
Customer Loyalty
On-time Delivery
Process Quality Process Cycle Time
Employee Skills
FINANCIAL
CUSTOMER
INTERNAL
PROCESSES
ORGANISATIONAL
LEARNING
Performance Measures
It should help Us Decide
Are We Doing Things Right?
(HOW)?
Are We Doing Things Right?
(WHAT)?
INPUT PROCESS OUTPUT OUTCOME
Input: Resources , including cost & workforce
Process: Activities , efforts, workflow
Output: Products & Services Produced
Outcome: Results, Accomplishments, impacts.

Performance Measures
It should help Us Decide
Are We Doing Things Right?
(HOW)?
Are We Doing Things Right?
(WHAT)?
INPUT PROCESS OUTPUT OUTCOME
Input: Resources , including cost & workforce
Process: Activities , efforts, workflow
Output: Products & Services Produced
Outcome: Results, Accomplishments, impacts.

Performance
Measures
Customer/
Stakeholder
Achievement Of Strategic Results
Business Impacts
Internal
Business
Processes
Changes In Process Efficiency
Financial
Budget
Return On Investment (Program/ Service Effectiveness)
Input Measures
Organization
Capacity
Changes In Employee Knowledge , Skills , Attitudes , Behavior & Abilities
Service Efficiency/ Effectiveness Measures
Infrastructure Capacity Gain Measures
BSC PERFORMANCE MEASURES
Measurement Categories