BALANCE SCORECARD

VOIE N. SOLIBAN
Version 2007.0 Email Ad: bettysol8@yahoo.com.ph

BSC as Approach to M&E

What is the Balanced Scorecard (BSC)?
Developed by Robert Kaplan and David Norton of Harvard in 1990 Provides a new way of measuring organizational performance: Financial performance measures cannot be the only metric to assess an organizations performance. Provides a foundation for measuring and managing the value created by other facets of an organization: intangible assets such as employees, processes and systems, customer relationships.

BALANCED SCORECARD
The BSC is a strategic management system (and not only a measurement system) that enables the organizations to clarify mission / vision and strategy and translate them into action. When fully deployed, the BSC transforms strategic planning from an academic exercise into the nerve center of an enterprise.

BSC Continuum: Alignment tool

Mission Why we exist? Vision What we want to be Strategy How do we achieve our mission/vision? Strategy Map Translation of the strategy Scorecard Measure, targets, initiatives

Strategic Outcomes Poverty alleviation, Satisfied stakeholders, Efficient processes, Skilled workers

BSC M&E Process

Translate strategy into objectives

Report results

Develop measures and targets

Analyze data

Collect data

Strategy map and Scorecard: Alignment tools

Strategy Map
Financial perspective

Scorecard
Objectives Measures Targets Initiative

Customer satisfaction

Process Improvements

Organizational learning & growth

BSC Basics: Strategy Map

It is a visual presentation of an organizations strategy towards the attainment of its mission and vision; It shows the alignment of an organizations objectives with its mission , vision and strategy (ies).

Building Blocks of a Strategy Map

Mission/ Vision/ Strategy
Objec tive Objec tive Objec tive Objec tive Objec tive

Financial

Objec tive

Customer Internal Processes Learning and Growth

Objec tive Objec tive

Objec tive Objec tive

Benefits of Using the BSC

Strategy Map
Sound Financial Management

Provides focus
Clients

Communicates and educates multiple stakeholders about strategy

Internal Process

Each part of the organization aligns to common objectives

Learning and Growth

Promotes Transparency and accountability

Strategy Map Example

Province of Bohol A-04-PGBH-002: Project Identification and Development using the Local Poverty Reduction Action Plans (LPRAP)

Strategy map
Mission Vision Strategy

BSC Basics Terminology and Concepts

Building blocks

Perspectives Objectives Cause

effect relationships

 Example: Private sector

Operations management

BSC Basics Strategy

Customer management

Mission and Vision: Increase in profit

Innovation

BSC Basics Strategy

Strategies
Operations management Customer management Innovation processes

Definition
Producing and delivering products and services to customers in the cheapest and most efficient way

Establishing & leveraging relationships with customers by deepening relationships with customers

Developing new products, services processes & relationships

Examples of organizations with focused strategy

Jollibee Chowking Yellow Cab McDonalds SMART GLOBE HSBC BPI SONY Microsoft HP Mercedes Benz

 Example: LGU context

Eco-tourism

BSC Basics Strategy

Agriculture

Mission/ Vision: Improve the plight of the province

Coastal resource management

BSC Basics Scorecard

A scorecard contains a set of grouped objectives and metrics derived from an organizations strategy A scorecard may represent an organizational group. A scorecard is commonly cascaded within the organizations hierarchy

BSC Basics Scorecard

Ideally, scorecards within an organization are strategically aligned and linked to one another.

BSC Basics Perspective

A perspective is a grouping of objectives and metrics within a scorecard. Commonly used perspectives are: Financial, Customer, Institutional Process Improvement, Learning & Growth Perspectives may be customized to the organization Perspectives possess a cause-and-effect relationship, driving toward the final perspective

BSC Basics Objective

Describes what you must do well in order to effectively implement your strategy a verb noun statement for a desired business outcome, e.g., Enhance the capacity of HR personnel and line managers in human resource management and development often represent elements of a strategic plan can be linked and cascaded

BSC Basics

Initiatives

are also called projects, action plans or outputs. typically have a start and end date, associated resources, and milestones. can be linked to scorecards, objectives, and or measures

Process
Step 1: Perspectives Step 2: Objectives Step 3: Measures

Step 4 Baseline Data

Step 7: Evidence

Step 6: Baseline Rating

Step 5: Target

Balanced Scorecard Framework (Private Sector)

Financial
To succeed financially, how should we look to our shareholders?

Customer
To achieve our vision, how should we appear to our customers?

Mission/ Vision and Strategy

Internal Business Processes

To satisfy our shareholders and customers, what business processes must we excel at?

Learning and Growth

To achieve our vision, how will we sustain our ability to change and improve?

Objectives

Private vs Public Features Sector BSC

Private Sector
Competitiveness: uniqueness

Features
General Strategic Goals

Public Sector
Mission success: fulfillment of mandate

Stakeholders

Stockholders; buyers; managers Profit

Taxpayers; recipients; legislators; constituents Constituents served; Customer Satisfaction/ Development

Desired Outcome

Scorecard Components
Strategy Map
Sound Financial Management

Elements Objective- What the strategy is trying to achieve Measure- How performance against objective is
Monitored

Clients

Target- Required level of performance.

Internal Process

Initiative - Action program to achieve target.

Objectives Measures Targets Initiatives

Learning and Growth

What is a measure
Elaborations of the objectives Measures are what you look for when evaluating whether the objectives are attained. Expressed in terms of quantity, quality, timeliness and/or cost

Determining what really counts!

In Davao City, a priest and a taxicab driver died and went to heaven. Saint Peter then showed the priest his eternal dwelling placea shack. Saint Peter then showed the driver his eternal dwelling place a mansion. The priest was angry and asked Saint Peter, Why the difference? Saint Peter said, when you preach, people sleep. When riders get into his cab, they pray!

Impact measures
Measures at this level track the effects of training on the attainment of the objectives of the development thrusts (e.g. agriculture, eco-tourism) that lead to better customer satisfaction.

Examples
Improvement in productivity level of farms Increase in adoption rate of new farming technology Improvement in quality

Impact measures
Advantage Track the benefits received at the customer level Establishes more accountability among the stakeholders Disadvantage Difficult to isolate the effects of training Not within the control of trainees/training

Monitoring and Evaluation

What is M&E? Why is it important? What are the current approaches to M&E?

Monitoring and Evaluation

What is M&E?
Monitoring
continuing

function of systematically collecting, analyzing and reporting information during the implementation to enable management and key stakeholders to judge progress and quality of implementation, identify and solve problems and improve quality.
Emphasis

is on activity and output levels.

Source: Unsaid

Monitoring and Evaluation

What is M&E?
Evaluation
periodic

systematic and objective assessment of the relevance, efficiency, effectiveness, impacts and likely sustainability of an ongoing or completed activity. Emphasis is on outputs, outcomes and impact

Source: Unsaid

Monitoring and Evaluation

Why is it important?
Learn

from past experience Improve service delivery Plan and allocate resources Demonstrate results as part of accountability to stakeholders

Source: Monitoring & Evaluation: tools, methods, and Approaches, World Bank, 2004

Monitoring and Evaluation

What are the current tools, methods and approaches to M&E?
Performance indicators Formal surveys Rapid appraisal methods Participatory methods Public expenditure tracking surveys Cost-benefit and cost-effectiveness analysis Impact evaluation

Source: Monitoring & Evaluation: tools, methods, and Approaches, World Bank, 2004