Balanced Scorecard and the Internal Business Process Perspective
Module 5 - Case
INTEGRATION - CAUSAL CHAINS AND STRATEGY
Assignment Overview
You have spent a lot of time in this course learning about the Balanced Scorecard approach. The benefit of the approach is that it measures an organization's performance from multiple perspectives. You have had an opportunity to consider organizational performance from several different perspectives and tie performance to strategy. You have also had an opportunity to consider organizational dynamics in relation to the implementation of a large-scale project like adoption of the Balanced Scorecard approach.
In this module you will have an opportunity to take what you have learned and to apply it as an organizational consultant.
For this Case Assignment you will play the role of a consultant presenting a case to a medium-to-large technology firm. A representative from the company Sonic Technologies has contacted you and asked you to meet with a group of company executives to discuss how the BCS approach works in technology organizations.
Of course, it is well known that consultants are not all-knowing and that it is not uncommon for them to do a considerable amount of research before presenting a case to a client. Fortunately, you come across the following document while preparing for the assignment:
Rohm, H., Malinoski, M., Strategy based balanced scorecards for technology. Balanced Scorecard Institute. Retrieved from: http://www(dot)balancedscorecard(dot)org/Portals/0/PDF/Technology%20Company%20Balanced%20Scorecard%20Systems_06222010_Final.pdf
Case Assignment
Your task is to prepare an overview document that you will provide to the individuals who participate in your meeting. The document should not exceed 5 pages but should summarize the key points of the Balanced Scorecard process based on what you have learned this session and you need to apply what you have learned to technology organizations.
Assignment Expectations
Your essay should be 4–5 pages long and include the following:
Introduction: In this part of your essay introduce your topic and provide a brief overview of the key points you plan to make in your paper.
Analysis: In this section present the actual comparison and contrast between BAA’s approach to the Balanced Scorecard and more traditional approaches.
Conclusion: Wrap up your argument with a clear and cogent synopsis of your findings. Do your best to convince your reader (aka your professor) that your position is valid.
Additional Instructions: Your essay should be 4–5 pages in length (not counting your title page or references). You must include a title page and a list references. APA formatting is preferred. Do not paste in sections of text into your essay. All of your work must be written in your own words. It’s OK to use a short quote now and again, but quotations must be in quotation marks and properly cited. In-text citations should be used anytime you are borrowing somebody else’s ideas, or information. That is to say, if you are borrowing a thought from a publication from J. Neutron’s article written in 2010, that section of text must be followed with (J. Neutron, 2010). Quotations, data, and general ideas (put into your own words) should all be cited.
Balanced Scorecard and the internal business process perspective
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Introduction
The managers of technology companies are normally challenged by disruptive, enabling technologies that can invalidate business models or products; tackling the increasing customer demands; communicating and creating crucial product development decisions; rewarding, retaining, and recruiting technology talent; and rapidly shrinking product cycles (Rohm and Malinoski, 2012). Company executives mostly do not communicate strategies in a manner that the business is directed. This results in misalignment and disagreement on how such shortcomings are perceived and addressed in the company. Any technology company can address these challenges by defining its measure development success and product planning. It is vital to develop effective monitoring process to rectify programs, which are off track and monitor customer needs and issues, and develop company’s products. A balanced scorecard is a vital system that can be used as a strategic management and planning framework to enable a technology company to address these challenges including other issues that are important for developing value for stakeholders and customers such as organizational readiness and capacity, financial performance, and process efficiency.
Comparison and contrast between Technology Company approach to the balanced scorecard and other traditional approaches
Keyes (2005) views that several organizations have been measuring their organizational performance by focusing on the process or internal performance using traditional approaches such as the number of FTE (full-time equivalent) allotted, number of programs that an organization controls, the size of the budgetary allocation for the fiscal year or financial measures of earnings-per-share, market share, and Return-On-Investment. These traditional approaches cannot offer a complete perspective of a company’s performance that managers require managing efficiently. However, by balancing process and internal measures with financial measures and results, managers can obtain a more comprehensive picture (perspective) and understand where to make improvement.
David P. Norton and Robert S. Kaplan have designed a set of measures which they termed as “a balanced scorecard”. Such measures give managers a rapid and detailed perspective (picture) of the company’s performance and including both results and process measures (Galup, 2012). Managing a technology company is quite complex and therefore expects managers to be a position to view performance of many areas simultaneously. A balanced scorecard is considered as a set of measures that offer valuable information (picture or perspective) of an organization’s performance.
How the BSC works in Technology Company
Managers can collect information from four perspectives such as organizational capacity perspective, financial perspective, internal business processes perspective, and customer perspective.
In financial perspective, its strategic objective aims to enhance the development of Expense Return on Investment (RoI). Managers focus on measuring market share and profit of the company. Rohm and Malinoski (2012) explain that a technology company, which performs well in several operational areas, can still experience challenges if its product development decisions are defective. Product management decisions in a technology company should be based on the measured and estimated return on product and development expense. A consistent and effective practice for evaluating RoI and applying it the process of making decision should be driven horizontally and vertically in the entire company. This practice is a fundamental requirement important to achieve a consistent and reliable decision-making process and communicating product investment decisions.
A single financial metric can show how to make decisions on what to make an investment. Consistent inputs into the metric can enable an achievement of the programs with margin potential and the highest revenue (Rohm and Malinoski, 2012). Having this as a strategic priority can enable the technology company to maximize its profit and revenue obtained from efficient product development and innovation. Increasing both revenues and profits are two strategic objectives that enable the completion of the financial perspective of this company’s strategy.
In customer perspective, its strategic objective aims to strengthen customer interactions. Managers must understand whether or not their company satisfies customers’ needs. They must determine how ...