Paramjit Sharma

Measuring Business StrategyThrough

Balance Scorecard

Paramjit Sharma

Organization

Using balance scorecard

2 tasks

BuildingScorecard

UsingScorecard

Organization Organization Organization

Paramjit Sharma

BuildingScorecard

Financial

Customer

Internal

Learning

Return on Investment, Economic value Added

Satisfaction, Retention,Market and Account Share

Quality, Response time,Cost New Product

Employee Satisfaction &Information System

Perspectives Generic Measures

Paramjit Sharma

Financial Perspective

Paramjit Sharma

Linking Financial Objectives to Business Unit Strategy

3 Stages

Growth

Sustain

Harvest

Paramjit Sharma

Growth

Early stage of life cycleProducts having Growth PotentialCommitting ResourcesExpanding production facilitiesOperating capabilitiesInvesting in systemsInvesting in InfrastructureInvesting in distribution networkMore cash outflowFinancial Objective-%age sales Growth customer groups

Paramjit Sharma

SustainStage

Attract investmentsRequired extra returnMaintain existing marketsGrowth is expectedEnhancing improvementsProfitabilityReturn on InvestmentEconomic Value Added

Paramjit Sharma

HarvestStage

Maturity phaseEnough to maintain equipmentsNo expansionNew invest with Short Pay BackMaximize Cash flowReduction in WC Requirements

Paramjit Sharma

Strategic Theme for the Financial Perspective

Growth Sustain Harvest

Revenue Growth MixCost Reduction/Productivity

improvementAssets Utilization/Investment Strategy

Paramjit Sharma

Strategic Theme for the Financial Perspective

Revenue Growth Mix

•Sales Growth•Market Share•Revenue From New Products Services & Customers

Paramjit Sharma

Strategic Theme

Sales Growth rate bySegment, PercentageRevenue from newProducts, services…

Revenue/Employee Investment(% Of Sales)R & D (% of Sales)

Share of Targeted Customers

Cross Selling

% Revenue from new Application

Customer & Product lineProfitability

Customer & Product lineProfitability

% Unprofitable Customers

Cost versus CompetitorsCost rates

Indirect Expenses( % of Sales)

WC Ratios(Cash to Cash Cycle)

ROCE

Assets UtilizationRates

Unit Costs(Per unit of outputPer transaction)

Payback

Throughput

Revenue GrowthAnd Mix

Cost ReductionProductivityImprovement

AssetUtilization

Bus

ines

s U

nit

Str

ateg

y

Gro

wth

Sus

tain

Har

vest

Paramjit Sharma

Strategic Theme for the Financial Perspective

Revenue Growth Mix

New Product/Service

•% Revenue Increase

Paramjit Sharma

Strategic Theme for the Financial Perspective

Revenue Growth Mix

New Application

Paramjit Sharma

Strategic Theme for the Financial Perspective

Revenue Growth Mix

New Customers and Markets

Paramjit Sharma

Strategic Theme for the Financial Perspective

Revenue Growth Mix

New Relationship

Paramjit Sharma

Strategic Theme for the Financial Perspective

Revenue Growth Mix

New Product andService Mix

Paramjit Sharma

Strategic Theme for the Financial Perspective

Revenue Growth Mix

New Pricing Strategy

Paramjit Sharma

Strategic Theme for the Financial Perspective

Cost Reduction/ProductivityImprovement

Increase RevenueProductivity

Paramjit Sharma

Strategic Theme for the Financial Perspective

Cost Reduction/ProductivityImprovement

Reduce Unit Costs

Paramjit Sharma

Strategic Theme for the Financial Perspective

Cost Reduction/ProductivityImprovement

Improve Channel Mix

Paramjit Sharma

Strategic Theme for the Financial Perspective

Cost Reduction/ProductivityImprovement

Reduce OperatingExpenses

Paramjit Sharma

Strategic Theme for the Financial Perspective

Asset UtilizationInvestment

Strategy

Cash to Cash Cycle

Paramjit Sharma

Strategic Theme for the Financial Perspective

Asset UtilizationInvestment

Strategy

ImproveAsset

Utilization

Paramjit Sharma

Questions