Balanced Scorecard Quick Guide.pptx 2024
- 2. Basics & Best Practices Terminologies Balanced Scorecard Quick Guide
- 3. Booz & Company 28 March 2009 In addition, Strategic & Business Planning relies on well-defined, best practice terminology Strategic & Business Planning Process Key Terminology Units Key Performance Indicators (KPI) Goal Objective Strategy Initiative Any Business or Functional Unit. According to the new organization structure, GACA has five Business Units (KKIA, KAIA, KFIA, Domestic Airports and ANS) and five Functional Units (Corporate Core, IT, Finance, Human Resources, Internal Audit) and a Safety and Economic Regulation function1 A measure used to monitor how well a business is achieving its quantifiable objectives. KPIs are found at both the strategic (assets turnover, customer satisfaction index) or operational levels (e.g. traffic volume) Long-term target value (a number) of KPI; set to be attained after five years Short-term target value (a number) of KPI; set to be attained in one year A means or action that will lead to the achievement of a goal (five years ahead) A means or action that will lead to the achievement of the objective (one years ahead). A set of initiatives form a strategy Balanced Scorecard Quick Guide
- 4. Contents • BSC general work flow • Internal Scanning Summary • External Analysis Summary • SWOT Analysis Summary • Strategy Mapping Summary • KPIs Setting Summary • Targets Setting Summary • Initiatives Setting Summary • BSC Dashboard Summary • Performance Assessment Summary Balanced Scorecard Quick Guide
- 5. Now • BSC general work flow • Internal Scanning Summary • External Analysis Summary • SWOT Analysis Summary • Strategy Mapping Summary • KPIs Setting Summary • Targets Setting Summary • Initiatives Setting Summary • BSC Dashboard Summary • Performance Assessment Summary Balanced Scorecard Quick Guide
- 6. One Of The Best Practices For BSC Work Flow 1. Internal Scanning 2. External Scanning 3. SWOT Analysis 4. Strategy Mapping 6. Targets Setting 5. KPIs Setting 7. Initiatives Setting 9. Performance Monitoring 8. BSC Dashboard Balanced Scorecard Quick Guide
- 7. Now • BSC general work flow • Internal Scanning Summary • External Analysis Summary • SWOT Analysis Summary • Strategy Mapping Summary • KPIs Setting Summary • Targets Setting Summary • Initiatives Setting Summary • BSC Dashboard Summary • Performance Assessment Summary Balanced Scorecard Quick Guide
- 8. Internal Scanning Summary Introduction Internal scanning is a strategic planning technique that helps in determining the firm’s strengths and weaknesses and any related issues inside the firm Purpose • Knowing firm’s strengths and weaknesses • Getting exposed to the firm’s processes and chain of commands Suitable Techniques The following techniques are suitable to serve the internal scanning purpose: • Value Chain Analysis • Capability Assessment Expected Outcomes Once the internal scanning is done, it is expected to have: • Firm’s strengths • Firm’s weaknesses • Firm’s processes and value transferred from each process to another • potentials for improvements Balanced Scorecard Quick Guide
- 9. Now • BSC general work flow • Internal Scanning Summary – Related Templates • External Analysis Summary • SWOT Analysis Summary • Strategy Mapping Summary • KPIs Setting Summary • Targets Setting Summary • Initiatives Setting Summary • BSC Dashboard Summary • Performance Assessment Summary Balanced Scorecard Quick Guide
- 10. Value Chain Analysis Activity A Key Responsibilities Key Responsibilities Key Responsibilities Key Responsibilities Activity B Activity C Activity D Value transferred Value transferred Value transferred Value transferred Template Balanced Scorecard Quick Guide
- 11. Capability Assessment Organization Readiness (%) People Readiness (%) Process Readiness (%) System Readiness (%) Evidence and Comments Activity A Activity B Activity C Activity D Template Balanced Scorecard Quick Guide
- 12. Now • BSC general work flow • Internal Scanning Summary • External Analysis Summary • SWOT Analysis Summary • Strategy Mapping Summary • KPIs Setting Summary • Targets Setting Summary • Initiatives Setting Summary • BSC Dashboard Summary • Performance Assessment Summary Balanced Scorecard Quick Guide
- 13. External Scanning Summary Introduction External scanning is a strategic planning technique that helps in determining the firm’s opportunities and threats and any related issues outside the firm Purpose • Knowing firm’s opportunities and threats • Getting exposed to the firm’s competitors and market changes Suitable Techniques The following techniques are suitable to serve the external scanning purpose: • Industry Trends • Porter 5 Forces Model Expected Outcomes Once the external scanning is done, it is expected to have: • Firm’s opportunities • Firm’s threats • New trends and demands • potentials for investments and competitive advantages Balanced Scorecard Quick Guide
- 14. Now • BSC general work flow • Internal Scanning Summary • External Analysis Summary – Related Templates • SWOT Analysis Summary • Strategy Mapping Summary • KPIs Setting Summary • Targets Setting Summary • Initiatives Setting Summary • BSC Dashboard Summary • Performance Assessment Summary Balanced Scorecard Quick Guide
- 15. Corporate Industry Trends Trend Description Supporting Evidence Implications Trend A Trend B Trend A Trend B Trend A Trend B Trend A Trend B Trend A Trend B Competitive Trends Market Trends Regulatory Trends Technology Trends Other Trends Template Balanced Scorecard Quick Guide
- 17. Now • BSC general work flow • Internal Scanning Summary • External Analysis Summary • SWOT Analysis Summary • Strategy Mapping Summary • KPIs Setting Summary • Targets Setting Summary • Initiatives Setting Summary • BSC Dashboard Summary • Performance Assessment Summary Balanced Scorecard Quick Guide
- 18. SWOT Summary Introduction SWOT is a strategic planning technique that helps in determining the firm’s strategic directions and priories Purpose Knowing what strategies will sustain the growth of the firm and what will be done in order to extract advantaged over the competitors Suitable Techniques The following techniques are suitable to serve the SWOT purpose: • SWOT Matching Expected Outcomes Once the SWOT is done, it is expected to have: • Firm’s strategic directions and priorities Balanced Scorecard Quick Guide
- 19. Now • BSC general work flow • Internal Scanning Summary • External Analysis Summary • SWOT Analysis Summary – Related Templates • Strategy Mapping Summary • KPIs Setting Summary • Targets Setting Summary • Initiatives Setting Summary • BSC Dashboard Summary • Performance Assessment Summary Balanced Scorecard Quick Guide
- 20. SWOT Summary External Factors Opportunities Threats Internal Factors Strengths Weaknesses 1. Internal Strengths Matched with External Opportunities … … … … 2. Internal Weaknesses Relative to External Opportunities … … … … 3. Internal Strengths Matched with External Threats … … … … 4. Internal Weaknesses Relative to External Threats … … … … Template Balanced Scorecard Quick Guide
- 21. Leverage the planned expansion for Jeddah airport to attract the growing charter market in the region SO1 SO2 SO1 WO1 WO2 WO3 WT2 SWOT Analysis Explore New Market Segments to Expand Revenue Base Strategic Priorities 1 2 3 SO ST WO WT WO4 WO5 WO6 Template Balanced Scorecard Quick Guide
- 22. Now • BSC general work flow • Internal Scanning Summary • External Analysis Summary • SWOT Analysis Summary • Strategy Mapping Summary • KPIs Setting Summary • Targets Setting Summary • Initiatives Setting Summary • BSC Dashboard Summary • Performance Assessment Summary Balanced Scorecard Quick Guide
- 23. Strategy Mapping Summary Introduction Strategy mapping is a strategic planning technique that helps in representing the firm’s strategies in such a way that shows the cause and effect of each strategy Purpose To ensure that each strategy does really serve a specific other strategy, and the overall strategies serve and feed the firm's vision Suitable Techniques The following techniques are suitable to serve the strategy mapping purpose: • Strategy Map Expected Outcomes Once the strategy mapping is done, it is expected to have: • Firm’s strategy map Balanced Scorecard Quick Guide
- 24. Now • BSC general work flow • Internal Scanning Summary • External Analysis Summary • SWOT Analysis Summary • Strategy Mapping Summary – Related Templates • KPIs Setting Summary • Targets Setting Summary • Initiatives Setting Summary • BSC Dashboard Summary • Performance Assessment Summary Balanced Scorecard Quick Guide
- 25. LEARNING AND GROWTH PERSPECTIVE INTERNAL PERSPECTIVE CUSTOMER PERSPECTIVE FINANCIAL PERSPECTIVE VISION Template Balanced Scorecard Quick Guide
- 26. Now • BSC general work flow • Internal Scanning Summary • External Analysis Summary • SWOT Analysis Summary • Strategy Mapping Summary • KPIs Setting Summary • Targets Setting Summary • Initiatives Setting Summary • BSC Dashboard Summary • Performance Assessment Summary Balanced Scorecard Quick Guide
- 27. KPIs Setting Summary Introduction KPIs (Key Performance Indicators) are measures that indicate how is the progress of strategic objectives and targets achievements Purpose To indicate and alarm the management for strategy and targets achievements or deviations Suitable Techniques •KPIs Profile • Benchmarking • KPIs Libraries Expected Outcomes Once the KPIs setting is done, it is expected to have: • Firm’s KPIs • KPIs definitions & frequency of review •KPIs formulas • Strategic objectives that are measures by specific KPIs • KPIs owners Balanced Scorecard Quick Guide
- 28. Now • BSC general work flow • Internal Scanning Summary • External Analysis Summary • SWOT Analysis Summary • Strategy Mapping Summary • KPIs Setting Summary – Related Templates • Targets Setting Summary • Initiatives Setting Summary • BSC Dashboard Summary • Performance Assessment Summary Balanced Scorecard Quick Guide
- 29. Definition Definition Definition Definition KPI Definition X+Y = Z X+Y = Z X+Y = Z X+Y = Z KPI Formula W/M/Q/S/A W/M/Q/S/A W/M/Q/S/A W/M/Q/S/A Frequency Name / Dept. Name / Dept. Name / Dept. Name / Dept. Owner Template Balanced Scorecard Quick Guide
- 30. Now • BSC general work flow • Internal Scanning Summary • External Analysis Summary • SWOT Analysis Summary • Strategy Mapping Summary • KPIs Setting Summary • Targets Setting Summary • Initiatives Setting Summary • BSC Dashboard Summary • Performance Assessment Summary Balanced Scorecard Quick Guide
- 31. Targets Setting Summary Introduction Targets are those values (determined in each KPI) that the management wants to achieve within a certain time Purpose To make the KPIs and the measurement more quantifiable and measureable Suitable Techniques • Benchmarking • Forecasting • Feasibility studies • Market Research Expected Outcomes Once the targets setting is done, it is expected to have: • KPIs targets • Targets values & units Balanced Scorecard Quick Guide
- 32. Now • BSC general work flow • Internal Scanning Summary • External Analysis Summary • SWOT Analysis Summary • Strategy Mapping Summary • KPIs Setting Summary • Targets Setting Summary • Initiatives Setting Summary • BSC Dashboard Summary • Performance Assessment Summary Balanced Scorecard Quick Guide
- 33. Initiatives Setting Summary Introduction Are those actions that are predesigned and dedicated to achieve the determined targets and to activate specific KPIs Purpose To help the firm achieving strategic objectives Suitable Techniques • Benchmarking •Feasibility studies • Market Research • R&D Expected Outcomes Once the initiatives setting is done, it is expected to have: • Strategic plan initiatives • Owners Balanced Scorecard Quick Guide
- 34. Now • BSC general work flow • Internal Scanning Summary • External Analysis Summary • SWOT Analysis Summary • Strategy Mapping Summary • KPIs Setting Summary • Targets Setting Summary • Initiatives Setting Summary – Related Templates • BSC Dashboard Summary • Performance Assessment Summary Balanced Scorecard Quick Guide
- 35. Strategic Priority A Strategic Priority B Strategic Priority C Strategic Priority D Strategic Priority 1. KPI1 2. KPI2 3. KPI3 1. KPI1 2. KPI2 3. KPI3 1. KPI1 2. KPI2 3. KPI3 1. KPI1 2. KPI2 3. KPI3 KPI VALUE (unit) VALUE (unit) VALUE (unit) VALUE (unit) Target 1. Action A 2. Action B 3. Action C 1. Action A 2. Action B 3. Action C 1. Action A 2. Action B 3. Action C 1. Action A 2. Action B 3. Action C Initiative Template Balanced Scorecard Quick Guide
- 36. Now • BSC general work flow • Internal Scanning Summary • External Analysis Summary • SWOT Analysis Summary • Strategy Mapping Summary • KPIs Setting Summary • Targets Setting Summary • Initiatives Setting Summary • BSC Dashboard Summary • Performance Assessment Summary Balanced Scorecard Quick Guide
- 37. BSC Dashboard Summary Introduction It is a simple visualization of the firm’s performance Purpose To help the management taking decisions and being up to date with the firm’s overall performance Suitable Techniques • MS Power Point Presentation • MS Excel • other software Expected Outcomes Once the BSC dashboard is done, it is expected to have: • Projected BSC perspectives and firm's strategic priorities with notifying designs Balanced Scorecard Quick Guide
- 38. Now • BSC general work flow • Internal Scanning Summary • External Analysis Summary • SWOT Analysis Summary • Strategy Mapping Summary • KPIs Setting Summary • Targets Setting Summary • Initiatives Setting Summary • BSC Dashboard Summary – Related Templates • Performance Assessment Summary Balanced Scorecard Quick Guide
- 39. Internal Processes Dimension Indicators % (Actual / Target) Learning & Growth Dimension Indicators % (Actual / Target) Financial Dimension Indicators Actual < 90% of Target 90% of Target < Actual < 100% of Target Actual >= 100% of Target % (Actual / Target) Internal Processes Dimension Indicators % (Actual / Target) Template Balanced Scorecard Quick Guide
- 40. Now • BSC general work flow • Internal Scanning Summary • External Analysis Summary • SWOT Analysis Summary • Strategy Mapping Summary • KPIs Setting Summary • Targets Setting Summary • Initiatives Setting Summary • BSC Dashboard Summary • Performance Assessment Summary Balanced Scorecard Quick Guide
- 41. Performance Assessment Summary Introduction It is a systematic examination of the whole strategic plan and its achievements and implications Purpose Contiguous learning and improvement Suitable Techniques • Cause& Effect • systematic inspections and assessment • Corrective planning • Preventive planning • Lessons Learned Expected Outcomes Once the performance assessment is done, it is expected to have: • Performance assessment reports Balanced Scorecard Quick Guide
- 42. Now • BSC general work flow • Internal Scanning Summary • External Analysis Summary • SWOT Analysis Summary • Strategy Mapping Summary • KPIs Setting Summary • Targets Setting Summary • Initiatives Setting Summary • BSC Dashboard Summary • Performance Assessment Summary – Related Templates Balanced Scorecard Quick Guide
- 43. External Factors Description A X Internal Factors Operational Lever Root Cause Corrective Action Plan 1 2 X % Plan Completed 30% 04/09 09/08 33% 01/09 11/08 80% w% dd/yy dd/yy Template Balanced Scorecard Quick Guide
- 44. KPI(Target Unit) 6 5 4 8 30 0 10 20 30 40 M-3 M-2 M-1 Current Month Cumulative To Date 0 10 20 30 40 Actual Target Comments Summary of drivers for performance Summary of actions taken to rectify any variance Overall Status Based on both current performance and on cumulative-to-date performance Gap =< -10% of Target -10% of Target < Gap < 0% of Target Gap >= 0% of Target Template Balanced Scorecard Quick Guide
- 45. End of Balanced Scorecard Quick Guide