2. What is Balance Scorecard?
Balance Scorecard is a Management Tool that provides stakeholders with a
comprehensive measure of how the organization is progressing towards the
achievement of its strategic goal.
3. What does it do?
Balances financial and Non-financial measures
Balances short and long-term measures
Balances performance drivers(leading indicators) with outcome
measures(lagging indicators)
Leads to strategic focus and organizational alignment
6. Financial:
In private companies financial is the main objective(primary goal)
In financial perspective, the strategic goal is long term shareholder
It is achieved by two factors
Cost efficiency
Revenue growth
7. Customer:
For the company, survival customers are needed
Customers perspective has:
Customer satisfaction
Customer profitability
Customer acquisition
Market share
Customer retention
An assessment of the product or service
quality provided by a business that measures how
loyal its customers are.
Customer retention statistics are typically
expressed as a percentage of long term clients
8. Internal process:
Internal process perspective reflects the processes in the business that should
be optimized in order to meet the needs of the customers
The four main themes are:
Operation management processes
Customer management processes
Innovation processes
Regulatory and social processes
9. Learning and growth perspective:
Learning and growth perspective
reflects capability of the company
The three themes are:
Human capital
Organization capital
Information capital
10. Advantages and Disadvantages:
Advantages:
Get a balanced view of company
performance
Sees the financial bottom line, for
not only long term but immediate
actions too
Disadvantages:
We need to have clearly stated
objectives for solving problems
Overall view of the four areas for
concern in business growth and
development, these four areas do
not paint the whole picture
11. IT Governance on One Page
Effective governance addresses three questions:
What decisions must be made?
Who should make these decisions?
How will we make and monitor these decisions?
12. IT Governance:
The top performing organizations implement IT governance most effectively
to support their strategies.
Weill and Ross define IT Governance as
“specifying the decision rights and accountability framework to encourage
desirable behaviour in using IT”
This ensures compliance with the enterprise’s overall vision and values
The effectiveness of IT governance in delivering four objectives
Cost effective use of IT
Effective use of IT for asset utilization
Effective use of IT for growth
Effective use of IT for business flexibility
16. Enterprises use one of six decision making archetypes to make each decision.
We list these archetypes roughly in order from more to less centralized:
1. Business monarchy: A senior business executive or a group of senior executives,
sometimes including the CIO
2. IT monarchy: Individual or groups of IT executives
3. Federal: C-level executives and business representatives of all the operating
groups—may include IT involvement (equivalent of the central government and the
states working together)
4. IT duopoly: Two party decision making involving IT executives and one group of
business leaders
5. Feudal: Business unit or process leaders making separate decisions based on the
needs of their entities.
6. Anarchy: Each individual user or small group
17.
18. Shaded boxes: Represent the models most commonly used for input to
decisions
Heavily outline boxes: Highlight the models most often used to actual making
the decision
