Introduction to the Performance Scorecard

March 2009

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Agenda

• Concepts

• Overview

• Demo

• Q&A

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Scorecard & Dashboard

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Buzz Words for Dashboard and Scorecard

• Scorecard• Strategic Objectives, Targets, Goals• Leading / Lagging Indicators• Strategy Mapping• Cause & Effect• Accountability Map• KPI Tracking• Linking Strategy to Budget• Pay for Performance• Traffic lighting

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“Cross-functional analytic applications that define, measure, and analyze a business strategy according to key performance indicators."

The most famous is the Kaplan-Norton "balanced scorecard" that incorporates a business methodology for defining and relating financial and nonfinancial indicators of performance.

These analytic applications manage KPIs and causal relationships, supporting the closed loop process of measuring and managing the execution of strategic goals across the organization.

Scorecards are…

Henry MorrisIDC

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A style of user interface designed to deliver user-specific information relating to the health of the business, typically represented by key performance indicators (KPIs) and links to relevant reports.

Visual cues and graphs focus user attention on important trends, changes, and exceptions.

Dashboards are…

Henry MorrisIDC

Dashboards and Scorecards - Differing Perspectives

Dashboards

• Business results• Operational and strategic• Root cause analysis• Guided navigation

Past

Dashboards: Why did I miss my goal?

Scorecards

• Strategy deployment • People & team scoring• Accountability maps• Management processes• Initiative tracking• Cause & effect• Collaboration

Future

Scorecards: How does my goal support the corporate strategy?

AlertingBenchmarking

MetricsGraphicsReportingMetadata

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Key Value Proposition

Alignment and Accountability are Key to Driving Enterprise Performance…

InsightPerformance

Action

SetGoals

Plan

Monitor

Analyze

Report

Align• Allocate strategic

targets• Financial budgeting• Operational planning• Rolling forecasts

• Financial and operational• Revenue, profits, KPIs• Efficiency and utilization• Benchmarking and

metrics• Variances to budget• Key trends across LOBs• Profitability• Effectiveness

• Financial & statutory• Management reporting• Compliance • SDR – GRI metrics

• Revisit goals• Update models• Update plans• Reallocate resources

• Develop strategies and goals

• Define key initiatives and KPIs

• Model scenarios

Ensuring Alignment to Corporate Objectives

Objectives

CriticalSuccessFactors

CriticalSuccessFactors

CriticalSuccessFactors

Actions Actions Actions

Headquarter

Subsidiary 1 Subsidiary 2 Subsidiary 3

Hyperion Performance ScorecardAligns Strategy with Execution

• Translates strategies into objectives to establish ownership and accountability

• Communicate goals and objectives to align an entire organization

• Tailor scorecards by individual or teams to increase adoption

• Monitor key performance indicators to track execution

Core Competencies Translated into Performance Management Frameworks

6-Sigma

The Balanced Scorecard

• Financial • Customer

• Internal• Learning & growth

• EVA and EVA drivers• Customer

• Cost• Capability

Stern Stewart

KeyPerformance

Indicators

Malcolm Baldridge

• Leadership • Process quality• Human Resource

Development & Management

• Strategic Planning

• Information and analysis

• Customer focus and satisfaction

• Quality and operational results

Financial

Customer

Internal

Learning & Growth

Interoperability

Actuals Target YEAR 1

Strategic,Long-Term

GoalsHSF

Target YEAR 5

ERP, CRM, HR, Other (Oracle, SAP…)

ConsolidatedActuals

HFM

BudgetGoals

HP

Hyperion Performance ScorecardAdvantage

FEATURES BENEFITS

• Methodology neutral• Collaborative environment

(alerting, notes, initiatives)• Strategy management and

alignment to accountability• The only strategy management

application in the world that is tightly integrated with both

– Planning (Performance or Strategic Planning)

– BI (especially the BI Workspace)

• Greater control over strategy Execution

• Accountability and confidence in long-term plans and strategy

• Faster response to market dynamics and competitive pressure

• Pay for performance• Process control

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Identifying Scorecard Opportunities…

Likely to have buy-in from TOP management

Have strategy maps defined and likely want a way of linking accountability to strategy

Communication and collaboration about strategy and measures are important to them

Need to record explanations to support the strategy and record outcome analysis narrative

LIKELY NOT!

Only want to report on and get a better understanding of their metrics

Dashboard look is the main focus

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Discovery Guide & Cross-sell

17

Performance Scorecard

Administrator

Submit

Corporate Management

Aggregation

Data Collection

-Data from external systems

-Excel input

-Target setting

-PTD aggregation

-Transformations

-Composite KPIs

Scoring Engine

-Scoring

-KPI maintenance

-Weightages

-Cause & Effect

-Linking KPIs to strategy

-Accountability

-Alerts

-Corrective actions

-Communication

-Link to budgets

-Link performance to incentives

Reporting

Reporting

-Create scorecards

-Drill-down to details

-Multiple targets

-BU performance comparison

-Analysis of KPIs

-Dashboards Cross-sell to Essbase/BI

Cross-sell to Planning?

Data Owners

ExcelExcel

18

Best PracticesAn Aligned Organization

• Business Challenge• Business goals and strategies are confined to the boardroom, and not translated into

meaningful performance metrics for which managers can be held accountable.

• Impact• Wasted resources as different parts of the organization pull in different directions• Lack of synergy• Inability to adapt to changes as an organization

• Solution• Balanced Scorecard – to set realistic goals and make managers accountable for their

actions. Aligns the organization through proper communication of strategy, performance and actions.

• Outcomes• Managers see the big picture and understands how their activities impact the strategic

plan• An accountable organization

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Key Questions

• Prerequisites• Do you have a defined corporate strategy?• Does the strategy include strategic objectives or other high-

level goals and/or initiatives? If so, how many?• How often is your strategy reviewed and/or revised?• Do you have a budget and timeframe for implementing

Performance Measurement and/or Scorecards?

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Key Questions

• Strategy Deployment• How is your strategy communicated throughout the

organization?• Are the objectives/goals of your strategy “decomposed”

into specifically actionable tasks, projects or initiatives?• Do people throughout the organization know what it is

and what role they play in it?• Are the outcomes of your business processes aligned

with your strategy?• Is there a linkage between your strategic, operational and

budgetary planning processes?