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1. Introduction of KT
Established in 1981
( Completely privatized in 2002 )
The largest provider of high-speed internet, local, long-
distance and international call services in Korea
Selected as top company in corporate governance
excellence for Asia ( 2003 )
Nominated BSC Hall of Fame (2003)
BSC :: Balanced Score Card
Definition
- Management practice that attempts to complement drivers of past performance (financial measures) with the drivers of future performance, such as customer satisfaction, development of human and intellectual capital, and learning.
- (by BusinessDictionary.com)
ONLY FROM THEFINANCIAL VIEW POINT
ONLY FROM THEFINANCIAL VIEW POINT
VIEW FROMFinancial,Customer satisfaction,Internal business process. andLearning and Growth point
VIEW FROMFinancial,Customer satisfaction,Internal business process. andLearning and Growth point
COMPREHENSIVECOMPREHENSIVE
PRIOR METHODPRIOR METHOD BSCBSC
MUCH MOREMUCH MORECUSTOMER-ORIENTED!!CUSTOMER-ORIENTED!!
BSC of KT – Background
• Because of the expansion of the wireless market, entry of new competitors are accelerated. Rapid collapse of the fixed phone market
• New business (Ex, Internet) Preemption of competitors
• Because of the expansion of the wireless market, entry of new competitors are accelerated. Rapid collapse of the fixed phone market
• New business (Ex, Internet) Preemption of competitors
• “See” was weak in the management cycle “Plan-Do-See”
• Few of the officers knew about vision and strategy
• Performance measurement and corporate strategy and objectives were not corresponded.
• “See” was weak in the management cycle “Plan-Do-See”
• Few of the officers knew about vision and strategy
• Performance measurement and corporate strategy and objectives were not corresponded.
Why did KT select the BSC?Why did KT select the BSC?
KT :: Come to a crisisKT :: Come to a crisis
BSC of KT – Building Process
Cyber World LeaderCyber World Leader
BSC Performance MeasurementBSC Performance Measurement
Activity-Based
Budgeting
Activity-Based
Budgeting
Multidimensional Profitability Analysis
Multidimensional Profitability Analysis
Insider trading /
Replacement price
Insider trading /
Replacement price
Forecasting and
Planning
Forecasting and
Planning
Distribution of Budget
Resources
Distribution of Budget
Resources
Business Management
Business Management
ABC Profitability Management ABC Profitability Management
ABB Planning and Control
Account CodeAccount Code
KT :: Integrated Performance Management System Model
BSC of KT – Building Process
GoalGoalChanges and Administrative Aspects
Institutional Aspects
Information System Aspects
BSC of KT – Building Process
PilotPilot
Phase 0Phase 0
Perform Full-Scale DevelopmentPerform Full-Scale Development
Phase 1Phase 1
Build SystemBuild System
Phase 2Phase 2
• Assessment requirements review
• Practical possibilities
• Bench Marking
• Organization of TFT Group and Ready
• Assessment requirements review
• Practical possibilities
• Bench Marking
• Organization of TFT Group and Ready
Strategy Review Strategy Review
Develop Enterprise BSCDevelop Enterprise BSC
Develop BSC for Employment and Business department
Develop BSC for Employment and Business department
• User Requirements Review
• System Integration
• Database Development
• User Interface Development
• Operating Stabilization
• User Requirements Review
• System Integration
• Database Development
• User Interface Development
• Operating Stabilization
KT :: The Promoting Procedure of BSCKT :: The Promoting Procedure of BSC
KT Members SurveyKT Members Survey
BSC of KT – Building ProcessKT Members SurveyKT Members Survey
• Recognition About Vision & Mission statement of KT Important to achieve company’s outcome
• Only about 20% of the members of the company understand the vision
• Recognition About Vision & Mission statement of KT Important to achieve company’s outcome
• Only about 20% of the members of the company understand the vision
• Long-term strategy : Lack of concreteness• Long-term strategy : Lack of concreteness
• Communication about the strategy is not performed clearly within the organization
• Management goals and incentives are more impacted by the government policy than company
• Long-term strategies are not properly reflected in business plan and annual budget of the item
• Communication about the strategy is not performed clearly within the organization
• Management goals and incentives are more impacted by the government policy than company
• Long-term strategies are not properly reflected in business plan and annual budget of the item
Vision of KTVision of KT
Communication about Strategy Communication about Strategy
• Lack of publicity
• Limited channels of information sharing
• Instructions, rather than strategy
• The department of promoting long-term business strategy is not clear
• Lack of publicity
• Limited channels of information sharing
• Instructions, rather than strategy
• The department of promoting long-term business strategy is not clear
BSC of KT – Building ProcessBSC Project promoting strategyBSC Project promoting strategy
Cyber World Leader
Cyber World Leader
Focus Data and wireless business
Focus Data and wireless business
BSC Promoting Strategy
1.Development of indicators that is connected to vision, strategy
2. Timely Offering Performance information through BSC system
3.Building strategic management process of performance rate
BSC Promoting Strategy
1.Development of indicators that is connected to vision, strategy
2. Timely Offering Performance information through BSC system
3.Building strategic management process of performance rate
Vision of KTVision of KT
Strategy of KTStrategy of KT
BSC of KT - Characteristic
Utilize leadership of manager for innovation
Convert KT's strategic terms into practical terms
Redefine KT's strategies and organization
Make KT's strategy into member's daily business
Improve KT's strategy into continuous process
FiveFivePrinciple ofPrinciple of
BSCBSC
FiveFivePrinciple ofPrinciple of
BSCBSC
• Creative communication
• Increase employee’s understandability of overall strategy and BSC
• Increase employee’s supportiveness
• Creative communication
• Increase employee’s understandability of overall strategy and BSC
• Increase employee’s supportiveness
• BSC development : Strategies, Overall Performances, Internal customers
• Management’s objectives + BSC KPI Executive officer’s interests & participation
• BSC development : Strategies, Overall Performances, Internal customers
• Management’s objectives + BSC KPI Executive officer’s interests & participation
• Relationship between overall strategy and KPI • Relationship between each departments
• Relationship between upper class’ performance and lower class’ incentive
• Relationship between overall strategy and KPI • Relationship between each departments
• Relationship between upper class’ performance and lower class’ incentive
• Introduction of BSC system
• Integrating data with EDW(enterprise data warehouse)
• Providing information with consistent data, systematized data
• Introduction of BSC system
• Integrating data with EDW(enterprise data warehouse)
• Providing information with consistent data, systematized data
• Strategy map shows the relationship between each strategic goals
• Generate KPI
• Strategy map shows the relationship between each strategic goals
• Generate KPI
Cross-functional Strategy Map of KT ADSLCross-functional Strategy Map of KT ADSL ServiceService
BSC of KT - CharacteristicKT’s ADSL :: Cross-functional Strategy Map KT’s ADSL :: Cross-functional Strategy Map
EVALUATION FROM OUTSIDE
BSC HALL OF FAMEBSC HALL OF FAME
“ … They introduced BSC as a catalyst which provides their vision and strategies
to the entire organization in 1999. …It went beyond our expectation…”Present :
11.78
Present : 11.78
EVALUATION FROM INSIDE
Net Income $3.2 Billion (1999) → $15.8 Billion(2002)
EVA Growth rate-$3.8 Billion(1999) → $1.3 Billion(2002)
5 million More Subscribers in 3 years
3 years’ run of CVA Enhancement
World Best Internet Service Provider
Quantitative AssessmentQuantitative Assessment
EVALUATION FROM INSIDE
Qualitative AssessmentQualitative Assessment• KPI could be able to be used as a “Second Language” …
How Well Do you UnderstandHow Well Do you Understand About The KT’s VISION & STRATEGYAbout The KT’s VISION & STRATEGY?
* Internal Survey (1999. 09 / 2001. 11)
Challenges to Sustainable Growth
DODO
SEESEE
PLAN
PLAN
FEEDBACFEEDBACKK
Vision/Strategy
Development
ManagementGoal
Establishment
StrategyTranslation
FinancialPlanning
KT SEM Unified ProcessKT SEM Unified Process
Marketin
g
Business
Order
Managem
ent
Fare
Managem
ent
CU
STOM
ER
CU
STOM
ER
SERVIC
E
SERVIC
E
Communication
Network Installation
Communication
Network Management
R & DR & D
Reference
BSC Institute (http://www.balancedscorecard.org/) Business Dictionary (http://www.businessdictionary.com) Wikipedia(Eng ver.) Improve Your Performance “News” – David Wilsey, 2009, Balanced
Scorecard Institute) Strategy map (http://strategymap.com.au/) The Balanced Scorecard - Measures that Drive Performance
Robert S. Kaplan and David P. Norton. 1992, Jan-Feb, Harvard
Business Review https://www.bscol.com/bsc_online/technology/certified/ http://www.12manage.com/methods_balancedscorecard_ko.html