The Balanced Scorecard and Decision Support … Balanced Scorecard and Decision Support System ... an instrument which allows the follow up business evolution! ... proposed by the

Elsa [email protected]

Sogrupo-SI – Caixa Geral de Depósitos Group

The Balanced Scorecard and Decision

Support System – Case Study

1

• The Decision Support System Enterprise Solution

• Lessons Learned

• Context

• Corporative BSC Implementation & BSC Deployment

• Pilot Demonstration

AGENDAAGENDA

• Questions & Answers

• Achieved Results

2


• Lessons Learned

• Context



AGENDAAGENDA



3

! The Case Study is to be presented based on the development of a Decision Support System within the Shared Services Unit of Information Systems

Main characteristics of Sogrupo-SI:

! It serves the major Portuguese bank group

! One year of activity

! It results from the merger of several IS companies

! It has about 400 collaborators

! It presents 4 essential business areas:

- Projects

- Maintenance

- Exploitation

- Customer Services

Main characteristics of Sogrupo-SI:

! It serves the major Portuguese bank group

! One year of activity

! It results from the merger of several IS companies

! It has about 400 collaborators

! It presents 4 essential business areas:

- Projects

- Maintenance

- Exploitation

- Customer Services

CONTEXTCONTEXT

4

! By creating Sogrupo-SI, the CGD Group had the purpose of developing a set of initiatives with the objective of endowing the new organisation with quality, innovation and efficiency

Decision to Create Sogrupo-SI

Decision to Create Sogrupo-SI

Omega ProjectOmega Project Transformation of Sogrupo-SI ProjectTransformation of Sogrupo-SI Project

Organisation

ERP

Project Management

Change Management

Decision Support System (DSS)

People

Support

! Provide better quality service

! Increase efficiency within the organisation

! Promotion of group synergies

! Provide capacity to propose innovative solutions

Initiatives Objectives

CONTEXTCONTEXT

5

! The objectives of the Decision Support System were established aligned with the organisation’s objectives

Main objectives of the project :

! To endow Sogrupo-SI with an instrument which allows the follow up business evolution

! To use the DSS as a main information management tool of Sogrupo-SI

! To align the individual objectives with global strategy

! To supply an integrated and automated decision support solution with the operational systems

! To develop the Cost System as a management tool, with updated information and a high level of detail that allows:

" Manage/monitor at an operational level, in compliance with the strategic objectives based on business drivers

" Manage budgets and invoicing of the services provided to clients

Main objectives of the project :

! To endow Sogrupo-SI with an instrument which allows the follow up business evolution

! To use the DSS as a main information management tool of Sogrupo-SI

! To align the individual objectives with global strategy

! To supply an integrated and automated decision support solution with the operational systems

! To develop the Cost System as a management tool, with updated information and a high level of detail that allows:

" Manage/monitor at an operational level, in compliance with the strategic objectives based on business drivers

" Manage budgets and invoicing of the services provided to clients

CONTEXTCONTEXT

6

• The Decision Support System Enterprise solution

• Lessons Learned

• Context


• Pilot demonstration

AGENDAAGENDA

• Questions and answers

• Achieved results

7

! The information flows reflect the interdependencies between different components

Business Strategy

Balanced Scorecard(BSC)

Balanced Scorecard(BSC)

Information IntegrationInformation Integration

• Mission and Vision

• Themes and Strategic objectives

CostSystemCost

System

• Service provided Cost • Projects Cost

Definition ofSLA

Definition ofSLA

• Performance Measures

• Targets / Goals

• Comparative information of Measures

Operational Systems Artemis External InformationOrdersManagement

• Operational information on costs, investments,... • # hours • # orders

ProblemsManagement

• # interventions

THE DECISION SUPPORT SYSTEM THE DECISION SUPPORT SYSTEM ENTERPRISE SOLUTIONENTERPRISE SOLUTION

8

CorporativeCorporativeBSCBSC

ImplementationImplementation

Targets/Goals

Initiatives

Selection of Support

Application

Measures Assessment

AnalysisPerspectives

Strategic Objectives

and Strategic map

Success Critical Factors

Performance Measures

(KPI)

ConceptionConception

Business Environment

Mission

Vision

Scorecard Scope

Strategic Themes

PilotPilotDesignDesign

PilotPlanning

DevelopmentDevelopment BSCBSCDeploymentDeployment

Exploitation

CustomerServices

Projects

Maintenance

Support

Preparation of Preparation of ImplementationImplementation

CoCo--ordination ordination Mechanisms and Mechanisms and

Management ModelManagement Model

Implementation of Implementation of Corporative BSC Corporative BSC

software toolsoftware tool

Deployment PlanDeployment Plan

! The Balanced Scorecard Project approach:

THE DECISION SUPPORT SYSTEM THE DECISION SUPPORT SYSTEM ENTERPRISE SOLUTIONENTERPRISE SOLUTION

9

! The top-down approach proposed by the Balanced Scorecard starts by documenting the main strategic dilemmas/themes:

THE BSC PROJECT APPROACHTHE BSC PROJECT APPROACH--CONCEPTIONCONCEPTION

10

! In the Conception phase, actions were developed according to the main critical points identified:

Developed actionsDeveloped actions

! The Mission was not defined (Main reason for the organisation existence)

! There was no Global Vision (how the company should be positioned at medium and long term)

Critical pointsCritical points! Workshops to define Mission, Vision and


! Communication actions of Mission, Vision and Strategic Objectives to the entire organisation

! Study about the main trends in the ISOutsourcing market

THE BSC PROJECT APPROACHTHE BSC PROJECT APPROACH--CONCEPTIONCONCEPTION

11

! The Strategy Map reflects a graphic view of the organisation strategy in terms of strategic objectives and cause-effect relationships between

Optimisation of the financial performanceMaximisation of the value proposal

QualityRelationship PriceTime

Alignment with CGD GroupAlignment with CGD Group

Cost Resources

Motivated and prepared collaborators

CultureReorientation

of competencies Formation

Efficiency and effectiveness of processes

Projects Maintenance Exploitation Customer Services

SupportProcesses

TechnologicalSupporting

infrastructure

Client Financial

Processes

Learn & Growth

+ + + +

+ + +

Methodologies and tools

“Cost-benefit”Analysis

Previousdevelopments

Outsourcingutilisation

Systemsin production

Clients formation

Knowledge about client + business + IS+ + + ++ +Quality

control +

THE BSC PROJECT APPROACHTHE BSC PROJECT APPROACH--DESIGNDESIGN

12

! In this Design phase, a set of the measures and the critical success factors of the strategic objectives were identified:

Critical Success Factors

Deliver according to specifications

Response in time according to the established

Client oriented collaborators

Systems availability

Productivity of the collaborators

Processes optimisation

Client Financial Processes Learn &Growth


x xx x

x x x

x x

x x x

x x

Illustrative


13

! The measures proposed by the Balanced Scorecard were obtained according to several selection criteria

Set of measures susceptible to utilisationSet of measures susceptible to utilisation

Priority and filtering MeasuresPriority and filtering Measures

Initial proposal of MeasuresInitial proposal of Measures

Measures proposal for WorkshopMeasures proposal for Workshop

Proposal discussion with Top Management

Proposal discussion with Top Management

Measures ValidationMeasures Validation

Measures SelectedMeasures Selected

Initial collection of business Measures

Initial collection of business Measures Relevance for BusinessRelevance for Business

Intervention CapacityIntervention Capacity

+

Strategy

Information AvailabilityInformation Availability

Measures IndependenceMeasures Independence

+

+

Mission

Vision

Critical Success Factors


Measures Selection Criteria


14

! During the Design phase, actions were developed according to the main critical points identified

Actions Developed Actions Developed

! Strategic objectives where not aligned to the organisation Mission and Vision

! Lack of knowledge about critical success factors that influence strategic objectives

! Difficulty in identifying which measures are essential to monitor the organisation performance

Critical PointsCritical Points

! Identification / alignment of strategic objectives and establishment of cause-effect relationships (strategic map) as well as the relative success critical factors

! Achieving the business critical measures filtered according to an iterative process

! Realisation of workshops to obtain agreement about the Balanced Scorecard design


15

! The definition of Targets and Initiatives permits to drive the organisation towards objectives materialisation

• Client fidelity

• Operational result

• % of resources use

• % of average permanence in each level

• About 50% annual increase;

• 20% annual increase;

• Year 1, 60%; year 2, 65%; year 3, 70%;

• Year 1, 50%; year 2; 75%year 3, 90%;

• CRM implementation

• Definition of management plans

• Resource control implementation

• Formation programmes

Strategic ObjectivesStrategic Objectives MeasuresMeasures TargetsTargets InitiativesInitiatives

Profitability

Revenues growth

Financial

Client

Service quality

Supply capacity

Processes

Processes management

Resources management

Learning & Growth

Motivation Workers competencies

Illustrative

THE BSC PROJECT APPROACHTHE BSC PROJECT APPROACH--DEVELOPMENTDEVELOPMENT

16

Actions Developed Actions Developed

! There were no support systems susceptible to feed the BSC Measures

! The strategic objectives of the organisationwere not adjusted although there was a set of established initiatives

! The software solutions existent in the market for Balanced Scorecard are in an intermediate maturity phase

Critical PointsCritical Points

! Achieving the actual values of the measures, when its necessary using estimates

! Identification/evaluation of impact of each initiative on strategic objectives by means of inquiries on various organisational levels

! Evaluation and selection of software solutions which are leaders in the market

! In the Development phase, actions were developed according to the main critical points identified

THE BSC PROJECT APPROACHTHE BSC PROJECT APPROACH--DEVELOPMENTDEVELOPMENT

17


• Lessons Learned

• Context



AGENDAAGENDA



18

PilotPilotCorporativeCorporative

BSCBSCImplementationImplementation

Initiatives


Application

Measures Assessment

DefinitionPerspectives


and Strategic map




Mission

Vision

Scorecard Scope

Strategic Themes

DesignDesign

PilotPlanning


Exploitation

CustomerServices

Projects

Maintenance

Support








PILOT DEMONSTRATIONPILOT DEMONSTRATION

Targets/Goals


(KPI)

19

Balanced ScorecardBalanced Scorecard

Analytical Information Systems

(ex.: Activity Based Costing System)

Analytical Information Systems

(ex.: Activity Based Costing System)

Access to Information

Operational Systems

Data Warehouse

AccountingAccounting Human Resources

Human Resources LogisticLogistic

Pilot EnvironmentIllustrative


1/6

20

Ilustrative


2/6

21

Illustrative


3/6

22

Illustrative


4/6

23

Illustrative


5/6

24

Illustrative

6/6


25


• Lessons Learned

• Context



AGENDAAGENDA



26

PilotPilotCorporativeCorporative

BSCBSCImplementationImplementation

Initiatives


Application

Measures Assessment

DefinitionPerspectives


and Strategic map




Mission

Vision

Scorecard Scope

Strategic Themes

DesignDesign

PilotPlanning


Exploitation

CustomerServices

Projects

Maintenance

Support








Corporative BSC Implementation & Corporative BSC Implementation & BSC DeploymentBSC Deployment

Targets/Goals


(KPI)

27

! Corporate BSC Implementation and Deployment through Sogrupo-SI areas

Corporative BSC Implementation & Corporative BSC Implementation & BSC DeploymentBSC Deployment

02 - 2002 07 - 200203 - 2002 05 - 200204 - 2002

Corporative BSC Implementation Corporative BSC Implementation Corporative BSC Implementation

BSC DeploymentBSC DeploymentBSC Deployment

06 - 2002

ProjectsProjectsProjects

MaintenanceMaintenanceMaintenance

ExploitationExploitationExploitation

Customer Services

Customer Customer ServicesServices

SupportSupportSupport

Illustrative

28

MissionMissionMission

VisionVisionVision

ValuesValuesValues

Core CompetencesCore CompetencesCore Competences

Strategic ThemesStrategic ThemesStrategic Themes

Strategic ObjectivesStrategic ObjectivesStrategic Objectives

MeasuresMeasuresMeasures

Strategic TargetsStrategic TargetsStrategic Targets

Strategic projects / InitiativesStrategic projects / InitiativesStrategic projects / Initiatives

Monitoring & EvaluationMonitoring & EvaluationMonitoring & Evaluation

! The Strategic Challenge ... Why do we exist?. What do we offer to the society?...

... How are we going to do it?…

... What behavioral patterns should guide our people’s actions?…... What core competences

will guarantee our competitive advantage?...

... What big themes will guide the company action for the coming years? ...

...What specific objectives define this strategic themes?...

...How are we going to measure the

achievement of our objectives?...

...What specific targets do we want to attain for each measure?...

...What actions are we going implement in order to achieve the

strategic objectives?...

In which way are we going to monitor the performance of each measure in order to

evaluate whether we are reaching our targets or not?...

Corporative BSC ImplementationCorporative BSC Implementation

29

!! Client OrientedClient Oriented!! Objectives OrientedObjectives Oriented!! ProductivityProductivity!! InnovationInnovation

!! Client PartnershipClient Partnership!! Ethic & ProfessionalismEthic & Professionalism!! Interpersonal RelationshipsInterpersonal Relationships!! Results OrientedResults Oriented

SOGRUPOSOGRUPO--SISI COLLABORATORSCOLLABORATORS

VALUES COMPANYVALUES COMPANY

! Development a culture and a set of core competences associated with the Strategy..

!! Quality ManagementQuality Management!! Change ManagementChange Management!! Knowledge ManagementKnowledge Management

SOGRUPOSOGRUPO--SISI

CORE COMPETENCESCORE COMPETENCES

!! Human Resources ManagementHuman Resources Management!! Project ManagementProject Management!! Technology Knowledge ManagementTechnology Knowledge Management

Corporative BSC ImplementationCorporative BSC ImplementationIllustrative

30

! From the pilot to the Implementation …

MEASURES

INCLUDED IN

THE PILOTMEASURES

MEASURES

INCLUDED IN

INCLUDED IN

THE PILOT

THE PILOT MEASURES ADAPTED

TO THE NEW STRATEGY

MAPMEASURES ADAPTED

MEASURES ADAPTED

TO THE NEW STRATEGY

TO THE NEW STRATEGY

MAPMAP


31

Infr

a In

fra

Estr

utur

asEs

trut

uras

Maximize the Value of the IS for CGD GroupMaximize the Value of Maximize the Value of the IS for CGD Groupthe IS for CGD Group

Be the strategic IS Partner

Proc

esse

sPr

oces

ses

Valu

eVa

lue Facilitate the

Evolution of the businessFacilitate the

Evolution of the business

Deliver services within the establish Quality Service agreements

Deliver services within the establish Quality Service agreements

Deliver services ata Competitive PriceDeliver services ata Competitive Price

Dynamize the timeto client in order to respect

the delivery time

Dynamize the timeto client in order to respect

the delivery timeClie

ntC

lient Foster the

Relationships withthe clients

Foster theRelationships with

the clients

Optimize theoutsourcing services

Optimize theoutsourcing services

Organizational and human capital development

Be the reference in Operative Excellency in the delivery of services

Foster the use of methodologies & support systems

Foster the use of methodologies & support systems

Develop IS & ITState of the Art

Knowledge

Develop IS & ITState of the Art

KnowledgeCreate awareness of

The SSI ImageCreate awareness of

The SSI Image

Optimize and rationalizethe Business Processes

(Project, Maintenance development, ...)

Optimize and rationalizethe Business Processes

(Project, Maintenance development, ...)

Satisfy the IS necessitiesin an efficient way

Satisfy the IS necessitiesin an efficient way

Contribute toImprove the performance

Contribute toImprove the performance

Integrate andStandardize the IS

of CGD Group

Integrate andStandardize the IS

of CGD Group

Allocate resourcesAccording to the Objectives

and core competences

Allocate resourcesAccording to the Objectives

and core competences

Foster a HR Infrastructureassociated with the strategyFoster a HR Infrastructure

associated with the strategy

QualityManagement

QualityManagement

Lear

n &

Le

arn

&

Gro

wth

Gro

wth

Corporative BSC ImplementationCorporative BSC ImplementationIllustrative

Support the SSI Business withThe adequate IS & IT

Support the SSI Business withThe adequate IS & IT

32

! The involvement of the people during the Corporative BSC implementation process

...How are we going to measure the fulfillment of the objectives?...

...How are we going to measure the fulfillment of the objectives?...

Set the level of the stress we want to put into the organization and

the people in it, identifying what is considered an achievement

How we are going to measure if we succeed

in achieving the strategic Targets / Goals

Key Programs and projects needed in order to achieve the strategic objectives and targets /

Goals

Translate the company mission into a set of tangible objectives that

differentiate which are the key focus points for the people of the organization from the rest

! Jean Pierre Martin! Definition and automatizationof the clients information needs

! 5 Demands per Client per month

! < 0.4

! # Ad Hoc Information demands

! % Hours spent in gathering the information needed

! Ensure the information readiness

ResponsibleInitiativesTargetsMeasuresObjectives

Identifies who is going to be responsible for which objective/s setting the accountability of the

targets and goals


33

! The deployment scenario…

Sogrupo-SIReporting

Maintenance

Measures, Targets,Initiatives and Responsibles

CGD Group

ExploitationProjects CustomerServices

Support

Process A Process B Process …

BSC DeploymentBSC DeploymentB

SC

Dep

loym

en

t

34


• Lessons Learned

• Context



AGENDAAGENDA



35

! Design and divulgation of Mission, Vision and Strategic Objectives of Organisation;! Establishment of a common management language:

" Facilitating the organisational change inherent to the Organisation creation;

" Facilitating the dialogue between various business areas/perspectives;! A versatile team of people who understand their contribution to the business

strategy;! The Balanced Scorecard has shown a strong potential as a model for a flexible

strategic management allowing the alignment of the whole organisation around the strategy in a fast and precise way by: " Guaranteeing a Comprehensive Vision of the Strategy of the Organisation." Integrating the main objectives of the various areas and helping brake

departmental barriers." Facilitating the strategic monitoring of challenges (strategic feedback).

! Demonstration of a Decision Support System value through the construction of a Pilot;

ACHIEVED RESULTS ACHIEVED RESULTS

36

! User friendly web interface, promoting the Balanced Scorecard as a communication tool

! Documenting and divulging the organisation strategy

! Visualising the cause-effect relationships between strategic objectives and the measures that support them

! Fast construction of a pilot to demonstrate the benefits of the Balanced Scorecard approach

! The standard usage of the Balanced Scorecard Methodology by the organization

ACHIEVED RESULTS ACHIEVED RESULTS

! Advantages in using SAS STRATEGIC PERFORMANCE MANAGEMENT

37


• Lessons Learned

• Context



AGENDAAGENDA



38

! It is important to ensure that the project leadership is at the higher level of the organization.

! Obtain the management team agreement on each phase of the project with the workshops.

! Management tools are not enough to make the change effective: it is necessary to involve all the collaborators in the whole process.

! The Change Management project, developed at the same time, generated synergies and contributed to the success of this project.

! Manage the communication process of the project to all the collectives involved.! Rapid development of a proof of concept version which allows the demonstration of

the advantages of the solution adopted.! It is necessary to recognize that the Decision Support Systems does not make

decisions: it gives information to be used in making decisions.! The optimal is an enemy of the good.

LESSONS LEARNEDLESSONS LEARNED

39


• Lessons Learned

• Context



AGENDAAGENDA



40

QUESTIONS & ANSWERSQUESTIONS & ANSWERS

Documents

The Balanced Scorecard and Decision Support … Balanced Scorecard and Decision Support System ... an instrument which allows the follow up business evolution! ... proposed by the