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Assignment 02

This document is a student assignment submission for a course on Procurement and Supply Management. It was submitted by Shajidur Rahman Chowdury with an ID of 2022-2-95-040 to their professor Mohammad Mazharul Islam on November 28, 2023. The document then discusses the balanced scorecard approach and how it can be used to track organizational performance across financial, customer, internal processes, and learning and growth perspectives using key performance indicators. It provides an example of how Apple previously implemented a balanced scorecard.

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12 views4 pages

Assignment 02

This document is a student assignment submission for a course on Procurement and Supply Management. It was submitted by Shajidur Rahman Chowdury with an ID of 2022-2-95-040 to their professor Mohammad Mazharul Islam on November 28, 2023. The document then discusses the balanced scorecard approach and how it can be used to track organizational performance across financial, customer, internal processes, and learning and growth perspectives using key performance indicators. It provides an example of how Apple previously implemented a balanced scorecard.

Uploaded by

bristikhan405
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Assignment – 2

Course Code : SCM 523


Course Title : Procurement and Supply Management

Submitted to : Mohammad Mazharul Islam


Faculty
Masters of Business Administration

Submitted by : Shajidur Rahman Chowdury


ID No : 2022-2-95-040

Date of Submission : 28.11.2023


The balanced scorecard is a management tool designed to convert an organization's strategic goals
into a set of performance targets that are then tracked, evaluated, and adjusted as needed to
guarantee that the organization's goals are realized. The idea behind the balanced scorecard
approach is that traditional financial accounting indicators used by businesses to assess their
strategic objectives are not adequate to keep them on course. Financial performance provides
insight into historical events rather than the current or ideal state of the company. By adding
measurements that assess success in areas like customer happiness and product innovation to
financial measures, the balanced scorecard approach seeks to give stakeholders a more complete
picture.
A strategic management tool that thoroughly records corporate performance across multiple
dimensions is the KPI Balanced Scorecard. By combining multiple Key Performance Indicators
from different angles, it gives a balanced view of the organizational performance in various crucial
areas and shows how well your organization is fulfilling all of its strategic objectives. It is
implemented in a top-down manner, beginning with the overarching strategy of the company and
working down to departments and individual members; for example, KPI balanced scorecards can
be used to assess the performance of both teams and individuals. With a balanced approach, the
KPI balanced scorecard enables you to achieve comprehensive growth, strengthen your operations,
and become a more resilient and strong company when faced with obstacles. It makes your
company a proactive, flexible, and successful player in the fast-paced global economy of today. In
a dynamic and cutthroat business environment, an organization's ability to succeed depends on
factors other than profits. It is insufficient to evaluate an organization's underlying health and
growth potential based only on its financial performance. It is therefore necessary to abandon
traditional performance management, pinpoint your key strategic goals and areas, diversify your
KPIs in line with those goals, and accomplish more comprehensive performance management.
Even though financial performance is still very important, focusing only on profitability can have
negative effects on other important areas of a business's operations. It is necessary to integrate
several areas of performance measurement into a complete strategy. That's precisely what the KPI
Balanced Scorecard assists you with.

The four performance perspectives of a KPI Balanced Scorecard


Financial Perspective: Conventional performance measurement emphasizes the financial
performance of the firm. Accordingly, in a traditional model, the only performance criteria used
to determine organizational success were financial ones like net profit margin and operating cash
flow.
On the other hand, the KPI balanced scorecard includes a wide range of KPIs, but financial KPIs
continue to play a significant role in it. The KPI balanced scorecard's financial perspective
addresses the conventional measures for gauging the success of a firm, such as revenue,
profitability, and return on investment (ROI). The organization's financial health is shown by the
financial perspective.
Customer Perspective: The measurements pertaining to the customer experience are included in
the customer viewpoint, which extends beyond the conventional KPIs. The customer perspective
is included in the KPI balanced scorecard because businesses understand that user experience,
customer support, customer experience, customer perception of your business, and customer
satisfaction with your goods and services are all crucial to your operations. Metrics like as
customer happiness, loyalty, and other significant KPIs pertaining to the organization's capacity to
satisfy customer requirements and expectations are included in the customer viewpoint.

Internal Processes Perspective: While many businesses concentrate on strategic projects to boost
their bottom line, there is growing agreement about the advantages of streamlining and increasing
the effectiveness of different organizational functions. The internal processes perspective, which
looks at the efficacy and efficiency of the organization's internal processes, is brought into the
picture by the KPI balanced scorecard. It includes Key Performance Indicators (KPIs) that assist
in gauging how well your processes produce goods and services.

Learning and Growth Perspective: The KPI balanced scorecard captures the learning and
growth perspective that covers the organization's efforts to improve and grow over time, which
further expands into how you as an organization can collectively innovate and deliver value to
customers. Traditional methods of performance measurement do not take learning aspects of the
organization, such as upskilling, into account. From this angle, the key performance indicators
(KPIs) are associated with skill development, staff training, and other elements that contribute to
the long-term success of the firm.
Example:
The Apple case study is especially interesting in retrospect. Apple (then known as Apple
Computer) developed a balanced scorecard to expand the focus of senior management beyond
metrics such as gross margin, return on equity and market share.

A small steering committee, versed in the strategic thinking of executive management, chose to
include all four scorecard categories and develop measurements within each category.

• From the financial perspective of the scorecard, Apple emphasized shareholder value.
• For the customer perspective, it emphasized market share and customer satisfaction.
• For internal processes, it emphasized core competencies.
• For the innovation and improvement category, it stressed employee attitudes.

Among the highlights of Apple's balanced scorecard planning are the following:

➢ Apple desired to be categorized as a customer-centric business rather than one that was
primarily focused on technology and products. Apple made the decision to create its own
independent polls that monitored important market groups worldwide in order to go beyond
the conventional customer satisfaction measurements that were available at the time, given
the diversity of its customer base.

➢ Executives at Apple desired a concentrated effort from staff members on a small number
of critical skills, such as intuitive user interfaces, robust software architectures, and
efficient distribution networks.

➢ Apple sought to gauge staff members' dedication to and alignment with the overarching
objectives. The corporation conducted extensive employee surveys in addition to smaller,
more frequent surveys of randomly chosen staff members to gauge staff comprehension of
the company's strategy and whether or not results requested by management aligned with
it.

➢ Senior management valued market share as a means of boosting sales as well as luring and
keeping talented software developers.

Apple also included shareholder value as a key performance indicator (KPI), even though this
measure is a result, not a driver of strategic performance. Apple intended its emphasis on
shareholder value to offset the previous emphasis on such short-term metrics as gross margin and
sales growth, with a focus on investments that could impact future performance.

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