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The following library of key performance indicators is intended to provide an example of the choices some organizations make in building their scorecards and dashboards.

 

Retail

  • Invoice accuracy
  • Total number of customer claims
  • Order entry accuracy
  • Total sales
  • Sales growth
  • Cost per delivery per customer ...

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Supply Chain

  • Cost of freight per unit shipped
  • Purchase order cycle time
  • Cash to cash cycle time
  • Average transit time
  • Number of orders shipped
  • Value of fill rate ...

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Healthcare Facilities

  • % of planned developments on schedule
  • Clinical evaluations
  • Life cycle costs
  • Building occupancy requirements
  • Service and Repairs
  • Maintenance costs of light service ...

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Construction Industry

  • Lean production preparation
  • Just-in-Time
  • Total man-hours worked
  • Reductions in cost from increased plan reliability
  • Cost of labour
  • Cost of materials ...

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More KPIs

 

The following library of key performance indicators is intended to provide an example of the choices some organizations make in building their scorecards and dashboards.

 

Railways

  • Infrastructure cost
  • Maintenance cost of the rail system
  • Human capital cost
  • Platform annual maintenance
  • Spares for infrastructure
  • Administrative overheads ...

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Textile Manufacturing

  • pH of sample
  • Number of abnormalities
  • % Humidity of threads
  • % of harness of threads
  • Deviations in dimensions of the fabric
  • Variance in dye color ...

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Wastewater Services

  • Operating cost per lb of chemicals removed
  • Cost of maintenance
  • Reclaimed Water
  • % of good neighbour to residents
  • Total Suspended Solids
  • % of Waste reduction ...

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Business Process Management Compliance

  • Time assessment
  • Adherence to corporate policy
  • Flow of activities/transactions
  • Working space maintenance
  • Specification and documentation
  • Fraud detection ...

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More KPIs

 

The following library of key performance indicators is intended to provide an example of the choices some organizations make in building their scorecards and dashboards.

 

General Contractors

  • Liquidity
  • Cash Flow
  • Average construction time
  • Backlog
  • Efficiency of supervision
  • Safety inspections ...

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Automotive Supply Chain Management

  • Logistics wage
  • Velocity and flexibility
  • Fill rate
  • Lean logistics
  • Lead time
  • Inventory turns ratio ...

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Airline Industry

  • Arrival defect rate
  • Departure defect rate
  • Total operating revenue per passenger
  • Cargo revenue
  • Passengers per revenue flight
  • Aircraft utilization ...

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Agriculture Industry

  • Number of demonstration plots
  • Drains de-silted
  • Total land irrigated
  • Wastewater discharge
  • Estimated soil moisture
  • Irrigation return interval ...

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More KPIs

 

The following library of key performance indicators is intended to provide an example of the choices some organizations make in building their scorecards and dashboards.

 

Human Resources

  • Number of Full Time Employees
  • Number of Part Time Employees
  • Total hours utilized
  • Total cost incurred
  • Number of Lost Time Injuries (LTI)
  • Number of lost time days ...

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Manufacturing

  • Profit After Tax
  • Interest cost reduction
  • Statutory compliance
  • Inventory Turnover Ratio
  • Internal customer Satisfaction
  • New products introduced per month ...

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Information Technology

  • Hours of user training
  • Improving SLA’s
  • Cost of Infrastructure
  • Cost of delivery
  • Cost of digital storage media
  • Cost of finding and hiring staff ...

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Engineering Solutions

  • Forklift sales-domestic
  • Loyalty Index
  • Defects during warranty period
  • Fast Moving Parts Availability
  • Supplier Satisfaction Index
  • Annual Service Contracts ...

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More KPIs

 

All businesses are unique and have their own reporting needs. A well implemented Performance Management methodology is based on well chosen Performance Management metrics that fit together in balanced harmony. The following library of key performance indicators is intended to provide an example of the choices some organizations make in building their scorecards and dashboards.

 

Financial

  • Inventory turnover
  • Inventory value
  • Employee work center loading
  • Employee scheduled time
  • Employee available time
  • Machine work center loading ...

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Customer

  • Annual sales/customers($)
  • Average customer size($)
  • Customer rating (%)
  • Average time from customer contact to sales response
  • Average time spent on customer relations
  • Customers/employee ...

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Internal Process

  • On-Time Delivery
  • Administrative expense/total revenues (%)
  • Administrative expense/customer ($)
  • Average Lead Time
  • Contracts filed without error
  • Lead time, product development ...

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Learning & Growth

  • Employee participation
  • Training hours per employee
  • Average years of service
  • Absenteeism
  • Turnover rate
  • Employee suggestions ...

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More KPIs

 

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Balanced Scorecard - An integrated framework for unfolding strategy through the use of performance measures in four, perspectives - Financial, Customer, Internal Process, and Employee Learning and Growth. The Balanced Scorecard acts as a measurement system, strategic management system, and a communication tool.


Benchmarking - The comparison of similar practices across organizations and industries to identify best practices, set development targets and measure progress. Benchmarking results may serve as prospective targets for Balanced Scorecard measures.


Cascading - The practice of building aligned Scorecards throughout an organization. At each level the organization will develop Scorecards based on the objectives and measures they can influence from the Scorecard of the group to whom they report. For example, a call center Balanced Scorecard could be based on its Sales and Marketing business unit Scorecard. Cascading allows employee to exhibit a contribution to overall organizational objectives.


Cause and Effect - This concept separates the Balanced Scorecard from other performance management systems. The measures shown on the Scorecard should connect together in a series of cause and effect relationships to tell the organization's strategic story. For example, organizations may put forward that an increase in employee training (Learning & growth) will lead to increased innovation (internal processes). Increased innovation will lead to more loyal customers (customer) which will drive increased revenue (financial).


Customer Perspective - One of the four standard perspectives used within the Balanced Scorecard Management concept. Measures are developed based on the answer to two fundamental questions - who are our target customers and what is our value proposition in serving them? The role of the Customer perspective is often elevated in public sector and not for profit applications of the Balanced Scorecard.


Economic Value Added (EVA) - The after-tax cash flow created by a business minus the cost of the capital it has deployed to generate that cash flow. Corresponding to real profit versus paper profit, EVA brings about shareholder value. Using EVA as a lens, it is possible to determine that despite an increase in earnings, a firm may be destroying shareholder value if the cost of capital associated with new investments is high.


Employee Learning and Growth Perspective - One of the four standard perspectives used within the Balanced Scorecard management concept. Measures in this perspective are often considered "enablers" of measures appearing in the other three perspectives of the Balanced Scorecard Management Concept. Employee expertise, availability of information, and organizational climate are often measured in this perspective.


Financial Perspective - One of the four standard perspectives used within the Balanced Scorecard management concept. Financial measures report to an organization whether the strategy execution, which is detailed through measures in the other three perspectives, is leading to better bottom line results. In public sector and not for profit applications of the Balanced Scorecard measures in the financial perspective often come across as constraints within which the organization must operate.


Human Capital - May be considered a metaphor for the transition in organizational value creation from physical assets to the capabilities of employees - knowledge, skills, and relationships for example. Closely related to terms such as "intellectual capital" and "intangible assets." Recent estimates suggest that as much as 75 percent of an organization's value is attributable to human capital.


Initiatives - The specific agenda, activities, development or actions an organization will undertake in an effort to meet performance targets.


Internal Process Perspective - One of the four standard perspectives used with the Balanced Scorecard management concept. Measures in this perspective are used to monitor the success of key processes the organization must excel at in order to continue adding value for customers, and ultimately, shareholders.


Lagging Indicator - Performance measures that characterize the consequences of actions previously taken are referred to as lag indicators. They frequently focus on results at the end of a time period and characterize historical performance. Sales may be considered a lag indicator. A good Balanced Scorecard must contain a mix of lag and lead indicators.


Leading Indicator - These measures are considered the "drivers" of lagging indicators. There is an assumed connection between the two which suggests that improved performance in a leading indicator will drive better performance in the lagging indicator. For example, spending more time with valued customers (a leading indicator) is put forward to drive improvements in customer satisfaction (a lagging indicator).


Measure - A standard used to assess and communicate performance against expected results. Measures are normally quantitative in nature capturing numbers, dollars, percentages, etc. Reporting and monitoring measures helps an organization determine progress toward effective implementation of strategy.


Mission Statement - A mission statement defines the core purpose of the organization - why it exists. The mission examines the "raison d'etre" for the organization beyond simply increasing shareholder wealth, and reflects employees' motivations for engaging in the company's work. Effective missions are inspiring, long-term in nature, and easily understood and communicated.


Objective - A concise statement describing the definite things an organization must do well in order to execute its strategy. Objectives often begin with an action verbs such as increase, reduce, progress, achieve, etc.


Perspective - In Balanced Scorecard vernacular perspective refers to a grouping of performance measures. Most organizations prefer the standard four perspectives (Financial, Customer, Internal Process, and Employee Learning and Growth), however, the Balanced Scorecard represents a dynamic framework and additional perspectives may be added as necessary to adequately explain and describe an organization's strategy.


Strategic Management System - explain the use of the Balanced Scorecard in aligning an organization's short-term actions with strategy. Often accomplished by cascading the Balanced Scorecard to all levels of the organization, aligning budgets and business plans to strategy, and using the Scorecard as a feedback and learning mechanism.


Strategic Resource Allocation - The process of aligning budgets with strategy by using the Balanced Scorecard to make resource allocation decisions. Using this method, budgets are based on the initiatives necessary to achieve Balanced Scorecard targets.


Strategy - Describes the differentiating activities an organization pursues to gain competitive advantage. Situated at the center of the Balanced Scorecard system, all performance measures should align with the organization's strategy. Strategy remains one of the most widely discussed and debated topics in the world of modern organizations.


Strategy Map - Balanced Scorecard architects Kaplan and Norton coined this term to describe the inter-relationships among measures that weave together to describe an organization's strategy. See also, "Cause and Effect."


Target - Represents the desired result of a performance measure. Targets make meaningful the results derived from measurement and provide organizations with feedback regarding performance.


Values - Represent the deeply held beliefs within the organization and are demonstrated through the day-to-day behaviors of all employees. An organization's values make an open proclamation about how it expects everyone to behave. Values should endure over the long-term and provide a constant source of strength for an organization.


Vision - A powerful vision provides everyone in the organization with a shared mental framework that helps give form to the often abstract future that lies ahead. Effective visions provide a word picture of what the organization intends ultimately to become - which may be five, ten, or fifteen years in the future. This statement should not be abstract - it should contain as concrete a picture of the desired state as possible, and also provide the basis for formulating strategies and objectives.

 

Balanced Scorecard FAQs 

What is Balanced Scorecard?

The balanced scorecard is a strategic planning and management system that is used extensively in business and industry, government, and nonprofit organizations worldwide to align business activities to the vision and strategy of the organization. The Balanced Scorecard is an approach to performance management that combines traditional financial measures with non-financial measures. This approach provides managers with finer and more relevant information about the activities they are managing, increasing the likelihood of organizational objectives being achieved.

What are the main benefits of the Balanced Scorecard?

The potential benefits of a Balanced Scorecard depend on what it is to be used for. The Scorecard will only be useful once applied correctly. There are two distinct applications: Management Control and Strategic Control Although visually similar, these two applications of the Balanced Scorecard require substantially different design and development processes, and provide different benefits to a management team.

Can the Balanced Scorecard be linked to other management processes?

One of the strengths of the Balanced Scorecard is its ability to work well together with existing management processes. 3rd Generation Balanced Scorecard in particular is typically used as the centre of a strategic management system as it provides an easy-to-use method for the selection and co-ordination of other management tools being applied in the pursuit of strategic goals. Four common management processes can link with the Balanced Scorecard: SVA & EVA; the EFQM Business Excellence Model; Activity Based Costing; Budgeting.

Can one use measures from other organizations to build their own Balanced Scorecard?

When designing the Balanced Scorecard for the first time, organizations’ often tend to examine measures chosen by other organizations’ in the same industry, potentially to adopt these into their own scorecard. They also tend to identify a number of measures that are not (e.g. strategic measures). This is a reflection of differences in their long-term goals and in the specific issues they face, despite being in the same industry. This highlights the need to apply a robust approach for measurement identification, unless measures are chosen for benchmarking purposes only.

How can one maximize the chances of successful implementing the Balanced Scorecard?

The practical value of a Balanced Scorecard can only be realised if it is successfully designed and implemented.

Read more

How can the HR and other staff functions benefit from 3rd Generation Balanced Scorecard?

Staff functions are the responsibility for many of the corporate initiatives selected to deliver an organization’s strategic objectives yet these staff functions have limited control over the delivery of strategic initiatives. The Balanced Scorecard is an effective tool to overcome issues associated with strategic management challenges. 3rd Generation Balanced Scorecards, have their starting point clearly articulated description of how the organization should look at some future date (say two to five years)

Read More

The Role of HR, Q & A

Can one apply Balanced Scorecard in their not-profit/public sector organization?

Balanced Scorecard remains very relevant to the not-for-profit sector because such organizations need to address management issues that are generally very similar to those of commercial entities. From its origins in the private sector, the Balanced Scorecard has evolved to become a useful tool equally applicable to not-for-profit organizations, state owned companies, government departments and even internal functions within commercial organizations.

Read More

Beyond Balanced Scorecard New Insights for Public Sector Agencies

Can I apply Balanced Scorecard to my small business?

The success of any business ultimately relies on its ability to satisfy shareholder expectations, through the delivery of related strategic goals. Because Balanced Scorecard helps managers to articulate and track delivery of the organization’s strategic goals, the tool is useful to businesses of any size.

Read an article by Paul Niven:

Balanced Scorecard for Small and Medium Sized Organizations

How to create a Balanced Scorecard for controlling strategy?

In developing the Balanced Scorecard the biggest challenge is deciding the mainly relevant measures to include - particularly for all Scorecards to be used for strategic management.

How to link Corporate and Individual Performance Management Systems?

Corporate Performance Management is about activating changes in organizational activities that result in improved performance. Yet organizational activities are the collective consequence of the behavior of individuals. While much can be done at the organizational or corporate level – through decisions about investment priorities and such like, most improvements rely eventually upon one or more people choosing to change the way they carry out their work for their organization.

Read More

Personal Scorecards: Aligning Individual Performance with Strategic Objectives

How to set Targets for Measures used in Performance Management Systems?

Difficulties in setting targets are a common problem encountered during the creation of a performance management system, and are hard to resolve. Without target values the value of a performance management system is much reduced.

Read More

Choosing Strategic Targets

 

 


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