With HCS strategy as the core of the balanced scorecard develop at least one per
ID: 347504 • Letter: W
Question
With HCS strategy as the core of the balanced scorecard develop at least one performance measure each of the strategic objectives and core values found within the four perspectives of the scorecard (that is, complete column (2) of Figure 4). It is expected 3 to 5 performance indicators per objective.
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issuea in Aernunting Edwention VoI, No V r 2001 HCS: Designing a Balanced Scorecard in a Knowledge-Based Firm Chris Moore, Beverly J. Rowe, and Sally K. Widener ABSTRACT: The purpose of this case is to enable you to design a performance measurement system using a balanced scorecard. This case is based on factual es and decisions faced by the real-world managers and employees of Holloway Consulting Services (HCS) (names and dollar amounts have been changed). HCS is a service firm that provides its customers with managed business solutions integrating outsourcing options with systems design and support. Curmently. HCs collects several financial and operational performance measures, however, Sharon Holloway, owner of HCS, is concened that these measures are not adequate for a firm that competes using intangible assets, especially human capital. Therefore she plans to implement a balanced scorecard in which performance measures are linked to the firm's strategy. This case provides you with the opportunity to develop a balanced scorecard that incorporates both traditional and nontraditional perfor mance measures within the strategic context of a knowledge-based firm INTRODUCTION haron Holloway methodically tapped the desktop with her pen as she gazed out the office window. The spectacular view of the sun rising over the moun tains escaped her notice. She slowly sipped her lukewarm coffee and mer tally ran through the situation once again. She had achieved every goal she had set in the last six years since she started Holloway Consulting Services (HCS). The company had become a strong competitor, developing customized information sys- tem designs that effectively integrate various outsourcing options with the client's existing internal support systems. Over the yeara she had helped her highly skilled, highly trained, and highly independent staff of consultants to become an excep tional team of experts, capable of handling the most arduous customer demands Development of strong interpersonal relationships had become the defining char acteristic of HCS. Thus, the company's success depended on the internal relation ships the staff maintained among themselves aa much as the external relationshipe Chris Moore is a Financial Analyst at Hewlett Packard, Beverly J. Rowe is on Assistant Professor at Colorado State University, and Sally K. Widener i sistant Professor at Rice Universi is We are grateful for the assistance provided by Jim Franzen, ooner of the firm depicted in this case study, We aso oppreciate constuctiuec Jeff Castereila, Denise Jones, Bill Mister, Anne McCarthy, Cherie O'Neil, Laurie Pont (associate editor), Don Samelson, Geraldine Shelton, to anonymous reviewers, and David E. Slout (editor)Explanation / Answer
Using Balanced Scorecard Approach for Performance Measurement by HCS:
Strategic Objective
Performance Measure
Performance Indicator
1. ‘Growing’ the company (Financial Perspective).
1. Net Income to assets ratio.
1. Percentage increase in net income.
2. Percentage increase in assets.
3. Amount of dividend paid to employees and/or shareholders or other stakeholders.
2. Analyzing customer needs (Customer Perspective).
1. Customer Satisfaction.
1. Total customer base.
2. Increasing number of new customers.
3. Number of repeat customers.
3. Knowledge sharing within the company (Internal Business Perspective).
1. Productivity.
1. Quicker completion of customer orders.
2. Improvement in quality of service.
3. Good customer feedback about service quality.
4. Encouraging a culture of openness and collaboration (Learning and Growth Perspective)
1. Employee Satisfaction.
1. Low Employee Turnover.
2. Increased dedication from employees.
3. Sense of belongingness among employees.
Core Values
Performance Measure
Performance Indicator
1. Balance (Learning and Growth Perspective).
1. Expenditure on Training and Development.
1. Use of excellent Resource Persons for conducting the Training Programs.
2. Frequency of Training Programs for employees.
3. Large Participation of employees in the Training Programs.
2. Authenticity (Internal Business Perspective).
1. Cycle Time.
1. Reduced time in order delivery to customers.
2. Increase in process efficiency.
3. Reduced time in responding to customer queries and complaints.
3. Priority of Service over Personal Interest (Customer Perspective).
1. Customer Loyalty.
1. Repeat orders from existing customers.
2. Willingness of customers to pay extra for high-end services.
3. Good Word-Of-Mouth.
4. Empowerment (Internal Business Perspective)
1. Sales from New Types of Services.
1. Orders from New Clients with New Types of Services.
2. Satisfaction of New Clients.
3. Development of new database about the new services.
5. Diversity (Learning and Growth Perspective)
1. Voluntary turnover.
1. Low voluntary turnover.
2. Long tenure of service among the employees.
3. Willingness of employees to give their best during the tenure of service.
Strategic Objective
Performance Measure
Performance Indicator
1. ‘Growing’ the company (Financial Perspective).
1. Net Income to assets ratio.
1. Percentage increase in net income.
2. Percentage increase in assets.
3. Amount of dividend paid to employees and/or shareholders or other stakeholders.
2. Analyzing customer needs (Customer Perspective).
1. Customer Satisfaction.
1. Total customer base.
2. Increasing number of new customers.
3. Number of repeat customers.
3. Knowledge sharing within the company (Internal Business Perspective).
1. Productivity.
1. Quicker completion of customer orders.
2. Improvement in quality of service.
3. Good customer feedback about service quality.
4. Encouraging a culture of openness and collaboration (Learning and Growth Perspective)
1. Employee Satisfaction.
1. Low Employee Turnover.
2. Increased dedication from employees.
3. Sense of belongingness among employees.
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