Development Of Balanced Scorecard And KPIs For LFR
- December 27, 2023/ Uncategorized
Financial Perspective
Answer to task 1 (a)
Development of a balanced scorecard for LFR at the organizational level
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Objective |
Measures |
Targets |
Initiatives |
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FY 1 |
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Financial perspective |
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ü ROCE ü Growth Attained in Revenue ü Rate of utilization of firm’s assets ü Functional Cost |
10% 8% 75% $180 |
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Customer |
Enhancing loyalty of the clientele |
ü Rating satisfaction of clientele |
75% |
Loyalty program for customers |
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Internal Processes |
Growth in the business – Capitalization of diverse deregulation prospects – Maximization of diverse trading prospects – Designing innovative products as well as services – Leverage company’s established research and development (R&D) system Constant Support of the public – Positive management of diverse associations – Delivering certainty regarding dependable services – Communication with the clientele Customer Service Excellence – Optimization of utilization of asset – Maximization of return obtained from allotment of assets – Administration of Firm’s Cost – Enterprise wide risk administration |
ü Revenue acquired from company’s products as well as services ü Percentage of Revenue obtained from services ü NPV of diverse pipeline products as well as services ü Percentage of delivery ü Percentage capacity utilization ü Productivity enhancement of employee ü Percentage of decrease in firm’s cost |
9% 8% $300M 90% 85% 3% 4% 94/100 90% |
Enhancement of overall firm’s infrastructure Coalition Programs Defensive maintenance Service Dispatch computerization Marketing functions |
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Learning as well as Growth |
Market Driven capability Contentment of members of the staff Leadership of global standard |
ü Tactical coverage ratio ü Hours devoted for tactical training ü Rating for contentment of members of the staff ü Efficacy of ratio of leadership (measured using 5 points scale) |
74% 10 5 4 |
Competency profile Reimbursement related to performance Training for leadership |
Answer to task 1 (b)
Development of a measure in the form of a KPI for each objective recognized
Financial perspective
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Objective |
Comments |
KPI |
Comments |
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Optimization of returns earned from the corporation |
Accomplishment of growth by enhancement of firm’s profitability can help in optimization of return (Valmohammadi & Ahmadi, 2015). |
ROCE, Growth Attained in Revenue |
-Return on capital employed can help management of the firm in understanding the rate of return earned by the firm out of the employed capital (Jahanshani et al., 2014). In addition to this, rate of growth in revenue also indicates the compound annualized growth rate in revenue (Youngran et al., 2017). |
Customer Perspective
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Objective |
Comments |
KPI |
Comments |
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Enhancement of loyalty of clientele |
The enhancement of loyalty of customers can help the company to retain the existing customers of LFR |
Rating satisfaction of clientele |
The feedback gathered from the clientele can be rated for proper appraisal of the level of customer of the customers (Agnihotri et al., 2016). |
Internal Processes
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Objective |
Comments |
KPI |
Comments |
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Attainment of business growth |
Growth can be attained by LFR by appropriate capitalization of different deregulation prospects, maximization of different trading opportunities and designing of ground-breaking products as well as services (Tjader et al., 2014). |
Revenue derived from firm’s products and services |
Revenue from different business segments of LFR can help in understanding the rate of growth of business (Tjader et al., 2014). |
Learning and Growth
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Objective |
Comments |
KPI |
Comments |
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Contentment of employees of the firm |
Satisfaction of the employees of the firm can help in the development of the business of the firm LFR (Perkins et al., 2014). |
Hours dedicated by the firm LFR towards training |
The total number of hours dedicated towards tactical training can help in the development of the career of staff and lead to contentment (Tjader et al., 2014). |
Description of internal perspective measures that is appropriate at an organizational level
The internal perspective helps in identifying the area in which the firm needs to excel at. The internal perspectives that has the goal of enhancement of technological potential, manufacturing excellence, design productivity, introduction of new products and excellence in customer service for attainment of growth potential of the corporation (Jahanshani et al., 2014). Particular objective of delivering a continuous stream of diverse attractive solutions to the customers can be attained by customizing the products as well as service of LFR as per the needs of the customers identified at the micro level (Perkins et al., 2014). Therefore, the measures for analysing the internal perspective at the individual store level of LFR might not be the same as that of the organizational level (Tjader et al., 2014).
Development of two KPIs that can be appropriate to include in the internal procedure perspective of a balanced scorecard for the individual stores
- Reliability of Index – The reliabilitycoefficient essentially delivers an index that talks about the relative impact of both true as well as error scores on specifically obtained scores (Hoque, 2014). In general, the reliability coefficient can be referred to as the ratio of particularly score variance to specifically the entire/overall variance of test score (Valmohammadi & Ahmadi, 2015). This index can help in understanding the scores of internal processes at the individual store level of LFR and at the level of organization (Mutale et al., 2013).
- Customer satisfaction rate- Customer satisfaction rate that is also referred to as the CSAT can be considered as an additional KPI for the firm LFR. This indicator can be treated as a metric that asks the clientele of the firm to properly rate the level of contentment of the customers with the business products as well as services (Valmohammadi & Ahmadi, 2015). Essentially, this metric can help in providing a score that can present an average rate of the responses of the customers. This in turn can help the management of the LFR in understanding the level of efficacy of the internal procedures of the business of LFR (Jahanshani et al., 2014).
For each measure included explain the way it links back to the strategy of LFR
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KPI |
Comments |
Link to DDR’s strategy |
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– Reliability of Index |
– This index can assist in the process of understanding the scores attained for the internal processes at particularly the individual store level of LFR as well as at the organization level (Saeidi et al., 2015). |
This can help in understanding the efficacy of the internal procedures of the firm both the at the individual as well as company level (Youngran et al., 2017). In order to evaluate whether the firm was attaining its objective of delivering reliable, as well as responsive supply, LFR turned to assess internal procedures both at individual as well as corporate level |
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– Customer satisfaction rate |
This is a measure/dimension that can help the management of the firm LFR to understand the extent to which the products of the firm along with the services can meet or else exceed the overall expectations of the customers (Saeidi et al., 2015). |
Keeping all the clients of the company LFR can be considered to be very important (Saeidi et al., 2015). However, the only way to get to know about the level of satisfaction of the customers of the business id to undertake a survey for analysing the level of satisfaction of the customers. Thus, this dimension can help the management of the firm to understand the efficacy of the internal procedures of the firm and assist in development of the same (Agnihotri et al., 2016). An effective survey of the customers can help the management of LFR to understand how contented the customers of the company and relate the same to product and service delivery efficiency, experience of the customers as well as overall contentment. |
References
Agnihotri, R., Dingus, R., Hu, M. Y., & Krush, M. T. (2016). Social media: Influencing customer satisfaction in B2B sales. Industrial Marketing Management, 53, 172-180.
Hoque, Z. (2014). 20 years of studies on the balanced scorecard: Trends, accomplishments, gaps and opportunities for future research. The British accounting review, 46(1), 33-59.
Jahanshani, A. A., Hajizadeh, G. M. A., Mirdhamadi, S. A., Nawaser, K., & Khaksar, S. M. S. (2014). Study the effects of customer service and product quality on customer satisfaction and loyalty.
Mutale, W., Godfrey-Fausset, P., Mwanamwenge, M. T., Kasese, N., Chintu, N., Balabanova, D., … & Ayles, H. (2013). Measuring health system strengthening: application of the balanced scorecard approach to rank the baseline performance of three rural districts in Zambia. PLoS One, 8(3), e58650.
Perkins, M., Grey, A., & Remmers, H. (2014). What do we really mean by “Balanced Scorecard”?. International Journal of Productivity and Performance Management, 63(2), 148-169.
Saeidi, S. P., Sofian, S., Saeidi, P., Saeidi, S. P., & Saaeidi, S. A. (2015). How does corporate social responsibility contribute to firm financial performance? The mediating role of competitive advantage, reputation, and customer satisfaction. Journal of Business Research, 68(2), 341-350.
Tjader, Y., May, J. H., Shang, J., Vargas, L. G., & Gao, N. (2014). Firm-level outsourcing decision making: A balanced scorecard-based analytic network process model. International Journal of Production Economics, 147, 614-623.
Valmohammadi, C., & Ahmadi, M. (2015). The impact of knowledge management practices on organizational performance: A balanced scorecard approach. Journal of Enterprise Information Management, 28(1), 131-159.
Youngran, S., Thai, V., Grewal, D., & Kim, Y. (2017). Do corporate sustainable management activities improve customer satisfaction, word of mouth intention and repurchase intention?: Empirical evidence from the shipping industry. International Journal of Logistics Management, 28(2), 555-570.
