Improving Business Process

One of the more challenge aspects of developing an orgainzational scorecard along the lines of the Balanced Scorecard (see posting on Balanced Scorecard) is how to set goals and metrics around improving business process. Here are several measure categories that might help you.

Simplification: this measure focuses on making production easier. It may or may not improve quality or achieve any of the other measures below, but at the very least, simplification should not decrease benefits to customers.

Cost-savings: this measure focuses on changing processes or introducing new ways of doing things that save money. Cost savings can either reduce our cost to revenue ratios or the monies saved can be reapplied to other activities.

Time-savings: this measure focuses on changing processes or introducing new ways of doing things that save time and allows time to be devoted elsewhere.

Quality Improvement: this measure focuses on identifying changes in processes and systems that result in a better product and service. Such changes may or may not meet any of the other criteria. In fact, a quality improving innovation could at times involve, for example, spending more time and/or money if doing so sufficiently increases product value to customers.

Problem Solving: this measure focuses on solving problems or issues that impact negatively on production and delivery of services. This measure could very well relate to the others listed here, but could also address barriers or issues that are separate from the others herein – for example, addressing a security or safety concern.

Decreasing Risk: this measure focuses on making changes that decrease risk to the organization and/or employees, customers, and other stakeholders.

The Balanced Scorecard

The Balanced Scorecard was developed by Norton and Kaplan. It focuses on identifying global measures in four quadrants of organizational activity, which are used to assess past performance, monitor current performance, and the extent to which current performance optimally positions an organization for future success.

These quadrants represent “perspectives” on performance from the viewpoint of the Customer(s), Internal Business Processes, Finance, and Learning and Growth.

More than an evaluation tool, the Balanced Scorecard provides the organization with a strategic management touchstone that informs business planning, identifies performance strengths and shortcomings, frames action and implementation plans, and provides the Board of Directors with a high level governance resource to policy development and strategic discussions.

The Scorecard also provides the organization with a global perspective of performance that can be used in the development of accountability focused employee appraisals.

24 reasons’ Mark Holmgren has led the development of organizatonal scorecards for two major charities and has also performed numerous evaluations for various non profits over the years. For more information, contact Mark at here: email.