Balanced scorecarding as a business process has been around since its creation by Kaplan and Norton in 1992. However, the automation of this process and more specifically the IT scorecard industry has not been overly successful to date.
The problem is that many so-called technology enablers were and still are prescriptive, proprietary and expensive and take a long time to filter their way through the organisation. Keith Jones, MD of Harvey Jones Systems, gives another option.
Market perception has it that deploying scorecard solutions requires that clients engage with expensive consultants for nine months or more to perform a full analysis of the business and create a enterprise vision for deployment. That perception is wrong because it is based on the traditional approach to scorecards.
Businesses are trading now and waiting for a solution means they simply do not get the benefit right away. Deploying a performance management solution immediately is the only remedy, but the big-bang approach is also potentially hazardous to a company`s bottom line.
Deploying a solution right away means that it may not be the Holy Grail of performance management solutions, but starting right away and developing the solution over the nine months that it would ordinarily take to complete the analysis is definitely going to speed along the implementation. This kind of deployment should be issues-based and focused on delivering a recognisable business benefit early on in the process.
Benefits companies can expect off the bat include better decision-making and better immediate strategy execution in a short timeframe, not next year or the year after that. The solution will also be able to grow and evolve with the business as it learns and flexes according to market pressures. This approach also not only allows businesses to take control of the process themselves but if they treat the deployment as a learning process, the resulting solution will be cost-effective, deep-rooted and effective for that organisation.
The approach companies should employ for immediate benefits that will have their solution more suited to their business on absolute completion means using business intelligence (BI), already a component of many large companies, and approaching performance management process from the bottom-up/top-down perspective. Identify where the data is, if it is accessible, then determine where a performance management process would provide the most significant benefit for the least effort. Pick the low-hanging fruit and the rest will follow. It allows a slow cultural change within the organisation, something that a successful performance management solution requires. With that comes a greater chance of success. This issues-based approach also allows an organisation to identify where to stop - if the returns are diminishing the end point is just as crucial to identify as the starting point.
Clients need to optimise their business performance immediately and cannot afford to wait for a big bang approach, it will be too late. Information delivered without transparency and drill-through is likely to create more frustration that not having the data at all. Managers need to be able to follow a train of thought through their business, not follow a trained thought process. Fixed reports and drill-down structures cannot lead to a learning organisation, whereas if the users had time gradually to work their way into processes they would naturally be able to retain more knowledge and make better use of the solution. In essence, transparency and drill anywhere must be supported to have users buy into the solution.
Another concern for local clients is that due to varying skill levels and a shortage of more qualified skills, the solution needs to be open. Markets abroad have larger and more homogenous working environments while local markets are volatile, thereby making performance management even more important.
To compete or perform effectively, people need to know what is happening in all aspects of their organisation all the time and this needs to be achieved as quickly, efficiently and cost-effectively as possible. Reliance on key skills, large foreign currency exposure and technical re-skilling processes therefore need to be minimised.
Smaller budgets and more focus have become the order of the day as opposed to the big-bang approach of yesteryear, with attention to return on investment as a key driver. That is not what the management consultancies want to hear, less so preach, but it is the reality in the local market. Bottom-up/top-down deployments are the way forward, not multimillion-rand, company-wide projects that not only deliver a tangible financial reward after a long implementation cycle, and are often out of date when delivered.
Purists might argue that in an ideal world this would not be the best solution, but market realities dictate that smaller, iterative deployments and an evolution of the solution will best deliver benefits every step of the way.
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