Critical Success Factors (CSFs) And Balanced Scorecard In GPI

Summarizing the process that Deb Young used to develop a balanced scorecard for GPI

Great Persons Inc. is a not for profit organization which was originally formed to provide services to the local community but which gradually turned to be a service provider in addition to the original goal. Its main services include providing health equipment, residential services to disabled person, support services to children, information and referral services, consultation and coordination services, day-care services, conducts children education programs, etc. The origination of the idea of the balanced scorecard is attributable to the Board meetings in which the question was raised that the performance of the organization has only been analysed using financial parameters but going forward the same should be done by some additional non-financial information (Belton, 2017). Profit and finances are just supporting to meet the end and primary objective of providing services to the disabled individuals. In the bid to implement the balanced scorecard, the critical success factors were also identified and then they were grouped together based on the likes by the development team.

The primary question here is what is meant by Balanced Scorecard and what is its use? The answer is a management framework or simply a strategic tool, which transforms the organization ideas and perspectives into a number of performance objectives, which are to be implemented in to all the levels of organization, measured, and monitored continuously. It can be changed or modified as per the requirement of the organization (Bizfluent, 2017). The best part about balanced scorecard is that it considers all the areas of development and performance and thus gives the organization as well as the manager a holistic view of what should be the future course of action. It considers financial as well as non-financial information like those of customer satisfaction, employee growth, corporate governance and product innovation, etc.

The Balanced Scorecard measures and analysis the performance from four different perspectives. The 1^st being financial analysis which measures the parameters like profit, gross profit, return on investment and assets and sales growth. The second parameter is customer analysis, which is measured in terms of customer satisfaction and retention (Alexander, 2016). The third parameter is internal analysis, which shows how the business strategic goals are linked with the business processes, and finally the fourth parameter is learning and growth analysis, which includes all the other factors like the employee satisfaction, retention and development of information system within the organization.

Deb Young was one of the directors of the company who was of the opinion that fundraising was one of the activities, which was needed to be successful and to grow and operate. He was of the view that the necessary funding will help GPI grow in the future as well as in regular operations. Thus, he thought of evolving a balanced scorecard approach for driving the business operations in a certain way (Choy, 2018). It is a kind of a mechanism of communicating the objectives and goals of the organization in a concrete manner.

The process to develop a balance scorecard is given below:

1. The first step was to gain the support from the top management of the company that included the executive directors and the core management team. The main task of the senior management would be to implement the balance scorecard. Approval from the senior management is very important for the company, and for the implementation of the balance scorecard of the company.
2. The second step was to develop a team that would help in the implementation based on the overall goals of the project and the scope. The team members of the company should have the desired qualities that would help in the implementation of the project.
3. The third step included increasing awareness with respect to the balance scorecard among the various members that are involved in execution and implementation of the same. It is important that they know what are the overall benefits of having a balance scorecard is and how would it be beneficial to the company(Delone & Mclean, 2004).
4. The next step was about the CSFs and understanding the overall limitations with respect to them that would help the members in understanding, which are the areas in which they need to function. It was important that the CSFs and the measures that were selected were critical to the overall success of the project. If too many measures would be, there it would render the overall project meaningless.
5. The next step was to identify the overall performance management and target. Targets are very important as it helps teams to understand what the working are for and in what directions do they need to put in their overall efforts so that the efficiency is the most. Targets are important for the company and the plan to function effectively.
6. Delegation of the overall work is the next important step. It is important that appropriate authority and responsibility be defined so that team members know who is responsible for what and for that each CSFs must be assigned to specific individuals in the team. The team member who is responsible must collect the data about the CSFs and then compare with the target data so see how the products are functioning. In case there are any issues then such people should be held responsible for that issue with respect to the company(Dumay & Baard, 2017).
7. The final and the most important steps is to define the overall implementation plan, to define a schedule when the balance score card will presented to the board of directors of the company and how would it be beneficial for the company. The team would also initiate how to meet the overall goals of the company.

Several advantages and disadvantages accrue to the organization because of implementation of the Balanced Scorecard technique. These can be short term as well as long term. Some of these advantages for GPI are:

1. The company, GPI uses the balanced scorecard to provide the comprehensive view of all the organizational goals into a single chart divided and allocated based on the area of operation. This also has a role in the segregation of activities and thereby assigning the individual activities and roles to individuals. In a way, this helps in monitoring and measuring the individual’s performance with the set KPIs and thus helps in knowing where the organization is as compared to where the organization should be.
2. The company is also able to achieve improved long term sustainable financial performance through a series of measures as the activities are planned and executed in such a way that the long term vision is achieved(Trieu, 2017).
3. It helps the company in bridging the gap between the vision and mission statement of the company and the goals set on the daily basis. The main goals of the organization includes satisfying the customers by giving high-level technical support with increased performance. The main intention is to respect the service level agreements and to align with it. This can help in retaining the customers and creating the new ones.
4. Balanced Scorecard also helps in raising the levels of innovation within the organization as well as bringing in new process improvement methods. This may include six sigma models, or just in time or lean manufacturing models in an urge to achieve the corporate goals(Vieira, et al., 2017).
5. This approach has proved instrumental in the past as well in contributing to company’s goodwill through improved customer satisfaction. This includes retaining the existing customers through increased levels of performance, referral of new ones, introduction of new business and improved processes leading to enhanced reputation.
6. It helps in raising the morale of the employees when they are aware that there are proper ways and techniques to measure and reward their efforts and those individual stakeholders are being attended for their targets and achievements(Werner, 2017).
7. Finally, it can be said that one of the most critical advantages to GPI has been to excel in the core competencies, as balanced scorecard is a tool or a cockpit, which helps in monitoring the same.

Identifying advantages and disadvantages of the balanced scorecard at GPI

Some of the disadvantages of implementing balanced scorecard technique in GPI are mentioned below:

1. The balanced scorecard method can be very subjective in nature at times. The main issue with this approach is that it is qualitative in nature and cannot be quantified. Thus, it renders the process useless at times of surveys and at the time of management opinion. Same is the issue which is being faced at GPI.
2. Balanced Scorecard depends on how the things are being interpreted at times by different persons and thus is very abstract in nature. It is because of this reason that the company fails in achieving the goals stated in the balanced scorecard when compared with the current state of affairs.
3. Since GPI is already suffering from the workload pressure, this additional work of maintaining, monitoring and updating the balanced scorecard may prove to be a challenge for the company(Zhou, 2018).
4. This may also have a negative impact on the employees and the decision to implement balanced scorecard may backfire as the employees may feel that they are being monitored and tracked too closely by the management and thus they have lost freedom and flexibility.
5. One other aspect of implementation of the balanced scorecard in the organization is it may be a costly affair for the company, which already is in the fund crises and needs additional funds for operation management. It is generally seen that the balanced scorecard technique is usually being applied by the hugely profitable organizations as there is a huge upfront cost involved but in the given case, the organization GPI is a non-profitable organization.
6. Finally, there is also a need of the dedicated personnel or a dedicated team to maintain and consolidate the balanced scorecard on a regular basis without which it would lose its relevance and effectiveness(Kuhn & Morris, 2016).

The balanced scorecard of the company GPI has been formed based on the vision and mission goals of the organization.

                               

                               

Balance scorecard will help in preparing the products with respect to the demands and desires of the customer. The customers are the main people for which the company is functioning, thus having goals that are regulated towards them is very important.

Few of the major CSFs with respect to client perspective are-

• Increasing overall awareness among the community members.
• Development of new and improved services(Heminway, 2017).
• It will be helping in building community support.
• It will help in providing services that are more reasonable to the community.
• Better and effective customer support and after services that would help in building customer loyalty.

                                                     

Financial success is very important for any company and thus having CSFs that help in analysing the overall financial growth and development of the company is very important. Few of the major CSFs about financial success are-

• Financial solvency and going concern should be established.
• More revenues over expenses(Jefferson, 2017).
• Better financial ratios like the profitability and liquidity ratios that helps in analysing the overall performance of the company.
• Better returns to the shareholders and the investors of the company.
• Overall costing of the project needs to be analysed.
• Overall investment strategies of the company need to be analysed.

Internal controls and internal functioning is very important for any company. It would help in analysing that the company is functioning better, there is less wastage, and better growth opportunities are established. Few points of CSFs with respect to this are-

• Proper client tracking software needs to be established within the company.
• Proper collection of data should be there which must be concrete and definite.
• Referrals should be processed timely so that there is no wastage.
• Proper internal control audit should be conducted on timely basis.
• Proper allocation of funds to each department must be done.
• Proper allocation and delegation of work/duties should be there within the system.

Doing the work is as important as maintaining the overall quality of the work is. The balance scorecard helps in establishing that and helps in delivering the project and meeting the targets along with maintenance of quality. Few of the CSFs that are applicable with respect to this point are-

• Better selection of the staff and better retention and recruitment policies would be there.
• There should be positive motivation in the overall process.
• The overall quality should be improved(Linden & Freeman, 2017).
• Better awareness among the team members with respect to the work should be there.
• Quality checks should be conducted on timely basis(Saeidi, 2012).
• The senior managers should also be trained with respect to the quality of services needed.

Conclusion:

From the above study and analysis, it can be seen that the company has been able to effectively implement the balanced scorecard technique in its set up and has been able to achieve the objective of measuring the performance of the organization and its resources based on non-financial information instead of relying only on the financial information. The process being followed by GPI to implement the same was very streamlined and process based besides being strategic. The company has both the advantages as well as disadvantages but the important perspective is achieving the mission and vision in the short run and the long run respectively.

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