BSC adoption for N&S Ltd Contents.

BSC adoption for N&S Ltd
Contents
Introduction...........................................................................................................................................1
Background........................................................................................................................................1
Balance Score Cards...........................................................................................................................2
BSC Implementation..........................................................................................................................3
Business strategy Considerations in BSC...............................................................................................4
Benefits of BSC..................................................................................................................................4
BSC Development for N&S Ltd...............................................................................................................5
Recommendations.................................................................................................................................6
Conclusions............................................................................................................................................9
Bibliography.........................................................................................................................................10
Introduction
Background
N&S Ltd. Is a manufacturer of car types from Victoria and has a market
capital of $3bn. It has 300 people working in the organization. The
company has been struggling to keep up with its expansion because of
some problems. To identify the problems faced by the company, an
internal survey was conducted. It was found that 95% of the company
employees lacked strategic insight. A management consultant was hired
for services who recommended adoption of BSC (Balanced Score Card) if
the company wanted to improve upon its strategic performance. With
BSC, the company could document its strategy by identifying its tangible
components which would make it easier for its employees to understand
the strategic goals of the organization and work towards them.
This report guides the company through the adoption of BSC model and
contains analysis of the model as well as of the company from the four
perspectives defined in the model. Based on this analysis, certain
recommendations have been made for improvement at the end. It
contains details of strategic objectives of N&S, costs of BSC, strategic
considerations of the business and the steps to apply BSC.

With adoption of this model, the company can expect to gain more
transparency into its strategic processes which would help its staff in
understanding business objectives as well as their role in achieving them.
BSC model explored an organizational strategy from four perspectives
including customer, financial, internal, learning and development. The
report presents recommendations with strategic targets defined for
workforce to follow (Garengo, 2012).
Balance Score Cards
BSC is a strategic tool which was developed by two business strategists
including Robert Kaplan and David Norton with an aim to measure the
organizational performance in terms of its capability to achieve its
strategic vision through exploration of its intangible components like
processes. The model uses performance indicators that quantify the
intangible benefits to enable this measurement. First, the vision and
mission of a company are identified and then their strategy is reviewed
from four perspectives including customer, financial, internal business,
and learning & growth. The content that comes under this evaluation from
each perspectives have been explained below:
Financial Perspective: This perspective of BSC model evaluates an
organization on its attractiveness to investors. The operational
performance and sustainability are evaluated using industry benchmarks
such as market share and profits. Financial performance is already used in
practice for measurement of the organizational performance but BSC goes
into depth so that investors can decided on if the company is good
enough to invest and would get them profits desired by giving them the
evaluation of the current business scenario (Niven, 2006).
Customer Perspective: In this perspective of BSC model, the market
requirements are explored and quantified with targets to achieve. These
could be related to products or services such as measures of pricing
strategy or product quality. When a company is able to achieve these
targets, it looks more desirable even to investors.
Internal Processes: Any company runs on its internal processes that
have to be efficient enough to make the business perform well enough to

achieve its strategic objectives. If the company needs to achieve its
objectives, its processes should be aligned to the needs of its stakeholders
including customers, employees, and shareholders. This part of BSC
explored internal business processes and their potential to bring this
alignment.
Learning and growth: Learning and growth of the employees of the
company can ensure long term sustainability in an organization as the
workforce is responsible for executing all activities planned. A workforce
must be agile so as to develop the capability to adapt as per the changing
market dynamics to keep the business sustainable by keeping
improvement. This BSC perspective can help company identify
appropriate growth strategy to achieve competitive advantage and also
sustain it (Niven, 2005).
BSC Implementation
For implementation of BSC model, the components of the different
perspectives of BSC have to be identified and then connected to enable
cohesion. Each perspective would include records of business objectives,
performance indicators, financial or non-financial criteria, internal and
external perspectives. The first step to its implementation is identification
of the broad strategic goals of the organization that could be reflected by
vision and mission of the company. Once these objectives are identified,
performance indicators including critical success factors for each
objectives are identified (Kaplan & , 2006).
The expectations of the stakeholders considering each business objective
are then explored and the critical success factors are matched to them.
These factors are the indicators of organizational performance and thus,
can be used for monitoring its performance. This usually requires an
interaction between the company and its stakeholders so that their needs
and expectations can be understood. The stakeholders include the middle
and senior level management of the organization. This exercise helps
company connect the personal objectives of managers with the business
objectives of the organization so as to help them have a higher motivation
to fulfil strategic objectives of the organization. Personal goals can be set
for them accordingly and key performance indicators can be defined
(Malina & Selto, 2001).

Business strategy Considerations in BSC
The BSC model can help organization measure its performance from the
four perspectives. A number of strategic considerations are needed when
doing this in each category. For instance, the learning and growth
perspective of the model needs the staff to have knowledge gained
through training. More considerations could be training needs of
employees, job satisfaction in staff and the staff turnover. The
performance metrics can be defined for the objectives. For instance,
considering the job satisfaction as the factor, a metric could have the
target like a minimum rating by employees. Companies can take
measurement of these ranks quarterly. Financial perspective should have
measure of how funds are invested effectively to achieve business
objectives (Ram, 2019). Key considerations in this perspectives can be
cash flow and returns on investment.
Strategic considerations for internal business processes could be
automation, functional activity or process alignment. For the customer
perspectives, considerations could be for sales, positioning in the
consumers mind, customer satisfaction, customer retention, brand
perceptions, customer trust, and product reliability. The objective would
remain ensuring that customers perceive the company, its products and
services in a positive manner so that trust can be developed in them and
loyalty can be gained.
Benefits of BSC
A number of benefits that BSC brings to the company include:
Improved planning: The company can do better planning as BSC helps
it identify key strategic objectives and thus, define the actions needed to
achieve them. With the plan better aligned to the strategic objectives the
company can improve its performance.
Improved Communication: As BSC provides an opportunities to go deep
into the perspectives of customers and of the internal processes, both

internal and external communication objectives are taken care of and
thus, the company can achieve better communication capabilities
(Becker, et al., 2001).
Strategic Alignment: With performance metrics defined for all the
objectives covered in each perspective of BSC, the company would have
its processes, projects, activities, and resources well aligned with the
strategic objectives. The metrics make activities actionable and
measurable.
Performance Monitoring: With metrics defined for every objective, the
company can keep measuring how it performs in each area of BSC model.
The observed performance is monitored and reported which allows
managers to make a comparison between planning and achievement such
that any deviations can be identified and improvements can be done.
BSC Development for N&S Ltd
The company has a vision to reach the top level in the tyre market in
terms of sales in the next five years of its operations. Its mission is to
increase sales and profitability of the company. The company needs to
align its communication processes and workforce to the strategic goal of
revenues and profitability. With BSC, the employees of the company
would be able to understand the role their efforts play in achieving these
goals. The model defines performance parameters for each perspective
including financial, customer, learning, and internal processes.
Financial Perspective: In this perspective, the financial performance of
the organization can be measured using a number of metrics including
returns gained from recent investments made by N&S Ltd, the profits from
current operations, and funds invested in research and development
activities (Banwet & Deshmukh, 2006).
Customer Perspective: In this perspective, the market performance of
the organization can be measured using a number of customer related
metrics such as customers aquired, rate of customer retention, and
customer loyalty. It can help company understand how its products and
services are perceived by customers. N&S Ltd wants to have customers
who trust the brand and consider it reliable. To understand how customers

feel about the products and services of the company, N&S can conducted
a survey on its customers to test their loyalty and rate of satisfaction.
Measures of number of customers acquired as compared to previous
years customers can help company understand if it is able to grow its
customer base. The figures of market share would help company
understand its place in customers minds as compared to its competitors
(Rohm, et al., 2016).
Learning and Development: In this perspective, the employee related
data can be measured using a number of metrics including employee
satisfaction, rate of employee retention, number of training programs
given to staff, and new skill development in employees compared to
previous years. A company can use survey to measure the level of
satisfaction among employees. The turnover rate would suggest how
capable is N&S Ltd in retaining its employees (Burney & Swanson, 2010).
The company may want to have a satisfaction rating above four out of five
and a target of reducing its turnover by 40% as compared to the previous
year. The number of programs that company runs for the training and
development of its employees can tell how effective is the company in this
area (Utama & Utama, 2017).
Internal Processes: In this perspective, the internal processes
performance can be measured using a number of metrics including
projects executed in an year, projects completed within scheduled time,
quality standards met, rand resource utilization. N&S can have its project
processes measured and compared to the initial plan to find out how
many projects could be completed on time. Quality benchmarks defined in
the international standards can be used for defining the quality
requirement of the project. The metrics of resource utilization would tell
how effective has the company been in utilizing its resources for achieving
its strategic objectives.
Recommendations
Based on application of BSC model to N&S ltd for identifying performance
measurement metrics for the company on each of the BSC perspectives,
certain recommendations can be made for the company to ensure that it
is able to adopt BSC effectively. These include:

Financial Perspective
Objectives: The objectives of N&S Ltd is to ensure that it is performing
well on the financial front. Certain objectives can be defined to gain this
understanding including increase in its profits compared to previous year,
returns gained from the investment done for research and development,
and increase in the revenues of the company gained from sales.
Targets: To achieve these objectives, the company can set some targets
that would measure revenues and profits of the company. The profit
target could be a minimum of 10% from the sales. To ensure that R&D
delivers results, company can work to target 25% of profits from these
activities. A revenue growth of 10% can be targeted by N&S every year.
Action Plan: To increase the company profits, N&S can reduce wastage
in production which would help save cost and thus, increase profits. It may
also take some other cost control measures to keep check on the
organizational costs by making most optimum use of its resources. For
revenue increase, the company can target to increase those customers
who consumer products and services that are high priced. Research and
development activities can help company come up with new products or
improvements in its old products such that more products can be sold or
the new upgrades could be sold at higher prices. With this company can
get more returns from R&D investments.
Learning and development
Objectives: The objectives of N&S Ltd is to ensure that employees of the
company are satisfied, its attribution rate is reduced and employees are
able to gain more skills over time. In each of these areas, the performance
of the organization can only be measured if they are measured using
specific metrices and targets are set for them.
Targets: The target for employee satisfaction rating could be a minimum
of 4 out of the rating of five. The target for employee retention could be
reduction in the rate of attrition by 40% as compared to the previous year.

The target for training programs could be at least 10 different skills
imparted in the company employees.
Action Plan: To reduce attrition rate in the company, senior
management can be involved in providing motivation to their subordinate
through appraisal and development programs. Implementation of an
employee management system would further help company define roles
and responsibilities of people clearly so that the productivity of the staff is
enhanced. The company would perform a training needs analysed and
according to the needs identified in the process, would arrange for the
training programs for its employees.
Customer Perspective
Objectives: The objectives of N&S Ltd from the customers perspective
are increase in customer base, customer satisfaction and their loyalty. To
achieve these objectives, certain metrics can be used such as increase in
customer base, customer satisfaction rating, and customer loyalty.
Targets: The targets can be set for customer satisfaction rating which can
be achieved through survey. N&S can target 9 rating as an average to
achieve in this survey to reflect satisfaction in customers. Loyalty in
customers can be measured by the number of customers who were
retained from the previous year. The company can target to retain 40% of
the customers from the previous year. The new customers acquired
should increase the customer base by 20%.
Action Plan: In order to achieve the defined targets for customers
perspective, the company can take a number of different steps. It can
implement a CRM system that would enable to keep the records of
customers and use analytics to get insights into them. To enhance
customer satisfaction and loyalty, the company can work to improve their
customer service by preparing employees. To increase the customer base,
the company can invest more into marketing its products, services and
the brand.
Internal Perspective:

Objectives: The strategic objective o internal processes is to ensure that
the companies actions are aligned with its strategic goals. Specific
objectives that N&S would have include optimum resource utilization,
increased number of projects completed within budget and within defined
schedule, and ability to execute more projects over the year than the
previous year.
Targets: To set targets for the objectives identified, the company can
use certain metrics such as resource utilization, project execution count,
and project performance rating. For each of these measures, N&S would
have targets. Company can aim to eliminate the wastage in processes to
improve its resource utilization. A target could be to complete 80% of the
projects within the defined timelines and budget. The number of project
that company can handle should increase by 20% in the current year.
Action Plan: In order to achieve the defined targets, the company needs
to take certain actions. To optimize its resource utilization, the company
can have a project management tool used for tracking the progress and
keeping check on it to ensure that resources are best utilized. Portfolio
management can be used to ensure that resources utilized across
different projects are well distributed without any conflicts and are able to
deliver the results. The project manager must ensure that the resources
are neither too stressed because of load of work nor should they be
underutilized. Company can hire more people in the team to increase the
speed of work so that more projects can be delivered by the company in
the current year.
Conclusions
The report explored the idea of adoption of balanced score card method in
an organization to ensure that the company is strategically aligned with
its objectives. A Victoria based omcpany selling rubber Latex called N&S
Ltd was chosen in the case and the current situation of the company was
explored. To apply the BSC model to the case, the four key perspectives
of the model including financial, customer, internal and development were

explored in depth and targets were identified for the company for each
category. It was found that with objectives identified for each of these
perspectives, the company can fairly create tangible metrices for
intangible objectives and then have them measured. Also, the model
helped in coming up with an action plan to addressed concerns in each of
the areas as well achieving defined objectives in these areas. The
company can expect to improve its strategic performance by acting upon
these plans that would help them achieve the strategic targets. A number
of different measures were recommended such as implementation of
customer management solution, employee management system, increase
in marketing, training and development activities, and so on. With these
company can expect to achieve its targets like increase in customer base,
increase in employee retention rate, increase in customer satisfaction
rating, and increase in revenues over the year.
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