Report on Commonwealth Bank of Australia's Balanced Scorecard Approach

This report provides a comprehensive analysis of the Commonwealth Bank of Australia's (CBA) Balanced Scorecard. It examines the adoption and implementation of the Balanced Scorecard, highlighting key objectives such as financial performance, customer satisfaction, internal processes, and learning and growth. The report identifies challenges faced during implementation, including poorly defined metrics and a lack of formal review structures. It outlines CBA's long-term goals, focusing on customer service, financial security, and technological advancements, and identifies stakeholders like customers, community, and investors. The report details the Balanced Scorecard approach, covering financial, customer, internal business process, and learning and growth perspectives. It includes a strategic map, KPIs, and KPDs, while also addressing issues that arise during implementation, such as uncertainty and the importance of clear metrics. The conclusion emphasizes the significance of the Balanced Scorecard for CBA's financial and non-financial measurements and the role of KPIs and KPDs in its implementation.

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Report on commonwealth bank of Australia
Name of the student
Name of the assignment
Author’s note

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Table of Contents
Introduction................................................................................................................................3
1. Adopting and implementation of Balanced Scorecard of Commonwealth Bank of Australia
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2. Problems faced while implementing the Balance Scorecard.................................................3
3. Long Term Goals of Commonwealth Bank as well as Stakeholders or Clients of
Commonwealth Bank.................................................................................................................4
4. Balanced Scorecard Approach of Commonwealth Bank of Australia...................................4
5. Strategic map of Commonwealth Bank of Australia.............................................................6
6. Indicate KPI’s and KPD’s......................................................................................................7
7. Identification of issues that takes place while implementing balanced scorecard.................8
Conclusion..................................................................................................................................8
References..................................................................................................................................9

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Introduction
The balanced scorecards of the banks are very important and has great impact on the
performance of the banks. Here, the Commonwealth Bank of Australia is taken for study.
There are some issues faced by the bank and have taken the measures to implement the
proper strategy map and the balanced scorecard. There are group of investors in the bank
which helps to attain the long term goals set by the bank.
1. Adopting and implementation of Balanced Scorecard of Commonwealth Bank of
Australia
The balanced scorecard of the bank is very important to understand its performance.
The balance scorecard is a measure to learn and grow about the significant and the positive
performance of the banks. It has both the lag and lead indicators which means the financial
and the non-financial indicators respectively (Commbank.com.au 2019). The BSC has major
objectives to serve to the bank such as the financial objectives, customer objectives, internal
processes of business and the objectives to learn and grow.
2. Problems faced while implementing the Balance Scorecard
The problems faced by the commonwealth bank of Australia while implementing the
balanced scorecard are:
The poor definition of the metrics: the metrics of the bank are required to be apt and clear.
Which can be done with the help of the visual indicators. The CBA did not have the metrics
clear while implementing its scorecard which lead to some issues (Commbank.com.au 2019).

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There was too much focus on the internal processes: the company failed to start with the
focus on the external factors which is very essential to implement the balanced scorecard and
which also lead to the failure in alignment of the metrics (Commbank.com.au 2019).
Lacking the formal review structure: the company lacked in providing the formal review
structure distinguishing the different variables of performance. It is important that a new
metrics system is introduction to eradicate any issues while the implementation of the
balanced scorecards (Commbank.com.au 2019).
3. Long Term Goals of Commonwealth Bank as well as Stakeholders or Clients of
Commonwealth Bank
The main long-term goals of the commonwealth bank of Australia are focusing on the
customers and delivering them the best services which are sustainable in nature. Moreover,
they focus on the improvement of the security of the finances. And to attain these long-term
goals they are also focusing on the application of the best technologies which are up to date
like the applications which leverages the capabilities of the real time, and gives them new and
unique approaches by which they can communicate with the customers, policies for
improving the pricing systems (Commbank.com.au 2019). They also aim to gain strength and
productivity in their operations.
The group of stakeholders of the commonwealth bank of Australia are the customers, the
community, government institutions, public authorities and other individual shareholders.
There are also the fixed income investors and the groups which funds the bank (Fool.com.au
2019).
4. Balanced Scorecard Approach of Commonwealth Bank of Australia
There are four major perspectives of balanced scorecards of the bank:

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Financial perspectives: the measure for the performance of the finances are utilised like the
income and the investment returns by the balanced scorecards. It is a common measure for
the analysation and the comparison of companies (Valmohammadi and Ahmadi 2015). The
organization’s success is measured by this perspective where a clear view is received about
the funds invested by the shareholders and the financial institutions. It helps in giving the
three major approaches like the historical data, current data and the data in the future.
Customer perspectives: there is identification of the segmentation of the markets and the
customers on which the bank targets (Valmohammadi and Ahmadi 2015). The measures
included are satisfaction of the customers, retention of the customers, acquisition of the new
customers, profits gained by the customers, and the share of the market in the major
segments.
Internal business process perspectives: the crucial internal process of the bank is identified
in order to bring the necessary changes and improve the performance (Valmohammadi and
Ahmadi 2015). This includes steps such as satisfying the shareholders and coping up with
their expectations, delivering of the outcomes for attracting and retaining the customers, and
measuring the important processes of each unit and department.
The learning and growth perspectives: the focus is on the competencies and the abilities of
the people working in the bank where the managers play an important role in enhancing those
abilities by focusing on the satisfaction of the employees, their retaining aspects and their
productive work (Valmohammadi and Ahmadi 2015).

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5. Strategic map of Commonwealth Bank of Australia
Figure: Commonwealth Bank of Australia
(Source: Commbank.com.au 2019)

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Balanced scorecard of the Commonwealth Bank of Australia
Figure: Balanced Scorecard of Commonwealth Bank of Australia
(Source: QuickScore Balanced Scorecard Software 2019)
6. Indicate KPI’s and KPD’s
The key performance indicators of the bank are the ones which indicates the use of
the factors which helps in the analysation of the correlation existing among the metrics. It
helps in the measurement of the huge influence on the performance of the future. The bank
measures the present state like the number of sales meeting held that day or the state of the
future where the scheduling of the meetings is done in the coming weeks or days. The key
performance drivers on the other hand are the customer satisfaction ratings, difference in the
average price of the contract which is given to the owner and measured according to the goal
of the bank (Deloitte Georgia 2019). It helps the bank to consider its operations and whether
it is complying with its objectives or not.

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7. Identification of issues that takes place while implementing balanced scorecard
Thus, the implementation of the balanced scorecards is done in order to get the
knowledge of the financial and the non-financial measurements. The different perspectives
involved with the same also faces many challenges and issues (Busco and Quattrone 2015).
The poor guidelines of the practices and the poorly defined metrics leads to the arousal of the
issues and the problems. Thus, the user should have the ability to make better judgements and
take efficient decisions. The balanced scorecard has got the uncertainty which is a major
issue for the person practising and researching. The incomprehensible and the improper
identification of the factors leads to problem in the implementation of the balanced score
cards.
Conclusion
Thus, it is concluded that the balanced score card of Commonwealth Bank of
Australia is very important for the demonstration of its financial and the non-financial
measurements. Moreover, there are various issues which comes in the way of implementing
the balanced scorecard and it is very important to remove them. The KPI’s and the KPD’s
also play an significant role in the implementation of the balanced scorecards of the banks.

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References
Busco, C. and Quattrone, P., 2015. Exploring how the balanced scorecard engages and
unfolds: articulating the visual power of accounting inscriptions. Contemporary Accounting
Research, 32(3), pp.1236-1262.
Commbank.com.au. (2019). Investors - CommBank. [online] Available at:
https://www.commbank.com.au/about-us/investors.html [Accessed 24 May 2019].
Commbank.com.au. (2019). Strategy - Commonwealth Bank Group. [online] Available at:
https://www.commbank.com.au/content/commbank-neo/2014shareholderreview/
strategy.html [Accessed 24 May 2019].
Deloitte Georgia. (2019). Key performance indicators (KPIs) and balanced scorecards
(BSCs) | Deloitte CIS | Operations | CFO Services | Performance Management. [online]

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Available at: https://www2.deloitte.com/ge/en/pages/operations/solutions/key-performance-
indicatorskpisandbalancedscorecardsbscs.html [Accessed 24 May 2019].
Fool.com.au. (2019). Commonwealth Bank of Australia reports: Should investors be
worried? | Motley Fool Australia. [online] Available at:
https://www.fool.com.au/2015/05/06/commonwealth-bank-of-australia-reports-should-
investors-be-worried/ [Accessed 24 May 2019].
Pcg-services.com. (2019). [online] Available at: https://www.pcg-services.com/using-a-
balanced-scorecard-to-measure-your-key-performance-indicators/ [Accessed 24 May 2019].
QuickScore Balanced Scorecard Software. (2019). What is a Balanced Scorecard? A short
and simple guide for 2019.. [online] Available at: https://balancedscorecards.com/balanced-
scorecard/ [Accessed 24 May 2019].
Valmohammadi, C. and Ahmadi, M., 2015. The impact of knowledge management practices
on organizational performance: A balanced scorecard approach. Journal of Enterprise
Information Management, 28(1), pp.131-159.