Balanced Scorecard approach to Technology - Assignment Example

Balanced Scorecard approach to Technology Reliant Technologies is medium scale software solution provider that has several characteristics of its own. The company caters to the needs of various clients and hence there are various teams that work simultaneously in the company to deliver the final product within deadlines. A thoroughly structured Balanced Scorecard report would analyze the business from the different aspects and would provide an insight about the various growth opportunities that lie ahead of the organization. The report would analyze the various aspects of the business of Reliant Technologies which include the financial position, the prospective clients and the working standards of the processes and the capacity of the organization and would be based on the measures of operational performance of the business. Along with that the report would also provide a strategic insight how the company would align the organizational goals with the personal goals of the teams that work in harmony to deliver the projects to the clients of the company. Now the management team of Reliant Technologies will face several challenges while undertaking its day to day operations. The product cycles of technology companies are in rapidly shrinking state. The challenge o acquiring, training and retaining IT talent has become aggravated over time due to the high attrition rate. There is also a necessity to address the needs of the customers and design the products as per their requirements. Hence a thorough analysis of this is essential. There might also be disrupting technologies that make the entire range of products or business models haywire. Along with this, due to lack of proper communication, the problems are not looked into or solved in the right manner by the right people. A company would formulate its strategy in such a way that it enables the business achieve its desired goals and it is the path that would lead the company to its success. This is necessary so that the company can translate its innovative ideas to stories of success in reality. Development of the Balanced Scorecard System First of all it is important to know and understand the stakeholders that of the company and their individual objectives. Then the strategic components of the business have to be identified and their present position has to be analyzed. These components are the vision, the mission, departmental goals, the core values of the organization and the various dimensions of performance and the forecasting of the probable results. Now for using a Balanced Scorecard approach for Reliant Technologies the health of the company can be measured from both financial and Non Financial perspectives (Kaplan and Norton, 1992). This is the advantage of Balance Scorecards measure that it looks into the business beyond the numerical figures of financial statements and exhibits a better insight into the bigger picture. The main areas of the Balanced Scorecard would be as follows (Figure 1). Figure 2 Balanced Scorecard Figure 1: Balanced Scorecard (Source: Kaplan & Norton, 1992) Financial Aspect Accurate Financial data and the proper interpretation and forecasting are required for the crucial analysis of the financial position of the organization. This data should be available to each and every segment of the operations of Reliant so that all the persons concerned would know how and which factors are changing the bottom-line of the balance sheet. Rigorous metrics on the profitability like EBIT, EBITDA and Operating Income have to be done to understand the real position of the business. Thus centralization of the system is necessary for the managers. Assessment of the Return on Investment The assessment of financial position is not enough. The situational analyses of risky situations that Reliant might face and the costs and benefits of undertaking different projects should be done instantly. Prior calculations of return on investments have to be undertaken before going for any kind of new project that requires development of the technology set up. Most of these decisions lie of the finance managers but now Reliant has to involve the management of the other departments as well. Customers’ Perspective Reliant has to analyze the customer database and has to see how the satisfaction level of the customers can be enhanced. The customers who would show a discomfort in remaining under the software services of the company has to be given better offers to allure them to continue taking the services of the company. The clients often try to judge the company by the suppliers that are associated with that particular company. Incorporation of new features in the Products Reliant has to ensure that the issues cropping up during the introduction of the product are tracked systematically and the issues are ordered with the high priority issues being addressed first. This helps in a way that new features can be developed by revising the flaws of the previous versions. Hence a continuous improvisation and up gradation of the products are extremely essential. Reliant has to understand what the customer actually expects. Proper Market research and interaction with the customers This can be done by thorough market research by interacting with the clients who in turn would let Reliant know what the unmet needs of the customers are and which untapped areas the company can venture into. Internal Business Processes It would include internal efficiency and the employee performance and dedication towards the work. Measures have to be taken so that the cycle times coincide with the activities of the business. Proper Assessment of the Markets Often them market conditions are not conducive for the launch of a particular product. Correct decision has to be taken regarding when to start the product development and when to launch the product (Hubbard, 2007). Reliant has to understand the buying cycle of the customers very well and then they can schedule their activities in tune with the cycles. In today’s world the shortening of this buying cycle has reduced the profitability of the company and the success of the product. But Reliant has to understand this buying behavior of the prospect so that this does not hinder the growth of the company and its innovation process. Learning and Innovation Since it is a technology company regular up gradation of the systems would be essential and the concerned people have to be trained and have to be motivated to think anything out of the box that may add value to their personal careers and the growth of the company. By innovation in the business processes the company could be headed for a higher goal. For this the people who are involved in the process have to be encouraged to do things that would add value to Reliant. The concerned managers in every process have to be active in this regard. There is a risk involved in this process of innovation and hence attempts should be taken to minimize the risk profile by collaboration with the Technical Universities. Assistance from government can also be sought and the industrial consortiums who want to invest in research and development have to be approached. Implementation of the Balanced Scorecard Approach Figure 2: Implementation of Balanced Scorecard: Nine Steps to victory (Source: Kaplan & Norton, 1992) The Balanced Scorecard Approach needs to be implemented in Reliant following the nine conventional steps that most of the technology organisations take. First of all, the organisation has to be assessed from the point of view of the goals and missions and what kinds of setbacks are holding the company from moving ahead has to be analysed. A feasible plan has to be developed and if any change necessary has to be implemented. Secondly the strategy that reliant can take to increase the customer base and have to be improved. Thirdly each of the smaller elements of the strategy which would add value to the customer satisfaction has to be analysed and implemented properly. In the fourth step strategy map has to be created in which the various components of Reliant’s departments have to be linked indicating which cause has led to the undesirable effect and that cause has to be removed. After this step the expected and actual performance has to be analysed critically and the targets have to be made for the employees and individual department so that the execution of the strategy can be done successfully. In the next step, various strategic projects can be started which would integrate in to the final execution of the objectives. In the seventh step, the information and knowledge sharing in Reliant has to be done and more automation has to be incorporated in the system with the use of developed software. Along with this in the next step employees and departments will also be provided with scorecards that would have smaller targets. In the final step the results have to be analysed and feedback has to be collected for the betterment of the company in future. Therefore in Reliant there is a need for integration of the various departments by proper connectedness through automation and proper analysis of the loopholes that are hindering the successful running of the business. References Hubbard, D. W. (2007). How to measure anything: Finding the value of intangibles in business. New York, NY: John Wiley & Sons. Kaplan, R. S., & Norton, D. P. (1992). The balanced scorecard: Measures that drive performance. London, UK: Harvard Business Review. Read More