Business Scorecard of Newcroft Hospital Trust - Case Study Example

A Report on the Business Scorecard of Newcroft Hospital Trust Introduction The core intent for writing this report includes setting objectives of the hospital and clearly outlining how these objectives can be attained, for continuous provision of quality services. Subsequently, the report seeks to determine and understand the design of the hospital, its policies and the necessary physical and technological infrastructure required to attain its goals. The report will also help create systems to monitor and measure the desired outcomes (Bohmer 2011). The report would be divided into four parts i.e. the financial perspective, the customer perspective, the Internal Business Processes and the Learning and Growth perspective (Kaplan 1998). Each of these parts will have objectives, measures of performance, set targets and initiatives to be taken. Financial Perspective The hospital seeks to increase its profitability by employing various methods to cut down costs while increasing the financial output. The management has various objectives that clearly define the direction that the hospital wishes to take in terms of financial growth; for the best return on investment of the shareholders. Revenue growth is one of the objectives that have been set forth by the management. The hospital can increase revenue growth by employing various measures such as providing new services so as to get more income (Aleksey 2015). Newcroft Hospital should also strive to acquire multiple streams of revenue income; this is one of the best ways of increasing revenue. They can use other profitable health facilities to find out which services they can easily include that will not need a large investment on their part. The health facility should cut down unnecessary costs to increase profitability. The management should try to review the costs incurred by the businesses. This action combined with the acquisition of multiple revenue streams will increase the return on capital employed by shareholders. Newcroft Hospital should increase the productivity of the hospital and the capacity of its clients. This can be done by employing new technology that can increase the productivity and efficiency of common processes. The health facility can also expand its current capacity by building more facilities to increase its’ customers capacity. Customers Perspective The customers, in this case, include the patients and the physicians employed by the hospital (Savkey 2014). The hospital seeks to increase its market share in the health industry; this can be done by increasing the amount of clients the hospital handles. An increase in market share will most likely be measured by increased profits and the need for expansion of the health center. Providing quality services to clients who would become regular clients, would result in the accomplishment of the goal of increased profits. A better form of advertisement, in this case, would be through the word of mouth to friends and family. Newcroft may also resort to offering free health consultation services on certain days of the month. This can be done by establishing mobile clinics that go around the community offering free health services. This action is necessary as it will help reach prospective clients and showcase the quality of services that the hospital can offer. The hospital should ensure that all clients who receive their services are satisfied; this can be done through the employment of surveys, suggestion boxes or even through observation (Kaplan&Norton, 2001). Newcroft’s policies and processes should be friendly to customers. Customers prefer fast delivery when they go to hospitals; the staff can use this knowledge to get more clients. Most hospitals have very slow services, and one would have to wait for a long time before he/she is served. The management will put in place measures to ensure this is not the case in Newcroft by engaging in activities such as hiring of more employees. The price of the services offered should be affordable to the target clientele; this will increase the revenues as more people will be likely to seek the services of the hospital. The staff members and suppliers should also be well remunerated for the services that they offer; this will aid them to do better work thereby increasing productivity as a result of the motivation received. The management tries to provide for a suitable working condition for the employees in order to make them comfortable. Internal Business Processes Perspective These are business practices used by the company to satisfy the shareholders and the customers on a long-term or short-term basis (Epstein 1997). The hospital seeks to incorporate new innovative measures to improve on customer satisfaction; this will be through the introduction of new services and processes. The first is a measure of decreasing the amount of time taken by a client in order for him/her to be served and increase efficiency. It also seeks to employ the necessary technology that may be used to ensure better quality of the work done by its employees (LIFE center international 2011). The hospital also seeks to improve relations with its suppliers. This will ensure that the supplies are received on time, and the suppliers are happy with the services they get from the hospital. It would also ensure that the hospital gets the best quality supplies. The hospital wants to use processes and technology that are cost friendly to the business. This means that all processes will be reviewed to get cheaper and better ways of operation. The efficiency of the business processes will be measured by the time required for customers to be served, quality of the services offered and the costs required to run such processes (Capelo & Dias, 2009). Learning and Growth Perspective This perspective provides measurement techniques to determine how the company can improve their processes and systems in order to create value (McGregor 2003). There are three main objectives that this perspective tries to exploit. These include employee capabilities, information system capabilities and strategy execution and motivational issues. The employee’s capability seeks to give and evaluate the skills employees have in executing the business strategies. Information system capabilities are the necessary technological changes that a firm would need in order to use the new strategies. Strategy execution and motivation is how an organization explains its strategies to its workers while motivating them to embrace changes (Lipe & Salterio 2000). Newcroft hospital will need to train its’ staff on the use of the new processes and technology that it will bring about. The key indicators of growth in relation to this perspective are the duration for effective running of the processes and the level of expertise the employees will attain. The health facility will also learn to recognize and serve the needs of the customers. Subsequently, they will learn much about the usage of the new systems for them to get full benefits that accrue from it (Candela 2008). Conclusion The hospital will use a business scorecard to improve its operations and profitability. The financial perspective will help the management realize its financial objectives and obligation to shareholders. The customer’s perspective will assist in knowing and attending to the needs of customers. The internal business perspective will help streamline their operations for the provision of better services (Bohmer, 2011). The learning and growth perspective will evaluate the skills of employees and the effectiveness of the business methods used. Comparison of two articles on the implementation of business scorecard The two articles that will be compared seek to distinguish the challenges and benefits of implementing the business scorecard. One of the articles discusses the challenges of its implementation is written by Beer Molleman and is titled ‘The challenge of implementing the Balanced Scorecard.’ It outlines the problems that the business scorecard does not address especially in small and medium-sized enterprises. It also provides recommendations for effective utilization of the scorecard. The research method used in this article was a case study where the author reviewed the CIO of an engineering company. The other article that is compared is written by Dag Oivind Madsen and TonnyStenheim from Norway. The article is named ‘Perceived benefits of balanced scorecard implementation’. The paper explores the perceived benefits and challenges in implementation of the business scorecard(Braam& Nijssen, 2004). The method of research and data collection was by conducting 61 interviews with the users and consultants of the scorecard. This second method of data collection and research can be said to be most effective as it encompassed a lot more people than the first. The first article presents some challenges that are encountered when a business tries to implement the scorecard system. The first challenge is the lack of senior management commitment (Schneiderman 1999); most firms leave the creation and implementation of the scorecard to middle management. This, the author describes, is one of the reasons why this policy fails; the top management should be involved directly in the implementation of the policies. The second challenge that affects enterprises’ implementation is that few individuals are involved in leading the process (Kaplan and Norton 2001). The responsibility for implementing the process cannot be given to one person; the whole management should work hard to ensure that the strategies are implemented. This will need cooperation between different management departments in the company (Brewer & Speh, 2000). The third challenge that businesses face is when the management keep the business scorecard at the top (Anderson et al. 2001). For effectiveness, the actions and strategies of the business scorecard should be shared down to low-level employees where the actual changes are going to happen. If the leaders fail to do this, then the strategies cannot be fully understood and implemented; consequently, leading to the failure of the whole process (Davis & Albright, 2004). The other challenge may occur if the development process takes too long (Braam & Nijssen, 2004).If the implementation takes too long, then the strategies may change during the process. This will result in the need for changing the measures used by the company. If the company uses the old ensures then the whole execution of the policy will fail. The last challenge happens when the organization adopts too many indicators. When this happens, the organization loses focus and cannot find linkage between those indicators. Businesses should only adopt indicators that reflect their strategy and those that are critical. The second article mostly focuses on the benefits of the scorecard while delving a little on the challenges of its implementation. The first benefit of the scorecard is that it gives focus to the management (Hoque & James, 2000). It keeps them focused on the most important parts of their job; in other words it helps managers in prioritizing and making decisions. The focus means that they have to align themselves to make sound decisions that are in line with their long-term goals. The second advantage is that it makes available a sense of balance in running the company. Managers who use this tool appreciate that the scorecard removes overemphasis on financial results as it helps them focus on other indicators of progress. Some managers also claimed that it helped balance the demands of the shareholder and the stockholder (Hoque& James, 2000). The scorecard system also helps in the alignment of goals in a company. When everyone in the company knows the objectives and aims of the company, it helps everyone work towards the same goals. This is mostly referred to as goal congruence (Kaplan and Norton 2006). Another benefit claimed is that the scorecard can be used as a cultural and motivational tool. It changes how the people in a business ‘think’ as it puts the focus on things that bring better results to the organization. Employees can be given specific goals to reach with promises of rewards if they do so; this will increase their motivation to do better work. The article states that the limitation of the interview may arise from the interviewers expressing what they think the researchers wants to hear (Cook, Campbell & Day, 1979). Another bias may arise from the new overenthusiastic users who may still be experiencing the ‘honeymoon period’ effect (Malmi, 2001). Generally, the Business scorecard is a valuable tool that can assist a company to reach its desired goals. References List Bohmer, R.M.J. (2011). The four habits of high-value health care organizations. N Engl J Med; 365:2045-7. Braam, G. J., & Nijssen, E. J. (2004). Performance effects of using the balanced scorecard: a note on the Dutch experience. Long range planning, 37(4), 335-349. Brewer, P. C., & Speh, T. W. (2000). Using the balanced scorecard to measure supply chain performance. Journal of Business logistics. Capelo, C., & Dias, J. F. (2009). 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Journal of Strategic Performance Measurement, special edition: 6-11, January 1999 Read More