British Petroleum: Balanced Score Card - Essay Example

This scorecard was developed by BP in 2003 .We will see what this scorecard was- (Anderson, 2003)

• Increase Replacement Cost Operating Profit
• Increase Return on sales
• Remove the cash crunch faced by the organization by increasing hand cash.
• Reduce Non-safety compliance costs
• Increase margin per tone

• Dedicated customer complaints unit
• Customer-friendly services and procedures
• Improve communication at each stage with customers
• Community welfare programs

• Increase product quality
• Achieve benchmarks for productivity projects
• Make standardized safety manuals
• Make information available quicker
• Risk Identification and mitigation before the matter escalates
• Sanitization of the environment

• Cross-departmental training
• Merit-based compensation review
• New training and learning plan
• New performance management system
• Employee welfare programs

 In order to successfully implement the internal business processes, the following action plan was prepared by the bank –

Initiatives

Metrics

Time Frame

Increase product quality

Train Quality Managers and supervisors

2 months

Achieve benchmark for productivity projects

Launch of Echo

1 year

Launch Standardized safety manuals

Launch of manuals throughout

2 years

Make information availability easier

Launch of Project GOLD

1 year

Risk Identification and mitigation

Prepare and train Safety audit teams

1 year

We will analyze these 5 matrices in detail and see how failure in the above matrices leads to a failure in the other three business perspectives

After pointing out the performance matrices we will now analyze how their failure led to a cascading effect on the other three perspectives and the failure of the program as a whole.

BP made the mistake of separating quality from normal day to day business activities. Quality managers were seen by most team as outsiders who came to overlook their work. Due to this quality concept was not internalized but workarounds were developed which were used whenever the quality team visited.

As is this case for any standardized software which is launched across a mammoth organization, launch of Echoke met with resistance from employees. Echoke was supposed to find out the choking points of the operation team – the areas where problem occurs again and again and thus create a standardized benchmark – however it failed to factor the human factor in this software. (Bamberg, 2000)

A new safety manual was launched by BP in 2004 . These manual were uniform with slight variations from place to place. However the problem was that regular training on these manuals was stopped when BP faced financial crunch. This led to the employees reverting back to their old ways quickly.

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Initial Failure of GOLD

GOLD stands for Global Operational, Leaders, and Display. Gold was the ERP project launched by BP.GOLD was supposed to accumulate information available from different countries BP operates in and present it to the top management in a comprehensive manner. Initially GOLD failed to capture the prevailing conditions in different countries as they were vastly from each other which made the data skewed. There were also compatibility issues with echoke which took a lot of time to be resolved.

Safety audit teams faced the same fate as quality managers. Deep thought was not given over the composition of these teams. In the initial days these teams were usually formed in UK and they tried to impose UK safety standards wherever they went. This was not desirable and even not feasible in some of the countries. Eventually top management had to intervene and audit teams were re-stuffed by incorporating staff from both teams. This included the best practices of both the countries in the audit teams.

Conclusion

The following chart summarizes how the failure in the business process matrices led to failure in the other three perspectives