Example Cases

Valuable lessons can be learned from the following organisations:

Anonymous UK Electricity Company Electricity Company

CPM systems and balanced scorecards were used by an anonymous UK electricity company (known hereafter as “Energy”). Energy began as a merger of several companies in 2002. At this time, it implemented CPM in order to:

• Reinvent and to integrate the company
• Create focus
• Achieve common enterprise goals, and
• Meet new regulated customer service standards.

The pros and cons of the CPM/BSC implementation were reported as follows:

1. Advantages:

• Focused employees on key company goals and aligned these with jobs/continuous reviews
• Drove business improvement activities
• Improved customer satisfaction
• Increased productivity
• Aligned operational performance with strategic objectives
• Increased employee satisfaction
• Improved Energy’s reputation.

2. Disadvantages:

• Consumed excessive management time
• Demanded considerable financial investment
• Added bureaucracy as a result of too many measures
• Confused users with overcomplicated measures
• Discouraged entrepreneurial intuition. [17]

Serono, Switzerland BSC and double-digit revenue growth

Serono had a very strong performance-oriented culture and received the Balanced Scorecard Hall of Fame Award. The organisation used balanced scorecards as a management tool, which helped to align its global objectives and harness collective efforts across all functions. Serono’s use of balanced scorecards grew as it progressively linked these to compensation, planning, budgeting, communication, risk management, and strategy management. Finally, the entire organisation was aligned using balanced scorecards. Strong support from the CEO enabled Serono to continue to improve its Strategic Balanced Scorecard programme year after year, and thereby achieve double-digit growth in total revenues and net income. [18]

Bronson Methodist Hospital, USA Strategic plan implementation brings success

Bronson Methodist Hospital’s strategic plan implementation followed a quarterly cycle [19]:

Q1) A strategic input document was prepared and reviewed by the executive team, along with a summary of the previous year’s performance data. The hospital’s mission, values, vision and long-term goals were reviewed and revised as needed. A SWOT analysis was used to develop the key strategic and budget assumptions for testing by other leaders. Preliminary short-term objectives were then developed.

Q2.) The short-term objectives were approved and tactics developed. The board of directors revisited the strategic assumptions. Human resources and finance personnel used the approved tactics to formulate staffing, education and budget plans.

Q3.) Tactics and scorecard measures were finalised. The long-term and short-term strategic objectives, organisational scorecard, budget, staffing and education plans were then approved.

Q4.) The deployment was started and was accompanied by continuous assessment. Bronson attributed its success to the use of the Baldrige Criteria for Performance Excellence in achieving clinical excellence, customer and service excellence, and corporate effectiveness.

Circuit City Stores Inc. USA Data warehouses to gain competitive edge

Circuit City Stores Inc. (CCS) in the United States had products and services that were not meeting customer requirements. The company needed to make better use of the volumes of consumer data it had available to help it create a competitive edge in the fierce consumer electronics environment. By capturing customer information into a common repository, CCS was able to gain a deeper understanding of its consumer base. This was achieved by implementing a new enterprise data warehouse. Customer analytical tools were then added, which helped CCS to deliver more innovative products in preference to solely functional ones. CCS also sought to more fully integrate its supply chain processes and rationalise its key performance indicators among its supply chain managers and merchandising team. In this way, all of their objectives became the same, which created a consolidated merchandising-inventory team. The net result were more immediate and better decision-making capabilities. [20]

iBasis Inc, USA Data warehouse appliances optimised

The data analysis requirements of iBasis grew at more than 40% per year, putting significant strain on the existing data warehouse, which was taking from 18-24 hours to load and analyse data and deliver reports. What had initially seemed to be a perfect solution was now bogged down with up to 150 million transactions per day. Fortunately, recent technology developments enabled iBasis to replace its entire warehousing architecture with data warehousing appliances that combined hardware, database software and storage in a low-cost package, which was optimised for rapid query and retrieval. The implementation was deployed in only 12 weeks and dramatically improved performance. The new appliance was expected to meet iBasis’s needs for three years. It could then be upgraded, as required, within 24 hours without further disruption. As an added bonus, fewer administrative staff were required to manage the data warehouse appliance. [21]

Metropolitan National Bank, USA Performance dashboards simplify reporting

The Metropolitan National Bank (MNB) in the United States experienced very high asset growth on an annual basis and needed to improve the management of its balance sheet and streamline its reporting processes. A proprietary performance dashboard system was employed, which allowed some 80% of the staff, from executives downwards, to view a financial scorecard from home or in the office. The management team could access the bank’s total financial data and drill down to obtain relevant information. Executive staff were able to make comparisons of actual numbers to budgeted expectations, and variances were highlighted using red and blue colour coding. MNB executives had previously only been able to obtain this information well after the end of each month, in complex reports that required high staff numbers to compile. With the performance dashboard, they could now analyse this data on a daily basis, and quickly act to drive improved performance. [22]

BAR Honda, UK Performance dashboard delivers cost reductions

The BAR Honda team developed, built, and tested a number of complex vehicles in short time frames. Historical information about critical components, drivers, circuits used, and testing completed was required. To manage this, the company needed an integrated database with appropriate management, workflow technology and role-based screens. Proprietary systems were chosen, which met BAR Honda’s goals. The system was based on icon-driven dashboards, which monitored relevant functions, important information, and Key Performance Indicators. The chief engineers’ screen showed the life of critical components, engineering change control, production, cars in strip-down or build, spares and stock lists. The chief engineer was able to drill down on these into part audit trails. The system was fast and accurate, and delivered efficiencies and cost reductions throughout the organisation, including production and engineering. [23]

Southwest Windpower, USA Performance dashboard improves visibility

Southwest Windpower replaced its legacy systems with proprietary software, which was not only more cost effective but met the demands of the fast-growing business. A performance dashboard proved to be a key feature leading to improved material handling and understanding of strategic direction. Accounting, purchasing, inventory management and sales processes were readily monitored. As soon as the status of a sales transaction changed from “pending” to “ship”, it became visible on the accounts receivable dashboard. Workers were able to view daily or hourly sales. Mangers were able to quickly see what other departments were doing, and decisions were made more readily and efficiently. Using the dashboard to manage processes was a key feature. It contributed to reducing transaction turnaround times from days to just minutes. Inventory errors were reduced by a factor of 10, and communication between staff improved dramatically. [24]

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