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Balanced Score Card: The Strategic Management System

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Balanced Score Card: The Strategic Management System What is a Balanced Score Card? Companies express grandiose Visions and exhort managers to implement that – PowerPoint PPT presentation

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Title: Balanced Score Card: The Strategic Management System


1
Balanced Score Card The Strategic Management
System
  • What is a Balanced Score Card?
  • Companies express grandiose Visions and exhort
    managers to
  • implement that
  • 2 Yet the linkages from Vision to formulation to
    implementation of strategy are lost
  • 3 Also, top managers never get to know the
    consequences of their investment decisions, that
    unfold only in the long run
  • 4 BSC provides a tool for internal analysis,
    in-process developments
  • out of the investments made in previous time
    periods, and clear
  • guidelines what is required next.
  • 5 In sum, it is an implementation and monitoring
    and target setting tool

2
The four perspectives of the BSC
EVA
FINANCIAL
Profitability
Growth
Differentiation
CUSTOMER
Cost Leadership
Quick Response
Product Development
OPERATIONS
Demand Management
Order Fulfillment
Leadership
ORGANISATIONAL
Organisational Learning
Ability to Change Innovate
3
The BSC can be used to
  • Linking Strategic Vision and implementation
    Growth and Productivity
  • Clarify and update Strategy
  • Communicate strategy throughout the company
  • Align unit and individual goals with strategy
  • Synergizing Short-term and long-term goals
    budgets and resource allocation
  • Developing objectives, measures and target
  • Linking performance with objectives and rewards
  • 8. Identify and align strategic initiatives
  • 9. Conduct periodic performance reviews to learn
    about and
  • improve strategy

4
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5
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6
Power Grid Corp Mission and Objectives
  • Mission
  • Establishment and operation of Regional and
    National power grids to facilitate
  • Transfer of power within and across the regions
    with reliability, security, on sound
  • Commercial principles.
  • Objectives
  • The corporation has set following objectives in
    line with its mission and status as
  • Central Transmission Utility
  • Undertake transmission of energy through
    inter-state transmission system
  • Discharge all functions of planning and
    co-ordination relating to inter-State
  • Transmission system with
  • i-ix (stakeholder bodies)
  • Exercise supervision and control over inter-state
    transmission system
  • Efficient operations and maintenance of
    transmission system
  • Quality Policy
  • Powergrid shall continuously strive to develop
    and maintain an efficient and
  • Effective National Grid with due regard to
    time, cost, technology, value addition

7
Powergrid at a Glance
  • Incorporated in 1989, Started commercial
    production in 1992, notified in 1998 as CTU
  • Single Largest Transmission utility in the world
    Carries 40 of power generated
  • and 1/3rd of the installed power in the country
  • Recognized as Miniratna by GOI
  • First utility to get ISO 9001 in the country
  • First PSU to establish and implement the
    Environmental and Social Policy
  • and Procedures (ESPP)
  • Obtained IP-II License from DoT, GOI for
    connecting 56 cities with 14000 km OFC
  • No. of Employees 6877
  • ULDC for real time monitoring
  • 99 availability
  • Excellent Emergency Restoration System (ERS)
  • Working to Catalyze private investment to the
    tune of Rs. 23,000 crores
  • Powergrid Intranet
  • Consistently begged Excellent MOU Award, Prime
    Ministers award for two consecutive years

8
Growth Profile
  1992-93 2000-01 Growth
Physical Growth Circuit KMs No of Sub Stations Transf. Capacity(MVA) Inter-Regional Transfer Capacity(MW) Export of Surplus Power from Eastern Region (MU)   23,000 39 13,200 500   0   40,189 66 33,230 4,500   6,790   75 69 152 800   --
Financial Growth Net Profit (Rs. Crores) Turnover (Rs. Crores) Capital Employed   236(US 52 M)  634(US 141 M)  3795(US 843 M)   742(US 165 M)  2683(US 596 M)  11117(US 2470 M)   214 323 550
9
Major Projects in Hand 800 kV Tehri Transmission
System 2000 MW HVDC Link (1500 KM) Transmission
Line between Talcher in Orissa and Kolar in
Karanataka 500 MW Sasaram HVDC Back to Back
Project 400 kV Naptha Jakhri Transmission System
Unified Load Despatch Centre projects of
Soutern, Northern, Eastern, Western and North
Eastern regions Future Plans Development of
Robust National Grid FORMATION OF SAARC GRID
Performance Most of the projects are completed
well ahead of Generation Projects even against
the difficult terrain and climatic conditions
e.g. URI, NER Projects, etc. Transmission
system availability maintained consistently above
98 Rated "EXCELLENT" on MOU with MOP since
1993-94 Awarded with "PRIME MINISTER's MOU
AWARD" since 1997-98  Disaster
Management Evolved one of the Best Disaster
Management System in Power Sector using
Emergency Restoration System (ERS) Devastation
caused by cyclone on Orissa in 1999, Gujarat in
1998 and Bhuj 2001 was attended by POWERGRID on
war footing  400 KV DC Uri-Wagoora collapsed
line in hilly and snowbound terrain restored in
minimal time, using ERS
10
Diversification in Telecom Embarked upon a
mission to establish a National Backbone of
Telecom Network and synergise its Power
Transmission Networks to telecom super highways
in a phased manner In Phase-1, excess capacity
available in ULDC scheme will be utilised In
Phase -2, extend telecom network to 56 cities of
the country by the year 2002-03. Plan to enter
telecom business as National Long Distance
Operator Consultancy   POWERGRID is executing
total turnkey consultancy contracts of over Rs.
25 crores ( US 7 million) Consultancy
Projects M/s West Bengal Power Development
Corporation Ltd. (WBPDCL) Merz Mclellan (
MM) Electricity department, Govt. of
Pondicherry Karnataka Electricity Board (KEB)
Delhi Vidyut Board (DVB) National Hydro Power
Corporation (NHPC) Andhra Pradesh State
Electricity Board (APSEB) Haryana State
Electricity Board (HSEB) System Studies
Independent Power Producers (IPPs)
Indo-Bangladesh Interconnection West Bengal
State Electricity Board (WBSEB)
11
  • ARTICULATE A VISION FOR THE CORPORATION
  • Mission
  • Establishment and operation of Regional and
    National power grids to facilitate
  • Transfer of power within and across the regions
    with reliability, security, on sound
  • Commercial principles.
  • Financial Perspective Improve ROI by 20
  • PRODUCTIVITY STRATEGY
  • Improve productivity by better asset utilization
    10
  • Improve productivity of human resources 10
  • Gain government financial assistance for
    additional resources from
  • multilateral funding agencies
  • GROWTH STRAEGY
  • Add sources of revenue by putting up
    infrastructure in the existing
  • business 10

12
  • CUSTOMER PERSPECTIVE
  • Solve customer problems through advice and
    consulting
  • DO ABC customer analysis and identify profitable
    customers and their needs
  • Advice on financial matters to customers with
    outstanding dues problems.
  • Use relationships with the suppliers to help
    SEBs
  • Restructure loans to help improve customer health
  • Develop customer responsiveness
  • Tie up with other agencies like NTPC to integrate
    the national grid
  • Develop relationships with IPPs
  • Manage distribution in select areas for your
    customers at a price

13
  • INTERNAL PROCESS PERSPECTIVE
  • Develop relationship in the Ministry of Power at
    critical functional decisions
  • Develop consortium type relations with customers,
    investors, suppliers and
  • competitors
  • Develop Newer services for customers
  • Develop capabilities to handle customer request
    responsibly and responsively
  • Generate demand for power for bulk users
  • Manage grids while keeping environmental concerns
    at the forefront
  • Improve through technology the crisis and
    disaster management for
  • Develop Information and Knowledge management
    systems
  • Develop data base on customers and competitors
    for real time decision making
  • Develop excellence in project management areas
  • Align projects with suppliers in a timely manner
  • Minimize time and cost over runs at every cost
  • Develop power-related competencies for advisory
    services
  • Set up a group for locating newer opportunities
    in telecommunication and grid
  • management
  • Continuously improve quality standards in tasks,
    processes and relationships

14
  • ORGANISATIONAL LEARNING AND GROWTH PERSPECTIVE
  • Develop performance measures for individuals,
    centres, regions, and
  • corporate entities
  • Link rewards like bonuses and incentives,
    promotions to
  • performance measures
  • Identify technical, managerial and behavioral
    profile for each level
  • of management
  • 4. Identify skill gaps and train people or
    recruit from outside
  • Motivate and develop people in newer skills in
    low-ranked employees
  • Sensitize each employee about environmental and
    safety concerns
  • Sensitize every one on the need to keep the grid
    in near perfect operating
  • conditions and the impact of failure on the
    customers, users and its financial
  • and strategic consequences
  • Manage alliance in new areas like
    telecommunications or acquire newer
  • skills through training and/ or fresh
    recruitment
  • Train people in boundary relationship management,
    in particular legal,
  • statutory, and government bodies and public
    relations management

15
The Balanced Scorecard Strategy Map
Improve Shareholder Value
share price return on capital employed
Revenue Growth Strategy
Financial Perspective
Productivity Strategy
Build the franchise
Increase value to customers
Improve cost structure
Improve use of assets
Revenue from new sources
customer profitability
operating cost per unit produced
asset utilization
Customer Perspective Customer Value Propositions
Product Leadership
?
?
Customer Intimacy
?
?
  • Customer acquisition, retention satisfaction

Internal Process Perspective
Build the franchise through innovations
Increase customer value through
customer customer management processes
Achieve operational excellence through operations
and logistics processes
Become a good corporate citizen through
regulatory and environmental process
Employee competencies
technology
Corporate culture
Learning and Growth Perspective
16
Customer Value Proposition Strategies
Operational Excellence
Product/Service Attribute
Relationships
Image
Price
Time
Smart Shopper
Quality
Selection
Companies excel at Competitive Pricing, Product
quality and on-time delivery
Customer Intimacy
Customer Intimacy
Product/Service Attribute
Image
Relationships
Service
Customer Relations
Image
Companies excel at offering
personalized service to
Customers and at building long-term relations
with them
General Requirement
Customer Intimacy
Customer Intimacy
Diffentiator
Product/Service Attribute
Image
Relationships
time
Best in Class
functionality
Companies excel at creating unique Products that
push the envelope
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