1. you can. it does.  SAP 2000 Company (Hildebrandt) / 1 The Balanced Scorecard Alan Hildebrandt SAP Canada

2. you can. it does.  SAP 2000 Company (Hildebrandt) / 2 Why Balanced Scorecard?

3. you can. it does.  SAP 2000 Company (Hildebrandt) / 3 Strategy Implementation "Less than 10% of strategies formulated are effectively executed." Fortune Magazine The corollary is 90% of strategies are not executed effectively!

4. you can. it does.  SAP 2000 Company (Hildebrandt) / 4 Four Barriers to Strategic Implementation Only 5% of the work force understands the strategy 60% of organization don’t link budgets to strategy Only 25% of managers have incentives linked to strategy 85% of executive teams spend less than one hour per month discussing strategy 9 of 10 companies fail to execute strategy The People Barrier The Vision Barrier The Management Barrier The Resource Barrier Today’s Management Systems Were Designed to Meet The Needs of Stable Industrial Organizations That Were Changing Incrementally You Can’t Manage Strategy With a System Designed for Tactics Source: The Balanced Scorecard Collaborative

5. you can. it does.  SAP 2000 Company (Hildebrandt) / 5 1.Create Strategic Focus – “The Balanced Scorecard” 2.Translate Strategy to Action – “Strategic Enterprise Management” STRATEGYFormulateNavigate Communicate Execute Performance Management Program Strategy at the Center of the Process

6. you can. it does.  SAP 2000 Company (Hildebrandt) / 6 The Balanced Scorecard Framework  Measurement is the language that gives clarity to vague concepts.  Measurement is used to communicate, not to control.  Strategy can be described as a series of cause and effect relationships "If we succeed, how will we look to our shareholders?” The Strategy Financial Perspective "To achieve my vision, how must I look to my customers?” Customer Perspective "To satisfy my customer, at which processes must I excel?” Internal Perspective "To achieve my vision, how must my organization learn and improve?” Organization Learning Source: The Balanced Scorecard Collaborative

7. you can. it does.  SAP 2000 Company (Hildebrandt) / 7 Balanced Scorecard Overview

8. you can. it does.  SAP 2000 Company (Hildebrandt) / 8 Strategies and Themes Customer Internal Processes Learning & Growth Financial Strategies Are Made Up of a Set of Underlying Themes

9. you can. it does.  SAP 2000 Company (Hildebrandt) / 9 Balanced Scorecard: Strategy Map Increased Profitability Customer Centric Operational Excellence Improve Operational Processes Eliminate Duplicate & Manual Efforts Customer Profitability Improve risk management “Customer Centric” “Operational Excellence” Improve CRM Delivery Supply Chain Optimization Shared Services A Motivated and Prepared Workforce Improved Employee Culture Improved Employee Skills Integrated Systems Acquire / Retain Targeted Customer Reduced Customer Transactional Costs Financial Internal Process Learning & Growth Customer

10. you can. it does.  SAP 2000 Company (Hildebrandt) / 10 #1. A Corporate Scorecard defines overall strategic priorities. #3. Each Support Unit develops a plan for “best practice” sharing to create synergies across SBUs. LINE BUSINESSESSUPPORT UNITS CORPORATE SBU A SBU B SBU C SBU D CORPORATE SCORECARD (Shared Strategic Agenda) ThemesMeasures Convenience Store Marketing Gasoline Marketing Manufacturing Services Supply Programs Environment and Safety Human Resources 1.Financial Growth 2.Delight the Consumer 3.Win-Win Relationship 4.Safe and Reliable 5.Competitive Supplier 6.Good Neighbor 7.Quality 8.Motivated and Prepared xxx xx #2. Each SBU develops a long-range plan and BSC consistent with corporate strategic agenda. #4. Departments, teams and individuals develop scorecards consistent with SBU strategy. Strategies Are Executed Through Business Units The Strategies of the Business Units Must Be Integrated If Synergies Are to Be Achieved. Source: The Balanced Scorecard Collaborative

11. you can. it does.  SAP 2000 Company (Hildebrandt) / 11 Corporate Strategy Strategic Management Process BSC Budget / Operational Planning Process Program ERP Integrate Strategy with Operations

12. you can. it does.  SAP 2000 Company (Hildebrandt) / 12 Potential Ingredients of a BSC Program Formulate Communicate Feedback Formulate Strategy Strategies & Objectives Cause & Effect Linkage Initiatives Measures & Targets Business Unit Linkage Leadership from the Top Common Objectives Corporate, SBU, Division, etc Shared Services Human Resource Alignment Owners of Objectives & Measures Align personal Goals with Objectives Competency Development Team Scorecards Financial Resource Alignment Capital Budgeting Initiative Management Budgets for Initiatives R&D Inbound Logistics Manufac- turing Outbound Logistics Marketing & Sales STRATEGY Strategic Feedback BSC embedded Feedback System Assessment & Comments Regular Review of Strategy Map Test Hypotheses Feed Results into Business Planning Strategic Knowledge Networks Network Design Knowledge Sharing Best Practise Knowledge Management Research & Planning Business Analysis Business Information Collection Get Market Expectations (Fin.Analysts) Current Plan vs. Expectations Scenario Planning Simulation & Forecasting Execute Strategy Training Train the Organization Create Employee Awareness Get Employee Feedback Create Strategy focused Org. Research Business Execution Reengineer Processes Execute improved Processes Track Performance of Reengineering Source: SAP AG & The Balanced Scorecard Collaborative

13. you can. it does.  SAP 2000 Company (Hildebrandt) / 13 Balanced Scorecard Users Chemical Bank Citicorp Wells Fargo OFS Bank of Montreal Allstate Fanniemae Scudder Scandia

14. you can. it does.  SAP 2000 Company (Hildebrandt) / 14 Balanced Scorecard “Early Adaptors” 1993 Property & Casualty Retail Bank 1993Profits = $x 1994 1995 1996 Profits = $8x Profits = $13x Profits = $19x ProfitStock $275M loss Stock Price = $59 1994 1995 1996 1997 1998 $15M $60M $80M $98M $94M $74 $114 $146 $205 $249 Source: The Balanced Scorecard Collaborative

15. you can. it does.  SAP 2000 Company (Hildebrandt) / 15 Balanced Scorecard in the Financial Services Sector Establish accountability Leadership is required throughout the organization Listen to the stakeholders, customers, employees Use measures to communicate, not to control OR Use measures to "learn, not burn" Integrate your planning process with the measurement process Measures should continually evolve Measures must reflect the mission and strategy of the organization

16. you can. it does.  SAP 2000 Company (Hildebrandt) / 16 SAP – SEM Demo

17. you can. it does.  SAP 2000 Company (Hildebrandt) / 17 Benefits of SAP SEM I (Strategic Value Proposition) Allowing management to control an enterprise internally using value-based management principles. Helping to translate corporate strategy into operational target setting. Providing the first end-to-end solution on the market to support integrated enterprise management processes, enabling continuous management dialogs and organizational strategic learning Improving significantly the communication process with stakeholder groups and thereby helping to realize stakeholder value. SAP SEM enables organizations to move to the next level in value creation: to identify, simulate, manage and realize strategic growth opportunities by:

18. you can. it does.  SAP 2000 Company (Hildebrandt) / 18 Benefits of SAP SEM II (Operational value proposition) Speeds up significantly the legal and management consolidation process by automation. Enables continuous and efficient simulation, planning and forecasting processes across the entire organization. Provides a powerful infrastructure for KPI based performance management and benchmarking. Helps to find, structure and edit relevant external (unstructured) competitive, market or other information on a ongoing basis and to automatically distribute it to the appropriate information consumers. Accelerates implementation through ready-to-use generic and industry specific content for SEM excellence.