ACIS_2116_Chapter_13_Slides_Spring_2009

ACIS_2116_Chapter_13_Slides_Spring_2009 - Performance...

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1 Performance Evaluation Using the Balanced Scorecard ACIS 2116 Chapter Thirteen
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2 Non-Financial Performance Measures Due to: a rapidly changing environment, increased global competition, and an increased awareness of the need to focus on customer needs companies must focus on non-financial measures of performance as well as financial measures.
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3 Non-Financial Performance Measures To be successful, companies must focus on non-financial measures such as: customer satisfaction quality efficiency productivity employee satisfaction
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4 Traditional Accounting Measures & Performance Evaluation Traditional accounting measures alone are not enough to measure performance. Traditional accounting measures are “lag” indicators. That is, they do not indicate there is a problem with customer satisfaction, quality, efficiency, etc. until after sales and profits have declined, and/or costs have increased.
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5 The Balanced Scorecard Uses financial and non-financial performance measures that relate to overall strategy of organization. Helps management focus on ALL of a company’s critical success factors -not just its financial ones.
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6 The Balanced Scorecard Integrates financial and non-financial performance measures. Performance measures Customers Learning and growth Internal business processes Financial
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7 Example of a Balanced Scorecard
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8 Non-Financial Measures Important because: Non-financial measures indicate that a problem exists on a more timely basis than financial measures do. (Non-financial measures are “leading” indicators.) Lower level managers not usually responsible for financial performance measures. Lower level managers usually understand and control non-performance measures.
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9 Customer Perspective Focus on meeting/exceeding customer needs Critical Success Factors: Increasing the quality of products and services Reducing delivery time Increasing customer satisfaction
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10 Customer Perspective Measures of performance: Number of warranty claims Number of returned products Customer response time Percentage of on-time deliveries Customer complaints Repeat business
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11 Customer Perspective Critical Success Factors: Increase market share Expand into new markets
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ACIS_2116_Chapter_13_Slides_Spring_2009 - Performance...

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