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Balanced Scorecard Implementation at UniCredit Tiriac Bank
Jann Tadorian
Managing Partner
Inplenion Business Consulting International
Contact:
e-mail: [email protected]
mobile: +41763915015
Agenda
•
•
•
•
•
What is the Balanced Scorecard ?
How to implement a Balanced Scorecard Project?
Unicredit Tiriac Bank Example
Overview Oracle Strategy and Scorecard Solution
Q&A
<Insert Picture Here>
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Agenda
•
•
•
•
•
What is the Balanced Scorecard ?
How to implement a Balanced Scorecard Project?
Unicredit Tiriac Bank Example
Overview Oracle Strategy and Scorecard Solution
Q&A
<Insert Picture Here>
4
What is the Balanced Scorecard ?
A KPI
A Report ?
System
?
A Fashion ?
It’s a
Management System !
5
Honestly…
• Do you have a clear formulated mission, vision and strategy
in your company ?
• Are the BU strategies aligned with the company strategy ?
• Is there a discussion on strategy implementation within
your management meetings? How much time do you spend on it ?
• Are your personal goals (MBO) aligned with the company strategy ?
• ...are the projects clearly approved and prioritized according
to their strategy contribution ?
• Are you sure that your management reporting reflects the
status of your key success factors or the strategy implementation ?
6
Company Challenges : Strategy Execution
The People Barrier
Only 25% of managers have
incentives linked to strategy
The Vision Barrier
Only 5% of the work force
understands the strategy
9 of 10
companies fail
to execute
strategy
The Management Barrier
85% of executive teams spend
less than one hour per month
discussing strategy
The Resource Barrier
60 % of organizations don’t link
budgets to the strategy
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
7
What is needed for a successful Strategy Execution?
Objectives
+
Competencies
+
Actions
+
Resources
+
Motivation
+
Information
=
Intendent
Change
Objectives
+
Competencies
+
Actions
+
Resources
+
Motivation
+
Information
= Confusion
Objectives
+
Competencies
+
Actions
+
Resources
+
Motivation
+
Information
=
Anxiety
unsuccessful
Objectives
+
Competencies
+
Actions
+
Resources
+
Motivation
+
Information
=
Objectives
+
Competencies
+
Actions
+
Resources
+
Motivation
+
Information
=
Frustration
Objectives
+
Competencies
+
Actions
+
Resources
+
Motivation
+
Information
=
Little Change
Objectives
+
Competencies
+
Actions
+
Resources
+
Motivation
+
Information
=
Chaos
Implementation
8
The Balanced Scorecard!
Financial
Finanzielle
Perspektive
Finanzielle
Perspektive
Increased Clarity
Customer
/ Market
Kundenperspektive
Kundenperspektive
“To achieve our vision, how
wir
wir für
für
unsere
Kunden
must
weunsere
look toKunden
our
für
“Was leisten
leisten
wir
für
“If we “Was
succeed,
howwir
will
we
unsere
unsereKapitalgeber,
Kapitalgeber,um
um den
den
finanziellen
Erfolg
finanziellen
Erfolg zu
zu
look to
our Shareholders
?“
erhöhen?
erhöhen?
Vision/
Strategy
zu
zu verwirklichen?"
verwirklichen?"
customers
?“
Better
Committment
Better
Balance
Struktur
Processes
Struktur-- und
und
Prozessperspektive
Prozessperspektive
“To satisfy our customers,
optimiert
werden,
um
optimiert
werden,
at which processes um
zufrieden
zu
zufrieden
zu stellen?”
stellen?”
must
we excel
?“
Mitarbeiter/Lern
Mitarbeiter/Lern
und
Learning
& Growth-- und
Entwicklungsperspektive
Entwicklungsperspektive
“To achieve
process
excellence
“Wie
können
wir
“Wie können wirdurch
durch
Innovation
und
Innovation
und Lernen
Lernen
howunseren
must
our
organization
-unserenBeitrag
Beitragzur
zurWert
Wert
schöpfung
verbessern?"
schöpfung
verbessern?"
learn and improve
?“
Implementation is
controllable
9
The Balanced Scorecard Story!
Source: Kaplan/Norton 2009
10
The Reasons for BSC implementation?
Support of a successful Strategy
Implementation
69%
Better Communication of the
Strategy
59%
Enhancement in « Cause & Effect
Relations » Thinking
43%
61%
Better Objective Accountability
0%
10%
18%
42%
20%
30%
40%
28%
50%
60%
70%
2%
4%
13%
35%
20%
6%
10%
24%
43%
Improvement of the
Organization Learning
6% 1%
33%
43%
Put in place of a common Strategy
Understanding
Very important
Relatively important
Little importance
Not important
24%
80%
2%
4%
10%
90%
100%
Source: Study “100 x BSC”, Horváth & Partners
11
Agenda
•
•
•
•
•
What is the Balanced Scorecard ?
How to implement a Balanced Scorecard Project?
Unicredit Tiriac Bank Example
Overview Oracle Strategy and Scorecard Solution
Q&A
<Insert Picture Here>
12
The Balanced Scorecard House
BSC
Project Management (A)
Business Content
Information Technology
Strategic
BSC
SW
Data
Foundation
Model
Solution
Management
(B)
(C)
(D)
(E)
Change Management (F)
13
Project Management (Module A)
• Project Initialisation
Project Organisation
Sponsor
(CFO)
 Clarify Starting Point
 Buy in Top Management
Steering Commitee
Core Team
 Clarify Objectives
Projectsteering
Work Group
(Content)
Work Group
(Technical)
Project Plan
• Project Execution
 Project Plan
 Project Organisation
 Project Documentation
Jan
Woche
2
3
4
Feb
5
6
7
Projektstart
Modul A
Project
Management
Modul B
Strategic
Foundation
Modul C
BSC
Architecture
Workshop1
Kick Off: 13.1.03, (1/4 Tag)
•Klärung Ausgangslage
•Klärung Zielsetzung
8
Mar
9
10 11
12
Apr
13
14
Workshop 1: (4.2.03, 1/2 Tag)
•Klärung und Erläuterung
Leitbild
•Stakeholderanalyse
Teilnehmer
alle
Workshop2
Sitzung 1: (18.2,1/4 Tag)
•Verabschiedung Ziele u.
•Ursache-/Wirkungsbeziehungen
Modul E
SW/Data
Management
Teilnehmer:
alle
Change
Management
Workshop 2: (11.2.03, 1/2 Tag)
•Ausarbeitung strategische Ziele
•Entwicklung Ursache-/
Wirkungsbeziehung
16 17
18
19
20 21
Workshop 4: (18.3.03, 1/2 Tag)
•Definition Zielwerte u.
•Verantwortlichkeiten
Teilnehmer:
alle
Workshop3
Workshop3
Modul D/E
15
Mai
Workshop 3: (26.2.03, 1 Tag)
•Definition Messgrössen
•Definition Aktionen
Teilnehmer:
Core team/alle
Sitzung 3: (20.3,1/2 Tag)
•Verabschiedung Zielwerte u.
•Verantwortlichkeiten u.
•BSC Konzept
Sitzung 2: (11.3,1/4 Tag)
•Verabschiedung Messgrössen u.
•Aktionen
Teilnehmer:
Core team/alle
Kick Off
Workshops
Meeting Steering Comitee
14
Strategic Foundation (Module B)
Vision - Strategy - Check
SWOT
Markets/Products
Actual/ Future
Vision
Internal
View
External
View
Strengths
Opportunities
Competitors
Weaknesses
Threats
Deficits
Gaps
Strategy:
Strategic Priorities
Common Strategy Understanding
15
Balanced Scorecard Model (Module C)
•
Strategy Map Shop
Strategic Objectives
Sustainable Growth
Operational Excellence
Improve
Profitability
Financial
•
Cause and Effect Chain
(Strategy MAP)
Improve Asset
Utilization
Improve Cost
Structure
Increase Revenue
Customer
Retain Existing
Customers
Acquire New
Customers
Improve Customer
Profitability
Offer an Optimal Customer
Value Proposition
•
KPI‘s
Optimize Product
Availability
Quality of Product
Presentation
Processes
Optimize Supply
Management
Balanced Scorecard
•
•
•
Owners
Enhance Advertising
Effectivity
Potential
Perspectives
A Class Supplier
Develop further the
Improve
Customer Focussed
Improve
Attitude
Targets
Initiatives
Financials
Customer/Market
Profitability
Improve Employee
Competencies
and
EBITDA
Motivation
% Gesamtkosten
Potentials
Targets
2003
Enhance Accessibility of
18%
Relevant
Customer
80
%
Information
Cost structure
vom Umsatz
% Vertriebs- und Verwaltungskosten
7 %
Force
Growth
Gesamtumsatz
900 Millionen Euro
Improve
Capital Expenditures
ROI
12%
Acquisition New Customers
Anzahl Neukunden
+ 5 %
Bind Customers
Optimal Value Proposition
Processes
KPI‘s
Strategic Objectives
Churn Rate
CSI
PR- Projekt
Shop UP- Projekt
2%
80 Indexpunkte
Focus on
A Classe Supplier
% Anteil der Produkte von A Klasse
Lieferanten
80 %
Improve Product
Presentation
Produkt-Visualisierungsindex
85 Indexpunkte
Use new Medias
Bestellvorgänge über Internet
+ 125 %
Improve employee Motivation
and Competencies
Austritte vonKey Employees
Mitarbeiterbefragungswerte
3%
85 % Indexwerte
Balanced Scorecard
Initiatives
Einführung eines Lieferantenbewertungssystems
Einführung Mitarbeiterbefragung
Feedbacksystemeüberarbeiten
16
BSC
1
•
2
•
Documents
3
•
4
•
Potencial
Strategic
Priorities
Process
Customer Finance
Balanced Scorecard Model (Module C)
Cause and Effect
Chains+ Explanations
Strategic Objectives
+ Explanations
Financial Perspective
Process Perspective

Improve W.C.-ratio

...

...

...





Improve strategic akquisition process
...
...
...
...
Customer Perspective
Learning & Growth Perspective






Establish innovator image
...
...
...
...




Create global group thinking of local
management
...
...
...
...
Strategic
Initiatives
KPI´s
and
Target
Values
Documentation of strategic goals and corresponding KPI´s
Strategic goal:
Goal-No.:
P3
Upper level strategic goal:
none
Person responsible for strategic goal:
Strategic goal definition (What shall be reached?):
Definition by negative separation (What does
not the
mean?):
strategic goal
Story of Strategy
Measurement:
Measurement No.:
Corporate level:
Person responsible for result:
P 3.1
1
Definition/Formula:
DEFINITION:
Person responsible for reporting:
FORMULA:
Data source:
Frequence of reports:
Person responsible for data:
Frequence:
17
BSC Model: Translate Strategy into Action (Module C)
18
18
Balanced Scorecard Solution (Module D)
•
BSC Logic
•
Presentation Content
•
Navigation
•
Different Data Inputs
•
Easy Maintenance
•
Company-wide
Distribution
19
Data Management (Module E)
•
Datasources
Data Management Architecture
Scorecard User
•
•
•
•
Data Transformation
Application Web Interface
BSC Application
Data Quality Assurance
SW- Datatransfer
Interfaces
DWH
Administration & Support
Quality Assurance
Data Input
KPI Data Mart
Loading Data
Business
Manual
Interface (Web Application)
KPI Interface
Divisions
ERP
Cubes
Excel
Slide 9
20
Change Management (Module F)
•
Communication
 Mobilisation
 Information
 Training
•
Integration in Management System
 BSC Review Process
 MBO
 Incentive System
21
Agenda
•
•
•
•
•
What is the Balanced Scorecard ?
How to implement a Balanced Scorecard Project?
Unicredit Tiriac Bank Example
Overview Oracle Strategy and Scorecard Solution
Q&A
<Insert Picture Here>
22
A Major Banking Group
UniCredit Group – at a glance*
Employees: ~162,000
Customers: ~ 40 million
Branches: ~ 10,000
Total assets: ~ EUR 1tn
Banking operations in 22 countries
International network spanning ~50 countries
Global player in asset management:
~ € 86 bn in managed assets
Market leader in Central and Eastern Europe
leveraging on the region’s structural strengths
*Data as of June 2010, UniCredit Group site
23
UNICREDIT TIRIAC BANK AT A GLANCE*
•
•
•
•
~ 3,000 employees
Over 500,000 clients
234 branches
20.5 bn RON total assets
*at 30 June 2010
24
OUR GROUP MISSION
We UniCredit people are committed to generating value for our
customers.
As a leading European bank, we are dedicated to the development of the
communities in which we live, and to being a great place to work.
We aim for excellence and we consistently strive to be easy to deal with.
These commitments will allow us to create sustainable value for our
shareholders.
25
25
Balanced Scorecard Project
January
Start
February
March
April
May
June
July
August
Project
Initialization
18.01
Workshops round 1
30.03
WS round 1 ready
28.05
WS round 2 ready
Workshops round 2
Consistency
Check
BALANCED SCORECARD CONCEPT
Start
Installation
07.06
BSC Concept Ready
Inplenion Support and coach implementation
Project Initialization
01.03
Design
07.06
Design ready
Build
25.06
Build ready
Test &
Training
Migr.
PROD
SCORECARD IMPLEMENTATION
January
February
March
16.07
T&T ready
26. 07
Go Live
Post Production Support
April
May
June
July
August
26
BSC Content Elaboration
0
1
Strategic Check
Definition and
Linkage of Strategic
Objectives
2
Definition of
Strategic
Measures
3
Definition of
Target Values
4
Definition of
Strategic Initiatives
5
Priorisation and
Budgeting of
Strategic Initiatives
 Finance
 Customers
 Processes
 Potentials
WS 1:
Strat.Objectives ,
Cause-and-effectchain
WS 2:
WS 3:
KPI´s, Target Values and Strat. Initiatives
Initiative Priorization and
Budgeting
27
BSC Rollout Structure
Rollout Type
OWN
DERIVED BSC
MIX
STANDARD
STRATIGIC INITIATIVES
BSC Communication
A
B
C
D
E
F
BSC Architecture - 13 scorecards
OWN
1. Company
DERIVED
DERIVED DERIVED
2. Retail
3. CIB&PB 4. CFO
Mix
8.Large Corp
Mix
9. Intl Cl/CBBM
Mix
10. Mid Corporate
Mix
11. PB
Mix
12. Markets
Mix
13. Real Estate
SI
Fin Adv & Prod
SI
GTB
Entity has an own strategy as starting point for the BSC elaboration
BSC elaboration is derived from Superior BSC and some own strategic input
Financial and L&G perspectives use objectives from superior BSC; individual objectives for customer and process perspective are included.
Same strategic objectives and KPI's as superior BSC but with own target values (e.g. Branch)
No BSC is elaborated. Only strategic initiatives are defined as contribution to the BSC objectives of superior entities.
No BSC is elaborated but the company and department BSC is communicated and explained.
DERIVED
5. GBS
DERIVED
14. IT
SI
Operations
SI
Org
SI
Fac. Man.
DERIVED
6. CRO
DERIVED
7. HR
Criterias for Rollout Type
Type A Type F
External Customer Relation (E) vs. Internal Customer (I)
Revenue Center (R) vs. Cost Center (C)
E
R
I
C
Strategic Importance
Contribution to Business Value
H
H
L
L
Independency related to other units
Size of the Unit
H
H
L
L
Diversification of unit
Complexity of Unit
H
L
L
H
Phase 1 (2010)
Phase 2 (2011)
Phase 2 (2011)
Phase 2 (2011)
Legend
High (H)
Little (L)
28
Strategy- and Operational Management Cycle
Stage: Adapt/Translate the Strategy
5Y Financial Plan
Bank Strategy Map
Bank KPIs
Bank targets
Bank Initiatives Portfolio
Identyfy the Stratex portfolio
Stage: Align the organization
BL/CL strategic maps
BL/CL KPI's
BL/CL targets
BL/CL Initiatives
Stage: Plan Operation/ Budgeting
Projects prioritization and CAPEX budgeting
Operational budget
Personal MBO
Stage: Monitor & Learn
Data collection & validation process in BSC
Monthly Operational Review Meetings
Quarterly Strategy Review Meetings**
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
The above described integrated and comprehensive closed-loop system links strategic planning with operational planning, execution,
feedback, and learning. The system has many moving parts and interrelationships, and it requires simultaneous coordination among all
line and staff units.
29
Agenda
•
•
•
•
•
•
Introduction
What is the Balanced Scorecard ?
How to implement a Balanced Scorecard Project?
Unicredit Tiriac Bank Example
Overview Oracle Strategy and Scorecard Solution
Q&A
<Insert Picture Here>
30
OSSM Offers
Strategy Management
• Graphic Visualizations of
Strategy:
– Strategy Maps
– Strategy Trees
– Cause and Effect Maps
– Custom Visualizations
• Scorecards
• Collaboration
– Initiatives
– Threaded Discussions
– Related Documents
– Action Links
– Agents
31
OSSM Offers
KPI Management
• Performance Tracking
– Against Target / Trending
– Threshold Assessment
• Ownership Definition
• Collaboration
– Threaded Discussions
– Related Documents
– Action Links
– Agents
– Drill to Analysis
– Watch Lists
32
OSSM Offers
An Interactive, Collaborative Environment
• Dashboard integration
– Embed scorecard visualizations
into dashboards to foster broad
interactive analyses
• KPI Agents
– To monitor performance
even when you can’t
• KPI & Scorecard Actions
– Align day-to-day decisions with your
corporate strategy
• Annotations & Overrides
– Collaborate and document exceptions
to prevent future recurrences
33
Agenda
•
•
•
•
•
•
Introduction
What is the Balanced Scorecard ?
How to implement a Balanced Scorecard Project?
Unicredit Tiriac Bank Example
Overview Oracle Strategy and Scorecard Solution
Q&A
<Insert Picture Here>
34