Note by James R. Martin, Ph.D., CMA
Professor Emeritus, University of South Florida
The purpose of this paper is to describe how United Methodist Publishing House implemented ABC and the balanced scorecard. My purpose is to provide a sketch of their balanced scorecard. I chose this paper for three reasons:
1. UMPH is a non-profit organization,
2. their scorecard is based on a few key measurements and
3. even though they are not a profit seeking company, the financial perspective is important to them.
The scorecard below is based on the discussions by Forsythe, Bunch and Burton, although they did not provide a scorecard illustration in the article.
|United Methodist Publishing House Balanced Scorecard|
|Financial||Produce revenues sufficient to cover expenses and provide reserves for the future||Increase in sales growth in relation to target|
|Achieve corporate earnings percentage in relation to target|
|Achieve ROI by each market business unit (profit center) in relation to target|
|Customer||Maintain ability to attract and retain customers||Customer satisfaction based on survey questionnaire|
|On time product development and delivery||Measures not specifically desired|
|Internal Process||Maintain an effective and efficient distribution system||Measure of error rates on shipments|
|Produce high quality, cost effective products||Measures not specifically defined|
|Maintain internal process effectiveness||Measures not specifically defined|
|Maintain infrastructure needed for long-term growth and improvement||Measures related to success in producing new products, projects and services|
|Maintain staff competence||Measures not specifically defined|
|Goals related learning - not specifically defined||Measures not specifically defined|
The authors mentioned the types of measures for all four perspectives, but did not describe specific measurements for most of their goals and objectives. However, the UMPH scorecard provides an example of a non-profit organization that places emphasis on the financial perspective. For more about non-profit scorecards, see the Kaplan and Norton 2001a summary.
Other Related summaries:
Kaplan, R. S. and D. P. Norton. 1992. The balanced scorecard - Measures that drive performance. Harvard Business Review (January/February): 71-79. (Summary).
Kaplan, R. S. and D. P. Norton. 1993. Putting the balanced scorecard to work. Harvard Business Review (September-October): 134-147. (Summary).
Kaplan, R. S. and D. P. Norton. 1996. The Balanced Scorecard: Translating Strategy into Action
Boston: Harvard Business School Press. (Summary).
Kaplan, R. S. and D. P. Norton. 1996. Using the balanced scorecard as a strategic management system. Harvard Business Review (January-February): 75-85. (Summary).
Kaplan, R. S. and D. P. Norton. 1997. Why does business need a balanced scorecard? Journal of Cost Management (May/June): 5-10. (Summary).
Kaplan, R. S. and D. P. Norton. 2000. Having trouble with your strategy? Then map it. Harvard Business Review (September-October): 167-176. (Summary).
Kaplan, R. S. and D. P. Norton. 2001. The Strategy-Focused Organization: How Balanced Scorecard Companies Thrive in the New Business Environment.
Harvard Business School Press. (Summary).
Kaplan, R. S. and D. P. Norton. 2004. Measuring the strategic readiness of intangible assets. Harvard Business Review (February): 52-63. (Summary).
Lyons, B., A. Gumbus and D. E. Bellhouse. 2003. Aligning capital investment decisions with the balanced scorecard. Journal of Cost Management (March/April): 34-38. (Summary).
Martin, J. R. Not dated. Balanced scorecard concepts. Management And Accounting Web. (Summary).
Martin, J. R. Not dated. Chapter 7: Activity Based Product Costing. Management Accounting: Concepts, Techniques & Controversial Issues. Management And Accounting Web. http://maaw.info/Chapter7.htm
Martinsons, M., R. Davison and D. Tse. 1999. The balanced scorecard: A foundation for the strategic management of information systems. Decision Support Systems (25): 71-88. (Summary).
Norreklit, H. 2003. The balanced scorecard: What is the score? A rhetorical analysis of the balanced scorecard. Accounting, Organizations and Society 28(6): 591-619. (Summary).
Paladino, B. 2007. 5 key principles of corporate performance management: How do Balanced Scorecard Hall of Fame, Malcolm Baldrige, Sterling, Fortune 100, APQC, and Forbes award winners drive value? Strategic Finance (June): 39-45. (Note).
Schonberger, R. J. 2008. Lean performance management (Metrics don't add up). Cost Management (January/February): 5-10. (Note: Schonberger criticizes the KPI or scorecard approach from the lean enterprise perspective. Summary).