Project Performance Management Scorecard

Revision as of 19:06, 20 September 2017

Project Performance Management Scorecard

Theory

Balanced Scorecard

The idea of developing the tool came from that according to Robert Kaplan and David Norton^[1] it is impossible to measure efficiency with a narrow number of indicators. At the same time a company shouldn't have a large number and complex indicators it will lead to a lack of overview and giving a high possibility that the will not be used.

The Balanced Scorecard (BSC) is a usefull tool to help companies put their strategy into more comprehensive objects and Key performance indicators(KPI's).

It will also help the company avoid a to short sighted perspective. it is able to give companies a robust measurement and management system. With 3 elements that have a measurable indicators: Financial, Customer and Internal business, and at the same time a more soft type of indicators in the ability to learn and Growth.

The first edition consists of fire elements:

• Financial
• Custormer
• internal business process
• Learning and Growth

But it was build for a non-divisional organisation and was hard to implement in complex structure companies as well as public sector and non-profit organisation, and where therefore abandoned quickly ^[2]. The next generation gave a new measurement where they where based on strategic objective that could be linked together as a cause and-effect chain. This is done be linking the different KPI's in the different areas together. A Concept used in the BSC for define indicators is the "lead" and the "lack" indicators^[3]. "Lag indicators are the after-the event indicators like production, accident and more. They are useful for measure the progress both for a project på the company as well but can't be used to influence the future. The Lead indicators are useful in trying to change something or predict the future. It can be described as is process and predictive indicators. the hard part of the lead indicators is to be able to determine them in comparison to the lag indicators. As the lead indicators tries to predict the future it leaves a chance of being wrong and hard to choose the right ones.

Adjusted Balanced Scorecard

In order to make the BSC more useful for Project perspective a change in view is needed. So instead looking at customers the Adjusted balanced Scorecard (ABSC)^[4] will look at the stakeholders for the project. The new four key points are:

• Financial
• Stakeholders
• Internal Business
• Learning and Growth

To go away from a strategic point of view with the "lag" focused indicators being in focus, the "Lead" indicators will be used more to give some warning signals and actions to help meet the strategy. It can all in all be described as "Project performance management scorecard". It tries to achive succes by going after at set of objectives:

• Project strategy and objectives
• Project life cycle(PLC) objectives
• Project Management objectives
• Balanced Scorecard practices

Framework

To make the ensure the succes of using the the tool a series of implementations steps are required. These steps is used to enhance the learning process form the tool.

1. Make the Project objectives and the link to Project life cycle(PLC) if possible.
2. Establish the project management KPI's as defined as "Lag" indicators
3. Develop KPI's and PLC objects for "Lead" indicators
4. Use cause and effect when implementing the KPI's
5. specify the impact analysis framework
6. Keep watch to improve the project management process

Applications

Step 1:Make the Project objectives and the link to Project life cycle(PLC) if possible

Limitations

Annotated Bibliography

References

1. ↑ [Conceptual Foundations of the Balanced Scorecard] http://www.hbs.edu/faculty/Publication%20Files/10-074.pdf
2. ↑ [Balanced Scorecard] https://en.wikipedia.org/wiki/Balanced_scorecard
3. ↑ [Lead and lag indicators ] https://www.intrafocus.com/lead-and-lag-indicators/
4. ↑ [Project performance mangement using balanced scorecard(BSC) approach] http://sarasconsulting.com/downloadfiles/Manage%20project%20performance%20using%20balanced%20scorecard.pdf