Objective

An objective is a specific step, a milestone, which enables you to accomplish a goal. Setting objectives involves a continuous process of research and decisionmaking. Knowledge of yourself and your unit is a vital starting point in setting objectives.

 the result expected by the end of the budget (or other designated) cycle Setting right objectives is critical for effective performance management. Such objectives as higher profits, shareholder value, customer satisfaction may be admirable, but they don't tell managers what to do. "They fail to specify priorities and focus. Such objectives don't map the journey ahead - the discovery of better value and solutions for the
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 The objectives must be: be focused on a result, not an activity be consistent be specific be measurable be related to time be attainable

 MBO: Setting Objectives In Management by Objective (MBO) systems, objectives are written down for each level of the organization, and individuals are given specific aims and targets.

 Management by objectives (MBO) is a systematic and organized approach that allows management to focus on achievable goals and to attain the best possible results from available resources.

Financial objective
An x % increase in annual revenues Annual increase in after-tax profits of x percent Annual increase in EPR Annual dividend increase Larger profit margins An x % ROCE and ROE Increase share holder value Strong credit and bond rating Sufficient internal cash flow Stable earning during recession

Balanced Scorecard
The balanced scorecard is a strategic planning and management system that is used extensively in business and industry, government, and nonprofit organizations worldwide to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals.

Strategic Objectives
Winning an x percent market share Achieving lower overall costs that rivals Overtaking key competitors on product performance or quality or customer service Deriving x percent of revenues from the sale of new product introduced within past five years Achieving technological leadership Having better product selection than

 Strengthening the companys brandname appeal Having stronger national or global sales and distribution capabilities than rivals Consistently getting new or improved products to market ahead of rivals

 Thebalanced scorecard(BSC) is a strategicperformance managementtool - a semi-standard structured report, supported by proven design methods and automation tools, that can be used by managers to keep track of the execution of activities by the staff within their control and to monitor the consequences arising from these actions.

 The original thinking behind Balanced Scorecard was for it to be focused on information relating to the implementation of a strategy, and perhaps unsurprisingly over time there has been a blurring of the boundaries between conventional strategic planning and control activities and those required to design a Balanced Scorecard.

A Balanced Scorecard approach is to take a holistic viewof an organization and coordinate MDIs so that efficiencies are experienced by all departments and in a joined-up fashion. To embark on the Balanced Scorecard path an organization first must know (and understand) the following: The company's mission statement The company's strategic plan/vision Then The financial status of the organization How the organization is currently structured and operating The level of expertise of their employees Customer satisfaction level

Balanced Scorecard design process:

Translating the vision into operational goals; Communicating the vision and link it to individual performance; Business planning; index setting Feedback and learning, and adjusting the strategy accordingly.

The four perspectives

Financial: encourages the identification of a few relevant high-level financial measures. In particular, designers were encouraged to choose measures that helped inform the answer to the question "How do we look to shareholders?" Customer: encourages the identification of measures that answer the question "How do customers see us?"

 Internal Business Processes: encourages the identification of measures that answer the question "What must we excel at?" Learning and Growth: encourages the identification of measures that answer the question "Can we continue to improve and create value?".

Department Finance InternalBusiness Processes Learning&Growth

Customer

Areas ReturnOnInvestment CashFlow ReturnonCapitalEmployed Numberofactivitiesperfunction FinancialResults(Quarterly/Yearly) Duplicateactivitiesacrossfunctions Processalignment(istherightprocess intherightdepartment?) Processbottlenecks Istherethecorrectlevelofexpertise Processautomation forthejob? Employeeturnover Jobsatisfaction Deliveryperformancetocustomer Training/Learningopportunities Qualityperformanceforcustomer Customersatisfactionrate Customerpercentageofmarket Customerretentionrate

system company-wide should be the key to the successful realisation of the strategic plan/vision. A Balanced Scorecard should result in: Improved processes Motivated/educated employees Enhanced information systems Monitored progress Greater customer satisfaction Increased financial usage

balance scorecard implementation Implementing the Balanced Scorecard

There are many software packages on the market that claim to support the usage of Balanced Scorecard system. For any software to work effectively it should be: Compliant with your current technology platform Always accessible to everyone everywhere Easy to

ECI 's Balanced Scorecard Perspectives Questions Goals Newproducts. Customer Howdo Responsivesupply. customerssee Preferredsupplier. Technology Internal Whatmustwe Customer Manufacturing us? Designproductivity. capability. partnership. business excelat? excellence. Newproduct introduction.

Measurements Percentofsales On-timedeliveryas Shareofkey fromnewproducts. definedbythe Manufacturing Numberof Cycletime,Unit account'spurchases. customer. Siliconefficiency geometryversusthe cooperative costandYield. Actualintroduction andEngineering competition. engineeringefforts. scheduleversus efficiency. planned introduction.

Innovation & learning Financial

Canwe continueto Howdowe improve& lookto createvalue? shareholders?

Technology Manufacturing Productfocus. leadership. learning. Timetomarket. Survive. Succeed. Prosper.

Timetodevelopthe Processtimeto Percentofproducts nextgeneration. maturity. Newproduct Cashflow. Quarterlysales thatequal80%of introductionversus Increasedmarket growthand sales. thecompetition. shareandReturnon operatingincomeby Equity. division.