Applied PC Systems Strategy Map
by David M. Raab
DM News
August, 2007
Among the many kinds of reporting systems, the grandest
of all are “balanced scorecard” projects to measure compliance with business
strategy. These have evolved over the
years to combine strategy maps with balanced scorecards. Strategy maps define relationships among key
business objectives, while scorecards that measure progress towards meeting
those objectives.
The technology needed to build such systems is quite
simple. Even extending the scorecards to
show how specific projects and individuals support strategic goals isn’t very
hard. As a result, there are dozens of
products that support balanced scorecard projects. In practice, any decent reporting software can
do the work.
What has this to do with you as a direct marketer? It’s true that few companies will ask the
direct marketing department to pick the software for their enterprise balanced
scorecard project. But the balanced
scorecard approach is now so common that there’s a good chance somebody within
marketing will propose a scorecard system for internal use, or to show how
marketing has aligned itself with corporate objectives. That somebody might even be you. If this happens, you’ll need software to do
the job.
Of course, you could build something using your existing
reporting systems or, heaven forbid, Excel.
But the costs of doing this and then running a cobbled-together solution
make it a poor alternative to software designed for the task, if you can find
something at a reasonable price.
Strategy Map (Applied PC Systems Pty Ltd., www.strategymap.com.au) offers a
balanced scorecard system that’s free in its personal version (limited to one
user and one small project) and costs under $500 for unlimited enterprise use. The company provides extensive documentation
and free technical support. (Important
note: Applied PC Systems is an Australian company, not related to the
Chicago-based firm with Web address of www.strategymap.com.)
Clearly the price
is right. But, more important, Strategy
Map includes all the functionality you need for a balanced scorecard
project.
Users begin by naming their plan and defining static
components such as company name, vision, mission statement, and elements of a
SWOT (strength, weaknesses, opportunities, threats) analysis. These are simple text fields, but can be
linked to external documents or Web addresses.
The next step is to create the strategy map itself. This is done by placing boxes on a virtual
canvas and linking them with arrows. In
proper strategy map fashion, the boxes are aligned on rows that reflect
different types of objectives (called “perspectives”). The software lets you call these anything,
but the standard groups are financial, customer, internal processes and
organizational capacity building. The
lines indicate causal relationships, such as “reduced turnaround time [an
internal process] leads to on-time flights [a customer goal]”.
Objectives created on the map are used in building the
balanced scorecards themselves. This is
the critical link between the two concepts.
Strategy Map enforces a tight connection by storing the strategy map
objectives in a list and then linking them to goals defined on scorecards for
individual employees. These personal
goals are themselves then linked with measures and scores. Each measure in turn can be associated with
one or more activities (more often called “initiatives” in balanced
scorecard-speak). Activities are where
real work gets done: each has detailed attributes including date ranges and
multiple budget lines. The next version
of the software, due this fall, adds monthly buckets for planned and actual
income and expense for each activity. It
automatically uses these to calculate planned and actual profit.
Strategy Map’s bottom-up approach of assigning goals to
individuals is a departure from usual balanced scorecard practice, which starts
with enterprise-level goals and “cascades” them downwards through the
organizational hierarchy. Assigning
goals directly to individuals makes it easy to respond to any change in organization:
goals automatically follow individuals when they are moved from one unit to
another, or when the structure itself is reorganized (say, a branch office
moved from one region to another). Strategy
Map supports two levels of units within an organization and can aggregate
individual goals and measures upward along the unit hierarchy. The
system can also display scorecards for all employees within a particular organizational
unit.
As with objectives, Strategy Map maintains lists of
user-defined values for scorecard categories such as personal goals, measures,
and scores. This ensures consistency across
scorecards, lets users change value names without editing each scorecard individually,
and enables drill-down and cross reference reports that show all instances of a
particular value. Although the three
categories of goals, measures and scores would be a typical, the 3.0 version of
the system allows up to six categories.
These are arranged hierarchically within the scorecard—so, for example,
several scores could be assigned to one measure, and several measures assigned
to one goal. There are no constraints on the values across
categories, however, so any type of score could be assigned to any measure. It’s up to the user to ensure the assignments
make sense.
The system can display the scorecard in tree, Gantt chart
or table formats. This makes the
relationships among category values easily visible, particularly in the table
format, which automatically merges cells where appropriate. In addition to the six list-based categories,
users can add fields for text notes, document references, and gauges. The system can export scorecards in Word,
Excel, XML, HTML and several other formats.
This is a remarkably broad set of functions at a price
that can’t be beat. Unfortunately, the
user interface is somewhat idiosyncratic.
Instead of the standard menu bars, icons and methods familiar to Windows
users, Strategy Map employs alternatives that seem arbitrary and, in some
cases, distinctly inferior. For example,
instead of pop-up labels appearing when the mouse hovers over an icon, the
system displays instructions in a box placed elsewhere on the screen—forcing a
shift in focus. Still, the interface is
usable once you get the hang of it, so this is a speed bump, not a barricade. Given the over-all value of the product,
it’s worth the effort to learn a few quirks.
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David M. Raab is president of Client X Client, a
consulting and software firm specializing in customer value optimization. He can be reached at draab@clientxclient.com
and blogs at http://customerexperiencematrix.blogspot.com.