A Balanced Scorecard Approach for Strategy- and Quality-driven pptx

Elsa.Cardoso@iscte.pt, mjtrig@iscte.pt, patricianarciso@iol.pt Keywords: Strategic Planning, Balanced Scorecard, Decision Support Systems.. 1 Introduction This paper describes a Balanc

A Balanced Scorecard Approach for Strategy- and Quality-driven

Universities

Elsa Cardoso*, Maria José Trigueiros*, Patricia Narciso*

*Instituto Superior de Ciências do Trabalho e da Empresa, Portugal

Elsa.Cardoso@iscte.pt, mjtrig@iscte.pt, patricianarciso@iol.pt

Keywords: Strategic Planning, Balanced Scorecard, Decision

Support Systems

1 Introduction

This paper describes a Balanced Scorecard Strategic System

integrated in the Decision Support Systems for University

Effectiveness and Efficiency (DSS-UEE) project, developed

at the Department of Sciences and Information Technologies

(DCTI) of Instituto Superior de Ciências do Trabalho e da

Empresa (ISCTE), a Management, Social Sciences and

Informatics University in Lisbon This Strategic System is

presented as the main system driving the departmental level

implementation of an effective Information Architecture at

ISCTE The Balanced Scorecard (BSC) approach was

selected due to its inherent characteristics: it enables the

planning of the strategy and its dissemination to all levels of

the organization; it identifies the initiatives necessary to the

execution of the strategy; and finally, it generates the

performance measures that will allow a quality-driven

information management of the University The paper

describes the development of the Strategic Information

System for the Creation and Restructuring of Higher

Education Degrees The relevance of this issue has acquired a

greater importance in Europe with the Bologna reforms,

which represent a unique opportunity for Universities to

reconsider their internal strategy and the quality of their

degrees The paper reports on the results achieved in the

development of this Strategic System applied to a case study:

the creation of a new Master degree (MSIAD)

1.1 Outline of the paper

This paper is organized in five sections Section 2 discusses

how the University Strategy must be regarded as a key issue

in the context of the Bologna process reforms Section 3

presents the DSS-UEE project, and the Decision Support

Systems (DSS) Architecture that is being specified to

effective and efficiently manage the academic information of

an university department This section contextualizes the

development of the Strategic System as the top layer of the

generic DSS Architecture Section 4 describes the adopted

Balanced Scorecard methodology used in the implementation

of the Strategic System Finally, in Section 5 the BSC approach is presented, applying the first phase of the methodology to a case study: the creation of a new Master degree

2 University Strategy and the Bologna Challenge

Corporate Strategy is, as defined by [1], the pattern of

decisions in a company that determines and reveals its objectives, purposes, or goals, produces the main polices and plans for achieving those goals It defines the range of business the company is to pursue, the kind of economic and human organization it is or intends to be, as well as the nature

of the economic and non-economic contribution it intends to make to its stakeholders Applying this broad definition of Strategy to Higher Education Institutions (HEI) entails the exercise of looking upon Universities as “companies” What are the current strategic objectives, purposes, or goals set down for the University? The “range of business” for HEI is related to the core research and teaching areas What is then the current University’s “range of business” in which we must promote excellence? Which plans and polices have been outlined to execute the strategic decisions in the University?

The stakeholders of the University are the students (our clients), the academic and administrative staff, the

institutional leaders, and the public community (which includes the market) Are all our stakeholders aware of the defined strategy of the University in their daily actions?

The fundamental mission of an University is, as defined in [2], the advancement of excellence in the creation, sharing and application of knowledge, typically described in terms of teaching, scholarship/research, and public service/outreach Three core business processes may be identified from this

mission statement: (1) the Teaching (or training) Process, related with the application of knowledge; (2) the Research

Process, associated with the creation of new knowledge; and

(3) the Sharing Process, the dynamic process of sharing

knowledge between the other two processes The values that

drive our University mission are innovation, progress, excellence, and trust The advancement will be responsible

for the evolution (i.e., continuous learning and growth) of all three processes (see Figure 1)

Teaching Sharing Research

THEORY

PRACTICE

EXCELLENCE

Teaching Sharing Research

THEORY

PRACTICE

EXCELLENCE

Figure 1: Dynamics/Evolution of the Academic Business

Processes The Bologna process represents a great opportunity for

Universities to improve both institutional quality and their

strategic management capacity To improve institutional

quality we need to improve the internal business processes in

the core business areas of teaching, researching, and public

service (as defined by the University mission statement) The

main challenge for HEI in the future will be to turn the

different reforms into everyday reality for both teachers and

students [3] Legislative changes must be translated into

meaningful academic strategic objectives and into

institutional realities As mentioned in the Graz Declaration

[4], successful implementations of reforms require

leadership, quality, and strategic management within each

institution

The role of the Information Architecture in Higher Education

(HE) has been largely discussed and implemented in virtual

campus and e-learning environments However, DSS or

Business Intelligence Systems, and particularly Strategic

Information Systems are also a very important layer of this

architecture Although often overlooked, these are valuable

instruments that enable quality-driven Universities to

effectively define and implement a “HE business” strategy

The Balanced Scorecard (BSC) [5] is an example of a

Strategic System that has been widely and successfully used

by many organizations in the for-profit, non-profit and public

business domains We, as others [2], have chosen the BSC

system to be applied to HEI in the implementation of an

University’s quality-centred Information Architecture

Moreover, we believe that the usage of a BSC system is a

step towards the fulfilment of the Bologna reforms The BSC

tool should be used with the full extend of its three elements

[6]: a measurement system (as originally designed in 1990 by

Kaplan and Norton [5]), a strategic management system, and

a communication tool involving all academic stakeholders

into a new culture of “strategy and quality awareness”

3 The DSS-UEE Project

The Decision Support Systems for University

Effectiveness and Efficiency project, with the

acronym DSS-UEE, is a research project

developed at the Department of Sciences and

Information Technologies (DCTI) of Instituto

Superior de Ciências do Trabalho e da Empresa (ISCTE), a

Management, Social Sciences and Informatics University in Lisbon

The main objective of this project is the specification and

implementation of a generic Decision Support System

architecture [7] to assist the academic stakeholders in their

daily job decisions towards the fulfilment of the University

long-term decisions or planned goals The idea is to inspire change by implementing Business Intelligence technologies

of proven utility, which will guide the University into a new culture of self-assessment and self-effectiveness, as defined

in [7] The second objective of the project is the Architecture's development, using an iterative DSS development process [7] based on short time-to-market implementations, and two case studies: one at ISCTE and another at a different university The theory and practice of business management has shown that culture changes occur very slowly It is necessary to gradually lead people to decide guided by their goals within the limits of the organization’s values Hence, another objective of this project concerns the evaluation of the stakeholders’ acceptance, the systems’ usage and the cultural changes occurred

To inspire cultural changes in Portuguese Universities, motivation should be used rather than imposition Traditionally, these Universities do not have a hierarchal structure, as professors have freedom to decide and manage

their own courses At the same time we collect data from

professors we have to give them back some return, in terms

of the required information for decision-making, and to foster

a new culture of self-effectiveness and efficiency Collection

of data must be justified by strategic objectives If data is required without declaring its strategic purpose there will often be resistance to provide it This situation is more evident in Mediterranean cultures that are not so comfortable with performance evaluation and control, as others are Information Technologies (IT) play an important role in this process and we need to motivate professors to use them The DSS architecture is organized in three upper layers of systems on top of the Operational Systems (see Figure 2) enabling the iterative strategic planning, monitoring, and evaluation of performance of a HEI [7] They are: (1) the

Monitoring and Evaluation Systems; (2) the Strategic System; and (3) the Planning System

A central activity in the DSS-UEE project is the definition of the Business Model for strategy- and quality-driven Universities The concept of quality assumed for a HEI engages all Academic Stakeholders into a new culture of self-assessment and permanent improvement in pursuit of excellence of the business processes A business model based

on the quality concept should enable a fast and clear assessment of the degree of accomplishment in satisfying the needs and expectations of Academic Stakeholders Moreover,

it should enable the evaluation of the propagation or communication of the University strategy to individual Academic Stakeholders The Business Model is the fundamental input of the Strategic System This paper

describes the Strategic System that is been developed at

ISCTE since the end of 2003 The case study of Section Five

presents the results achieved in the development of the

Strategic Information System for the Creation and

Restructuring of Higher Education Degrees

OPERATIONAL SYSTEMS

MONITORING AND EVALUATION SYSTEMS PLANNING SYSTEM STRATEGIC SYSTEM

OPERATIONAL SYSTEMS

MONITORING AND EVALUATION SYSTEMS PLANNING SYSTEM STRATEGIC SYSTEM

Figure 2: DSS Architecture The Monitoring System provides the diagnosis of the current

state of affairs of business processes This system will include

the specification of a large set of dashboard indicators with

the relevant data for evaluation of the current status This

layer has been presented at [7, 8] with a prototype

implementation of a Data Warehousing Monitoring System

The Evaluation System is the complementary part of the

Monitoring System Together they constitute a Management

Control System These systems will enable not only to assess

the current state of affairs of the University but also to

evaluate if the organization has reached the desired state of

affairs, i.e., the defined strategy

The specification of the Planning System comprises two

subsystems, one for the creation and analysis of alternatives

and another for time-management The Planning subsystem

for creation and analysis of alternatives will be based on

model-driven DSS and knowledge management systems

associated with the specific decision processes of a HEI

Given the input provided by this subsystem, the aim of the

other Planning subsystem (for time-management) is to plan

the action steps the decision-maker needs to carry out to

implement the decision The output of this subsystem will be

a plan, i.e., a detailed schema or method for attaining the

objective of the decision taken This is actually a crucial point

of the overall DSS Architecture, since goals can only be

accomplished when tasks are assigned Therefore, this

subsystem will integrate common individual and project time

management tools

4 The “9 Steps to Success” BSC Methodology

The 9 Steps to Success methodology [10] was developed by

the Howard Rohm Consultants, LLC company, in 2001 The

methodology identifies two phases (see Table 1): Building

the Scorecard, and Implementing the Scorecard At the end of

the first six steps (Phase One), the high-level organizational

Balanced Scorecard is developed Building a scorecard is an

iterative process Typically, it takes at least three iterations to

fully build and implement a BSC system The execution of

the nine steps of the methodology constitutes a single

iteration It is important to remember that the BSC is a

management information system that is supported by

measures of performance (or key performance indicators) These measures help to: (1) optimize strategy and manage organizational activities; (2) test strategies; (3) evaluate results and accomplishments; and (4) make corrections to strategy to reflect learning

Phase One: Building a BSC Performance System

ƒ Conducting an Organizational Assessment

ƒ Defining Strategic Themes

ƒ Choosing Perspectives and Developing Objectives

ƒ Developing a Strategic Map of the Organization

ƒ Defining Performance Measures

ƒ Developing Initiatives

Phase Two: Implementing the Balanced Scorecar d

ƒ Computerizing and Communicating Performance Information

ƒ Cascading the Scorecard throughout the Organization

ƒ Using Scorecard Information to Evaluate and Improve Performance

Table 1: The 9 Steps to Success Methodology [10]

Phase One: Building a BSC Performance System

STEP 1: Conducting an Organizational Assessment The key

components of organizational assessment are: (1) Analysis of the organization (usually through the exercise of a SWOT analysis); (2) Creation of a “picture of the future”; (3) Organizational commitment to performance-based management; (4) Selection and empowerment of the BSC sponsor and team; and (5) Elaboration of the BSC project plan and timetable The third above mentioned component represents a significant cultural change, since it involves a management commitment to change, a commitment to the concept of ownership and responsibility for actions at every level of the organization, and an organizational commitment

to a BSC performance framework

STEP 2: Defining Strategic Themes This step encompasses

the following actions: (1) Definition of the mission and vision

of the organization; (2) Definition of the customer value proposition; (3) Development of strategic themes; and (4)

Development of business strategies The Mission statement

defines the core purpose and the values of the organization

An effective mission should inspire change, be easily understood and communicated, and be long term in nature

[6] The Vision statement provides a picture of what the

organization intends to become in the future (3 to 5 years)

Values are the timeless principles that guide an organization,

demonstrated through the day-to-day behaviour of all

employees The Strategic Themes define the long and

short-term value propositions for the customers They are the main focus areas of the business and allow the organization’s vision to be decomposed into specific business strategies that

people can work on Business Strategies are the detailed

operational game plans describing what is to be done and how it is to be accomplished [10] Strategies are hypotheses

to be tested, and if needed, changed to meet new challenges and opportunities

STEP 3: Choosing Perspectives and Developing Objectives

The key components of this step are: (1) Selection of scorecard perspectives; (2) Definition of strategic objectives; and (3) Categorization of objectives by strategic theme and

perspective Perspectives are used to help decompose

strategy into operational terms Kaplan and Norton originally

designed the Scorecard with profit-seeking enterprises in

mind, and developed four broad perspectives to satisfy that

group: Financial, Customer, Internal Processes, and

Employee Learning and Growth For public and non-profit

organizations financial measures still have a place in the BSC

but they don’t represent the main focus, since these

organizations don’t exist to produce wealth for the

shareholders The scorecard perspectives can be renamed and

new perspectives may be added to the model A Strategic

Objective is a measurable statement of strategic intent

indicating how a strategy will be made operational [10]

Objectives are the basic building blocks of strategy – the

components or activities that make up complete business

strategies

STEP 4: Developing a Strategic Map of the Organization

This step encompasses the following actions: (1)

Identification of the cause-and-effect relationships between

strategic objectives; and (2) Creation of the Strategic Map In

a Strategic Map the components of the strategy, i.e., the

objectives, are connected through cause-and-effect

relationships (if-then logic connections) and placed in the

appropriate scorecard perspectives These relationships are

defined among objectives that are causes (performance

drivers) and objectives that are effects

STEP 5: Defining Performance Measures The key

components for defining performance measures are: (1)

Development of results (outcome) and process measures; and

(2) Definition of expected targets and thresholds

Performance Measures must be developed to track both

strategic and operational progress In order to do so, it is

necessary to understand the desired outcomes (i.e., results,

accomplishments) and the processes used to produce

outcomes Desired outcomes are measured from the

perspective of internal and external customers, whereas

processes are measured from the perspective of the process

owners and the activities needed to meet customer

requirements For each measure, targets (i.e., desired level of

performance) and upper and lower thresholds must be

defined

STEP 6: Developing Initiatives Initiatives are key action

projects that need to be funded and implemented to ensure

that the defined strategies are successful The list of candidate

initiatives must undergo a selection process based on well

defined criteria, such as resources required, potential impact

on strategy, and time needed

Phase Two: Implementing the BSC

This phase comprises three steps: (7) Computerizing and

Communicating Performance Information; (8) Cascading the

BSC throughout the Organization; and (9) Using Scorecard

Information to Evaluate and Improve Performance To

computerize data means dealing with several issues such as

data quality, validation, and ownership Cascading is the

process of developing scorecards for every level of

organization and aligning the scorecard elements through all layers of the organization (e.g., business units, teams and individuals)

5 A BSC Approach for the Creation and Restructuring of Degrees in Higher Education

The processes of creating and restructuring degrees are closely related Restructuring may in fact be regarded as a

“re-creation” of the degree As such, we have started to investigate the degree creation process as a strategic issue linked to the core of the University’s mission The case study began with the creation of a new Master degree in Decision Support Systems at ISCTE [9], using a strategic approach A Balanced Scorecard system has been developed to support each step of the creation of this specific degree Given this starting point, the next step of the case study will comprise the development of a generic BSC approach for the creation

of HE degrees This work is being accomplished at the same time the system is being used by the DCTI Department of ISCTE to support the Bologna curricula reforms

In Portugal, the current Bologna reforms discussions concern the restructuring of the five-year undergraduate degrees in order to make them compatible with the Bologna system based on two cycles At ISCTE, and particularly at the DCTI Department, the Bologna process has been actively discussed

by all members of the academic staff A Restructuring Coordination Commission (RCC) has been empowered to implement the changes in the curriculum of the degrees offered by the Department The objective is to supervise and coordinate the restructuring process using the DSS-UEE Strategic System, and the proposed methodology for the Creation and Restructuring of Degrees in Higher Education The current topics subject to discussion at ISCTE, and generally in other Portuguese universities, concern the best duration of each cycle, and the consequent adaptation of the curricula to fit the chosen duration and still provide the students with the required competences at each cycle An important hurdle is the lack of a measurement system to provide some insight or some sort of guarantee that with a shortening of undergraduate training duration – but with a quality-driven teaching – our students will still be taught the right set of competences that will give them the desired employability It is important that the Bologna degrees’ restructuring will not become a formal readjustment and slicing of courses in the current study plans over the two cycles Instead it should be regarded as a great opportunity to implement a profound redesign of curricula in light of the desired output students profiles and training of core skills

5.1 Case Study: the BSC-MSIAD System

This section describes the results achieved in the early phases

of development of the Strategic System for Creation of the MSIAD Degree – a new Master degree in Decision Support Systems that will be offered by ISCTE in the next academic year [9] This Strategic System is based on a Balanced

Scorecard approach, implemented using the Nine Steps to

Success methodology, described in Section 4 The system is

been developed using the SAS Strategic Performance

Management platform

STEP 1: Conducting an Organizational Assessment

A SWOT (Strenghts, Weakness, Opportunities, and Threats)

Analysis of the Department has been conducted The

principal strengths identified are the existent fruitful

partnerships between the Department and the business

companies in the IT area, and the scientific competencies of

professors in integrating areas of Informatics & Management

and Informatics & Telecommunications For several years

now these partnerships have generated an active participation

of companies in final-year student projects, promoting a rich

sharing of knowledge between the University and the

Business and Industrial Community A BSC team has been

established The BSC-MSIAD project is being developed in

the context of a Master and PhD thesis

STEP 2: Defining Strategic Themes

MSIAD is an advanced training degree with the mission of

providing to the market skilled professionals capable of

managing, specifying, implementing, and using successfully

Decision Support Systems properly integrated in the

information management of the organization Currently,

companies feel the urge to provide the decision-makers with

the necessary information to increase their ability to analyse,

plan, and react In spite of the large volume of data gathered

from transactional databases (operational systems) and the

existing information analysis techniques, the difficulty of

generating the key performance indicators (KPI) that give us

an objective view of the business’ reality (in real-time) still

persists The no so bright reality is that the failure rate of Data

Warehousing projects is thought to be around 70% to 80%

[11] Thus, the vision set out for MSIAD is to train skilled

professionals with the necessary competencies to enhance the

success rate of Business Intelligence (BI) projects in Portugal

In order to achieve this vision, two strategic themes have

been defined, as displayed in Figure 3 The first one Provide

an advanced training adequate to DSS Projects will be

accomplished with the Quality Assurance, and the Focus on

Market Demands business strategies The second strategic

theme: Develop synergies between the business world and the

university is decomposed in two other business strategies:

Market Approach, and R&D Empowerment

STEP 3: Choosing Perspectives and Developing Objectives

The traditional four perspectives proposed by Kaplan and

Norton have been selected for the scorecard: Customer &

Stakeholders, Financial, Internal Processes, and Learning &

Growth We have decided to add the Stakeholders dimension

to the Customer perspective To put the business strategies

into operation, eight strategic objectives have been identified

(as presented in Figure 3) as well as a number of

sub-objectives These objectives have then been categorized by

perspective

Figure 3: Strategic Themes, Business Strategies and

Objectives

STEP 4: Developing a Strategic Map of the Organization

The Strategic Map of the MSIAD degree representing the cause-and effect relationships among objectives and sub-objectives is displayed in Figure 4

We have selected a different layout for the Strategic Map with both the Customers & Stakeholders and the Financial perspectives at the top Although the degree has been created with the uttermost objective of maximizing customer satisfaction with the level of service provided (i.e., teaching), financial restrictions are preponderant, determining the existence of the degree Financial profitability (which is dependent on the number of students) became a basic requirement in the Bologna context It must be clear that the aim of the degree is not to generate profit, but to have financial independency The strategic imposition of balanced accounts (incomes and costs) will enable to invest as much as possible in the quality of the training provided to students, and as such benefiting the customer

STEP 5: Defining Performance Measures

Performance measures have been identified for each objective and sub-objective To exemplify this step, let us consider the

quantification of the sub-objective 2.2: Training evaluation

This sub-objective is measured using a weighty average of three KPI, as displayed in Table 2

The selection of these high-level indicators is the result of a strategic analysis of the set of indicators generated in the Course Performance Evaluation Data Mart [12] specified in the SADIA System, a DSS for IST Academic Information [8]

Real approval rate (Nb approved students) / (Nb evaluated students) 30% Final retention

rate

(Nb enrolled students – Nb approved students) / Nb enrolled students 40% Learning indicator Average classification of evaluated students 40%

Table 2: Performance measures of Sub-objective 2.1

Customer & Stakeholders Financial

Internal Processes

Learning & Growth

1 Training with Quality

1 Training with Quality

5 Adequate training to market demands

5 Adequate training to market demands

4 Secure financial profitability

4 Secure financial profitability

4.1 Guarantee the sufficient number

of students

6 Establish partnerships with

BI experts

6 Establish partnerships with

BI experts

1.1 Provide a scientific training component adequate to the desired professio-nal profile

1.2 Provide a pedagogic training component adequate to

the desired professio-nal profile

6.2 Involve business experts in training

1.3 Promote concept coherence between acade-mic scientific areas

6.1 Establish synergies with companies

infor-mation sharing between business community and University

7 Promote infor-mation sharing between business community and University 7.1 Promote conferences and work-shops to divulge academic and business projects

2.1 Promote a

cultu-re of monotoring/evalua-tion and management

by objectives

2.2 Training evaluation

2 Adequate monitoring and evaluation

2 Adequate monitoring and evaluation

3 Adequate infrastructures

3 Adequate infrastructures

3.1 Infrastructures and resources adequate to training needs

4.2 Effective and efficient management

of administrative processes

3.2 Foster a stimulant working environment

8 Generate BI R&D 8.1 Produce academic thesis

8.3 Promote regular publishing

8.2 Develop R&D projects

1.4 Promote pedagogical training activities to lecturers

Figure 4: Strategic Map of MSIAD

Future Work

A list of initiatives with a foreseeable implementation during

the next academic year have already been identified Phase

One of the methodology is now completed, and the

implementation of the BSC-MSIAD (Phase Two) using the

SAS Strategic Performance Management platform (version

1.4) is ongoing

6 Conclusions

The paper describes the development of the Strategic

Information System for the Creation and Restructuring of

Higher Education Degrees This system generates, but most

of all justifies, the performance measures that will allow a

strategic- and quality-driven information management of the

University The most valuable and motivating information is

the one that make changes happen in the desired direction A

well defined and synthetic strategic information, as the

strategic map in Figure 4, guides stakeholders in their daily

actions to “begin with the end in mind”, towards the

excellence in the creation, sharing and application of

knowledge – the University mission!

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