The Balanced Scorecard and Oracle Architecture
The Balanced Scorecard and Oracle Architecture.
The Financial Outcome is the indicator of performance of the organization. Well, it’s true but at the same time it wouldn’t be wise to overlook those factors which influenced the financial output. For example, process performance, market share or penetration, long term learning and skill development, and so on. Now, the question arises is how we amalgamate all these factors into the business performance analysis; the answer we have is “Balanced Scorecard”. By not only focusing on the financial outcome but also on the operational, marketing and developmental inputs, the Balanced Scorecard helps provide a more comprehensive view of business, which in turn helps organizations act in there best long-term interests.
So we can define Balance Scorecard as:
“A business performance measurement and management system developed by Robert S. Kaplan and David P. Norton that analyzes organizational success by reviewing the combination of financial, customer, internal business process, employee learning and growth perspective. A balanced system includes both leading and lagging measures, aligning individual and departmental goals with overall corporate strategic objectives.”
The Balance Scorecard suggests that there are four different perspectives to be viewed from towards data and analyze it relative to each of these perspectives by developing metrics. These four perspectives are:
1) The Learning and Growth perspective
This perspective includes employee training and corporate culture attitudes related to both individual and corporate self-improvement. Metrics can be put into place to guide managers in focusing training funds where they can help the most. Kaplan and Norton emphasize that ‘learning’ is more than ‘training’; it also includes things like mentors and tutors within the organization, as well as that ease of communication among workers that allows them to readily get help on a problem when it is needed. It also includes technological tools; what the Baldrige criteria call “high performance work system.”
2) The Customer Perspective
In developing metrics for satisfaction, customers should be analyzed in terms of kinds of customers and the kind of processes for which we are providing a product or server to that customer group.
3) Financial Perspective
Kaplan and Norton do not disregard the traditional need for financial data. Timely and accurate funding data will always be a priority, and managers will do whatever necessary to provide it. With the implementation of corporate database, it is hoped that more of the processing can be centralized and automated. But the point is that the current emphasis on financial leads to the “unbalanced” situation with regard to other perspective. There is perhaps a need to include additional financial data, such as risk assessment and cost-benefit data, in this category.
4) Strategy Mapping
Strategy maps are communication tools used to tell a story of how value is created for the organization. They show a logical, step-by-step connection between strategic objectives (shown as ovals on the map) in the form of a cause-and-effect chain.
Following figure shows different perspectives of Balance Scorecard.
Fig1: Adapted from “The Balance Scorecard” by Norton and Kaplan
In more complex organizations, where there are multiple Balanced Scorecards to report, and a need for co-ordination of results between Balanced Scorecards (for example, if one level of Balanced Scorecard reports relies on information collected and reported at a lower level) the use of individual Balanced Scorecard reporters is problematic. Where these conditions apply, organizations use Balanced Scorecard reporting software to automate the production and distribution of these reports.
Now here is the opportunity to explore a new territory and make money out of it; and Oracle rightly picked that up by introducing its new product “Oracle Balanced Scorecard”. Oracle Business Scorecard (BSC) is a part of the Oracle Business Intelligence set of applications. This application turns performance management system into active management tool by enabling their deployment across organizations, using powerful, web-enabled graphical interface. The BSC links strategy to management action by placing the organization’s key performance indicators and data right on managers’ desktops, giving them a quantifiable targets to achieve, aligned with the organization’s strategy. Also by illustrating the cause-and-effect relationships between KPIs the Oracle Balance Scorecard provides managers with a clear understanding of how their decisions impact not only their direct area of responsibility, but also other departments, and the overall company strategy.
So, let’s have a closer look on the Oracle BSC Architecture.
Now we will discuss the system architecture of the BSC Viewer and the BSC Architecture modules.
Three tier Architecture for BSC Viewer
As this Balanced Scorecard is a part of Oracle Business Intelligence and in turn it’s an integral part of Oracle EBS Suit, it also has a three tier Architecture: a Database tier, a Web Server tier and a desktop tier. User connects to Balanced Scorecard through any Java enabled web browser. The web server tier provides business logic and generates dynamic web pages. The Presentation layer of the web server, which is the part of application tier, and the business logic for Balanced Scorecard are implemented as Java Servelets and Java Server Pages (JSP) running on Apache JServ, a module of Apache Web Server, implements the Java Servelet API running server side Java.
Balanced Scorecard shares the common Oracle Self-Service Web Application sign on to provide a common gateway to all Self-Service Applications. When you first access Balanced Scorecard, you will see the Oracle Self-Service Web Application home page. Enter your user name and password for authentication to begin your session. You will then be redirected to the Apache Web Server to begin Balanced Scorecard activity.
Architecture for BSC Architecture Modules:
BSC Architecture modules are installed in client-server mode connected to an enterprise database. The BSC Architecture modules include:
1) BSC Setup:
This is the tool used to setup the BSC system after installation. It is used to register BSC systems, administer database privileges, and import data, upgrade systems from previous releases, and migrate data between systems.
2) BSC Architecture:
This tool is used to setup balanced scorecards; create and configure indictors, groups and datasets, and set calculations and other options inside BSC tables where data is stored. There are three sub-modules.
Builder: Used to create indicators, groups and to assign KPIs to different balanced scorecards
KPI Designer: Used to arrange how KPIs are viewed and categorized, configure the functionality of scorecard formula and datasets, and generally tailor the design of the Balanced Scorecard for the user.
Metadata Optimizer: Used to evaluate all the datasets and dimensions specified for a balanced scorecard KPI, and then create an input table structure for populating data into the balanced scorecard. This is run after the changes are made in KPI Designer that affect the configuration of different indicators and groups.
3) BSC Manager:
This tool is used to load and configure the data in the BSC tables. It has two sub- modules as Loader and Administrator.
4) BI Builder:
The Oracle Business Intelligence Builder is a powerful HTML design tool allowing the configuration of performance management system with the flexibility of the BSC design model.
Increasingly, as Balanced Scorecard (BSC) concept becomes more refined with the help of sound architecture like Oracle, more and more organizations are looking for implementation of BSC as a Performance management tool into their organizations. Oracle BSC can be customized particular to various business sectors, thus expanding it’s horizon across industrial sectors providing best management practices to achieve excellent results in long term.