Balanced Scorecard and PCMM
Please find the broad definition of BS and PCMM. You will see that they are separate business tools. But a linkage can be established, once the corporate strategy is very clear and well defined.
Balanced Scorecard?
The Balanced Scorecard is a powerful framework to help organizations rapidly implement strategy by translating the vision and strategy into a set of operational objectives that can drive behavior, and therefore, performance. Strategy-driven performance measures provide the essential feedback mechanism required to dynamically adjust and refine the organization's strategy over time. The Balanced Scorecard concept is built upon the premise that what is measured is what motivates organizational stakeholders to act. Ultimately all of the organization's activities, resources, and initiatives should be aligned to the strategy. The Balanced Scorecard achieves this goal by explicitly defining the cause and effect relationships between objectives, measures, and initiatives across each perspective and down through all levels of the organization. Developing a Balanced Scorecard is the first step in creating a Strategy-Focused Organization.
Balanced Scorecard is not a measurement, but a tool:
- Measure, analyze, and manage financial and operational performance.
- Translate strategic and tactical corporate objectives into individual performance measures.
- Link performance results with the processes that have driven those results.
- Align strategy with tactical operations.
- Leverage the value of all other IT applications.
What are the benefits of the Balanced Scorecard?
Organizations benefit from the use of the Balanced Scorecard in the following ways:
- Clarify the vision throughout the organization
- Gain consensus and ownership by the executive team
- Provide a framework to align the organization
- Provide structure for multiple initiatives
- Drive the capital and resource allocation process
- Integrate the strategic management process across the organization
- Focus teams and individuals on strategic priorities
What are the applications of the Balanced Scorecard?
Since the concept was introduced in 1992, the Balanced Scorecard framework has been adapted to meet a variety of organizational needs. Common applications include:
- Rapid strategy implementation
- Post-merger integration
- Joint venture/Alliance management
- IT strategy
- Human Resource strategy and compensation alignment
- Initiative Management and prioritization
- Enterprise transformation/change management diagnostic
- Communication with customers, suppliers, and shareholders
- Supplier management
- Capital budgeting/resource allocation and prioritization
Top management develops the strategy and the front line makes it happen. Employees must have a firm understanding of how their activities and attitudes contribute to the success of the overall organization.
How?
1. Communication and education programs for employees.
2. Individual and team objectives are linked to the strategy.
3. Incentives/rewards linked to the objectives/strategy.
The motivation for the PCMM is to radically improve the ability of software organizations to attract, develop, motivate, organize, and retain the talent needed to steadily improve software development capability.
The strategic objectives pursued in the PCMM are to:
- Improve the capability of software organizations by increasing the capability of their staff
- Ensure that software development capability is an attribute of the organization rather than of a few individuals
- Align the motivation of the staff with those of the organization
- Retain assets (i.e., people with extensive skills and capabilities) within the organization
The PCMM includes practices in the areas of:
- Staffing (includes recruiting, selection, and planning)
- Managing performance
- Training
- Compensation
- Work environment
- Career development
- Organizational and individual competence
- Mentoring and coaching
- Team and culture development
Hope this material is useful to you.
Regards,
Leo Lingham