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Balanced Scorecard As a Strategic Management Tool: the Case of Seagull AS

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Balanced Scorecard As a Strategic Management Tool: the Case of Seagull AS View metadata, citation and similar papers at core.ac.uk brought to you by CORE provided by Agder University Research Archive Balanced Scorecard as a strategic management tool: The case of Seagull AS By Knut H Mikalsen Masters Thesis in Information and Communication Technology Agder University College Grimstad, May 2003 Balanced Scorecard as a strategic management tool: The case of Seagull AS Abstract Can investments in IT help a company to achieve its overall strategy and vision? Research over several years has resulted in mixed findings but several studies shows that the IT investments actually can result in better performance for companies. To achieve this it is important to align the IT investments with the overall business strategy and vision. The aim of this thesis is to see how Porter’s theories on competitive strategy and Kaplan and Norton’s Balanced scorecard can help the company to specify an IT system for the Operations department. The main idea is that the IT investment will support the overall strategy and vision of the company and create better overall performance. Kaplan and Norton introduced Balanced Scorecard in 1992. The Balanced scorecard is a performance measurement method and also a strategic management tool having four different perspectives to the success of a company. The Balanced Scorecard does not only focus on financial performance, but also includes non- financial performance measures and objectives driving towards better performance. The main results of the thesis were that the problems of the company were identified and the corporate vision and strategic objectives were clarified. Objectives and targets at corporate, departmental and technology level have been developed to increase overall performance. The main conclusion of this thesis is that in the case of Seagull AS the Balanced Scorecard can help the company to create better performance. The Balanced Scorecard can help the Operations department to invest in an IT system that supports the overall strategic objectives of the company. ii Balanced Scorecard as a strategic management tool: The case of Seagull AS Preface This thesis was written for Seagull AS and is part of the Norwegian Master equivalent “Siv.Ing” degree. The work has been carried out in the period between December 2002 and May 2003 and most of the work has taken place in Seagull offices in Horten. The writing of the report has been carried out at Agder University College in Grimstad. I would like to thank my supervisor, Qing Hu for inspiration on the subject and valuable guidance. I would also like to thank Oscar Johansen at Seagull for his valuable comments during my work. Grimstad, May 2003 Knut Håkon Mikalsen iii Balanced Scorecard as a strategic management tool: The case of Seagull AS Table of contents Abstract .................................................................................................................... ii Preface .....................................................................................................................iii Table of contents..................................................................................................... iv Table of Figures ...................................................................................................... vi 1 Introduction ..................................................................................................... 1 1.1 The purpose of the thesis........................................................................... 1 1.2 Thesis definition (research questions)....................................................... 1 1.3 Objectives.................................................................................................. 2 1.4 Method....................................................................................................... 2 1.5 Theory ....................................................................................................... 2 1.6 Main Results.............................................................................................. 3 1.7 Overall arrangement of the report ............................................................. 3 2 Background...................................................................................................... 4 2.1 Company Background............................................................................... 4 2.2 Issues and Problems Identified.................................................................. 5 2.2.1 Support problems .............................................................................. 6 2.2.2 Service problems ............................................................................... 6 3 Theoretical Foundations ................................................................................. 7 3.1 Introduction ............................................................................................... 7 3.2 Porters theories on competitive strategy.................................................... 7 3.3 The Balanced Scorecard.......................................................................... 10 4 Method............................................................................................................ 13 4.1 Introduction ............................................................................................. 13 4.2 Step 1 Collect historical and operational data ......................................... 14 4.3 Step 2 Develop the Balanced Scorecard.................................................. 14 4.3.1 Stage 1............................................................................................. 15 4.3.2 Stage 2............................................................................................. 16 4.3.3 Stage 3............................................................................................. 16 4.4 Step 3 Analyse and suggest possible improvements ............................... 16 4.5 Step 4 Implementation plan..................................................................... 16 5 Business Processes at Seagull AS ................................................................. 17 5.1 Introduction ............................................................................................. 17 5.2 Main Product offering ............................................................................. 17 5.2.1 Onboard Library (OBL) .................................................................. 17 5.2.2 Seagull Administrator...................................................................... 17 5.2.3 Competence Evaluation System (CES)........................................... 18 5.2.4 Classroom courses........................................................................... 18 5.3 Organizational structure and major business processes .......................... 18 5.4 Work processes in the operations department......................................... 19 5.4.1 Sale .................................................................................................. 20 iv Balanced Scorecard as a strategic management tool: The case of Seagull AS 5.4.2 Delivery ........................................................................................... 22 5.4.3 The booking process........................................................................ 25 5.4.4 Support ............................................................................................ 26 5.4.5 Administration of training data ....................................................... 27 5.5 Practical Issues ........................................................................................ 30 5.6 Discussion ............................................................................................... 30 6 Corporate strategy and vision ...................................................................... 33 6.1 Introduction ............................................................................................. 33 6.2 Development of the corporate strategy and vision.................................. 33 6.3 Results ..................................................................................................... 36 6.4 Discussion ............................................................................................... 37 7 Balanced Scorecard....................................................................................... 39 7.1 Introduction ............................................................................................. 39 7.2 Corporate Balanced Scorecard ................................................................ 39 7.3 Technology Balanced Scorecard ............................................................. 42 7.4 Department Balanced Scorecard ............................................................. 45 7.5 Overview ................................................................................................. 48 7.6 Discussion ............................................................................................... 49 8 Discussion....................................................................................................... 51 9 Conclusion...................................................................................................... 52 10 References .................................................................................................. 53 Websites .......................................................................................................... 53 Books..............................................................................................................
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