Stay on top of operational metrics
Microsoft Office Business Scorecard Manager is an affordable, easy-to-use tool to monitor progress toward strategic goals. This article explores its benefits for midsize companies.
In Summary:
| • | Microsoft Office Business Scorecard Manager tracks performance in four vital areas: finance, operations, human resources, and sales and marketing. |
| • | Business Scorecard Manager integrates smoothly with familiar Microsoft Office applications for simple deployment and use. |
| • | It combines budget, forecast, analysis, and scorecard capabilities, and coordinates planning activities. |
Imagine that you are the chief financial officer of a midsize business. Your marketing manager complains that the sales team is understaffed and will miss its sales goals for the next quarter as a result. You want to know how to adjust the marketing budget to hire two more salespeople, but human resources has not told you whether it is conducting interviews or when it expects to choose candidates for a job offer. To move forward, you need to determine how all these factors affect the company's strategic plans, budgets, and revenue targets, and what needs to change to keep your performance in line with your goals.
 | For the first time, it's feasible for midsize companies to deploy scorecards that map business strategy to KPIs and see where they're on or off track. |  | | Michael Smith
Director of marketing,
Microsoft Office PerformancePoint Server | |
|
Many midsize companies would need weeks to find the relevant data in the enterprise resource planning (ERP) and other business applications, dump it into a spreadsheet, analyze it, and create a strategic plan to realign performance. Few small and midsize companies can afford to report on organizational performance with a business intelligence solution that costs several thousand dollars per user.
Microsoft Office Business Scorecard Manager, now part of the new Microsoft Office PerformancePoint Server 2007, offers a viable alternative. "For the first time, it's feasible for midsize companies to deploy scorecards that map business strategy to KPIs and see where they're on or off track," says Michael Smith, director of marketing for PerformancePoint Server.
A scorecard is essentially a collection of key performance indicators (KPIs) and graphs showing the relationship between them. Larger enterprises have used them since the early 1990s to track internal metrics from multiple perspectives and receive feedback that keeps corporate actions aligned with business strategy.
With Business Scorecard Manager, users set the parameters of the desired KPIs with commands and features like those they already use in Microsoft Office, such as drag-and-drop functionality and formatting palettes. The tool delivers the resulting scorecards as HTML documents that users can publish to the Web or a Microsoft Office SharePoint Server site.
Business Scorecard Manager turns business and financial data into graphical KPIs for a wide variety of metrics in four critical areas used in balanced scorecard methodology:
| • | Financial metrics such as revenues, margins, or cost of sale |
| • | Operational metrics such as online shipment rates or on-time deliveries |
| • | Human resources metrics such as employee turnover or salary ranges per employee |
| • | Marketing metrics such as the number of new customers or total sales per product |
Metrics that meet or exceed preset goals appear as a green traffic light. Those that fall below the target show up as yellow or red lights.
Business Scorecard Manager is preconfigured to pull data from Microsoft Dynamics applications into a Microsoft SQL Server database, which makes deployment fast and simple, Smith says. (It can also integrate with other ERP solutions, although that requires in-house customization.) Microsoft has set the license fee at just US$200 per user to further limit the total cost of ownership, Smith adds, explaining, "If you believe scorecarding is strategic, you need to use it broadly."
Operational intelligence at a glance
With Business Scorecard Manager, the CFO with an understaffed sales department could generate a scorecard of KPIs that indicate the shortfall between the sales team's revenue targets and actual sales and link it to the need for two additional salespeople. He could then send the scorecard to the hiring manager with additional KPIs that emphasize how quickly the company needs to hire those two employees before the lost revenue begins to affect annual goals and budgets. Scorecards link to reports, also generated in HTML by Business Scorecard Manager, that detail the data used to generate the KPIs, for a deeper analysis.
In addition, Business Scorecard Manager allows individuals to create their own KPIs. For example, shipping clerks can see whether they met a departmental goal of 50 packages a day. Call center employees can monitor the length and resolution of their calls in real time and spot areas for improvement. Salespeople can track the number and value of closed deals over time or as compared to their co-workers. In midsize companies, where one person's success or failure can have a disproportionate impact on the organization as a whole, the ability to present performance data in a way anyone can understand can make a strategic difference, Smith says.
The ability to look at current trends, project them into the future, and measure them against plans typically requires three different pieces of software, Smith points out. With Business Scorecard Manager, however, a company can create a set of KPIs that track performance against business plans in real time, spot a red KPI indicating where performance is low, and click on that KPI for the details. "This accelerates the pace at which information moves in and out, so you don't have to wait for a month to find out how you're doing," he explains.
Microsoft Office PerformancePoint Server 2007, which includes Business Scorecard Manager 2.0, is currently available for download in beta form. It will be generally available for purchase in late 2007.
 | Fawn Fitter is a freelance writer in San Francisco who specializes in business and technology. She contributes regularly to the Microsoft Midsize Business Center. |
