Implementation Of Balance Scorecard In Portuguese Public Sector Municipal Waste Management
A balanced scorecard is a communication & strategy alignment tool that measures the financial and non-financial performance of the organisation. Balance Scorecard is designed to measure how the organisation is progressing towards the achievement of strategic goals & also helps planners to identify what should be done to truly execute their strategies.
Four Perspectives of BSC
- Learning & Growth perspective deals with some intangible aspects such as human capital and organizational information.
- Internal Business Processes perspective monitors and analyzes the operational dimension of the business to achieve a customer satisfaction with the ultimate goal of improving the financial performance of the organization.
- Customers perspective deals with the identification of the customer, their needs and market segments in - order to align the key measures for success in the form of satisfaction and market share
- Financial Perspective is concerned with financial tangible aspects and covers the budget, related costs and revenues from business operations.
Strategy Map
A strategy map is a figure that shows your organization's strategy on a single page. It’s useful for quickly communicating big-picture objectives to everyone in the company. It has five main components to consider the structural analysis of strategic map which are the strength of ties, orphan objective, focal point, then trigger point, and distinctive objectives.
Overview
This research assignment describes about the application and the outcomes of the balanced scorecard in Portuguese Public Sector Municipal Waste Management. The waste management system is one of the most complex and important public services which brings together social, environmental and economic aspects of society.
Motivations to implement Balance scorecard in this sector
The requirement to make balance scorecard was to create the value for citizens with a specific focus on improving performance in the public management of wastes. To create and maintain a sustainable framework, characterized by management operations was also one of the motivations to implement this strategy tool. There were a few more reasons behind applying balance scorecard such as:
- To meet the expectation of the public with an excellent service of waste collection and transport
- To create and maintain, an efficient & productive framework by the managerial operations.
- To ensure the financial integrity and sustainable development.
Implementation of Balanced Scorecard
The balanced scorecard was applied to the DHURS for the first time in 2003. DHURS used swot analysis in preliminary stages of strategic planning to implement BSC. The priorities outlined in the critical success factor were:
- To promote awareness campaigns and environmental education
- Planning and implementation of waste collection
- Collaboration with municipal companies
- Minimizing environmental impacts of waste.
The performance levels were set by percentage according to the targets. The internal process perspective contribution to the overall performance was 50%, achieving 34. 2% it shows an excellent performance level. For the client perspective, representing a 25% weighting, 12. 5% performance of this perspective was achieved. Client questionnaires were planned to meet clients’ expectations regarding waste services.
The success of balanced scorecard applied to DHURS (waste management division in South Portugal)
The results show that in 2009 the DHURS presented an overall performance of 52. 45% Out of the four BSC perspectives, the internal process perspective and the client perspective had higher achievement performances at 34. 2% and 12. 5% respectively. These results were due to the motivation of all stakeholders and reveal good internal teamwork. The main constraint cost for DHURS on which they focused on implementing BSC, the outcome was that they were able to reduce the waste deposition costs. In the internal process, they achieved the objective to increase the organic waste evaluating rate by 25% with the help of implanting balance scorecard. It was considered a good result as it was the first- time implementation of Balance scorecard in this sector.
Areas of Improvement
The overall objective of that research study was to evaluate its implementation in this sector. The learning and growth perspective show’s only 4% objective was achieved. The major problems reported were the lack of data, human resources, and performance measurement, which provided insufficient knowledge of the organisation to implement BSC. The financial perspective had 10% of the overall objective performance, achieved only 1. 75%. It concludes there is a requirement of cooperation involving all stakeholders. In recent decades, this sector has faced some common issues, such as centralized organizational structures, complex decision-making processes, increased competitiveness and budget constraints. The BSC can make a significant contribution to improvements in service quality in the waste sector by focusing on solving these constraints.
