Exam 13: The Balanced Scorecard and Business Value of Information Technology

Your company has elected to implement a balanced scorecard management process following the steps outlined by Kaplan and Norton.After examining the process closely,your company's senior management team (CEO,CFO,CIO,etc.)decides to modify the process to make the steps more specific.First of all,they identified three different organizational levels involved in the process: senior management,middle management,and the rest of the workforce. After a brainstorming session,they decide to break the five steps into pieces as follows: the formulate step would include a)assessing the company's value proposition relative to the competition,and b)determining the appropriate elements of the value proposition to emphasize in order to achieve competitive advantage.The translate step would include a)setting long-term strategic objectives for customer and shareholder value,and b)set priorities for long-term capital improvements necessary to achieve the long-term strategic objectives.The Link step would then include a)establishing necessary IT initiatives,b)setting departmental budgets,c)implementing new IT systems,and d)operating business processes.The monitor step would include a)produce reports to track performance,and b)review reports to evaluate performance. Then,they decided to insert a new step,titled Adjust.This step would include making adjustments necessary to improve business processes,basically revisiting the Link to Operations step but making minor changes.If the adjustments failed to achieve objectives,then they would continue to the Adapt step to a)reconsider their assumptions about the competitive environment,and b)reconsider alternatives for those parts of the value proposition to emphasize to achieve competitive success. Required: Draw a BPMN activity diagram that outlines your company's approach to the balanced scorecard management process.Then,describe in writing whether you agree with your senior management team's breakdown of the steps and the approach they propose.What would you do differently? Why?

Which of the following is not a value proposition characteristic expected to influence customer value?

When the firm's value proposition meets or exceeds customers' requirements,customer satisfaction results in customer retention and new customer acquisition,which drives sales growth.

The balanced scorecard management process starts with the Formulate step.

Function IT can be used without affecting more than one skilled worker.

Network IT changes the way that work if performed and decisions are made.

Which of the following is not a general type of business process found on generic strategy maps?

The success of Enterprise IT investments often depends on whether the company makes complementary changes in business processes.

Besides presenting financial performance information to shareholders,the financial perspective provides information that can confirm the success of investments in learning and growth.

The impact of an IT investment can depend on managers' decision-making abilities.

The balanced scorecard only includes quantitative measures.

Research shows that standardized,integrated,and networked technology enhances decision making and performance management.

Which of the following is not a step in the balanced scorecard management process?

Supply chain management systems are an example of Network IT.

Which of the following is the best reason that companies find it hard to assess the benefit of IT investments?

The balanced scorecard framework describes performance from four different perspectives based on the firm's strategy to achieve shareholder value.

Which of the following is not included in Information Capital as described in the balanced scorecard learning and growth perspective?

Which of the following is the best description of the Link to Operations step in the balanced scorecard management process?

In the business process perspective,the firm describes its objectives for improvements in tangible and intangible infrastructure.

Review the following list of company objectives.Prepare a strategy map that places each objective in the correct balanced scorecard perspective.