2007 Aug 01
Applied PC Systems Strategy Map
by David M. Raab
DM News
August, tadalafil 2007

Among the many kinds of reporting systems, the grandest of all are “balanced scorecard” projects to measure compliance with business strategy. These have evolved over the years to combine strategy maps with balanced scorecards. Strategy maps define relationships among key business objectives, while scorecards that measure progress towards meeting those objectives.

The technology needed to build such systems is quite simple. Even extending the scorecards to show how specific projects and individuals support strategic goals isn’t very hard. As a result, there are dozens of products that support balanced scorecard projects. In practice, any decent reporting software can do the work.

What has this to do with you as a direct marketer? It’s true that few companies will ask the direct marketing department to pick the software for their enterprise balanced scorecard project. But the balanced scorecard approach is now so common that there’s a good chance somebody within marketing will propose a scorecard system for internal use, or to show how marketing has aligned itself with corporate objectives. That somebody might even be you. If this happens, you’ll need software to do the job.

Of course, you could build something using your existing reporting systems or, heaven forbid, Excel. But the costs of doing this and then running a cobbled-together solution make it a poor alternative to software designed for the task, if you can find something at a reasonable price.

Strategy Map (Applied PC Systems Pty Ltd., www.strategymap.com.au) offers a balanced scorecard system that’s free in its personal version (limited to one user and one small project) and costs under $500 for unlimited enterprise use. The company provides extensive documentation and free technical support. (Important note: Applied PC Systems is an Australian company, not related to the Chicago-based firm with Web address of www.strategymap.com.)

Clearly the price is right. But, more important, Strategy Map includes all the functionality you need for a balanced scorecard project.

Users begin by naming their plan and defining static components such as company name, vision, mission statement, and elements of a SWOT (strength, weaknesses, opportunities, threats) analysis. These are simple text fields, but can be linked to external documents or Web addresses.

The next step is to create the strategy map itself. This is done by placing boxes on a virtual canvas and linking them with arrows. In proper strategy map fashion, the boxes are aligned on rows that reflect different types of objectives (called “perspectives”). The software lets you call these anything, but the standard groups are financial, customer, internal processes and organizational capacity building. The lines indicate causal relationships, such as “reduced turnaround time [an internal process] leads to on-time flights [a customer goal]”.

Objectives created on the map are used in building the balanced scorecards themselves. This is the critical link between the two concepts. Strategy Map enforces a tight connection by storing the strategy map objectives in a list and then linking them to goals defined on scorecards for individual employees. These personal goals are themselves then linked with measures and scores. Each measure in turn can be associated with one or more activities (more often called “initiatives” in balanced scorecard-speak). Activities are where real work gets done: each has detailed attributes including date ranges and multiple budget lines. The next version of the software, due this fall, adds monthly buckets for planned and actual income and expense for each activity. It automatically uses these to calculate planned and actual profit.

Strategy Map’s bottom-up approach of assigning goals to individuals is a departure from usual balanced scorecard practice, which starts with enterprise-level goals and “cascades” them downwards through the organizational hierarchy. Assigning goals directly to individuals makes it easy to respond to any change in organization: goals automatically follow individuals when they are moved from one unit to another, or when the structure itself is reorganized (say, a branch office moved from one region to another). Strategy Map supports two levels of units within an organization and can aggregate individual goals and measures upward along the unit hierarchy. The system can also display scorecards for all employees within a particular organizational unit.

As with objectives, Strategy Map maintains lists of user-defined values for scorecard categories such as personal goals, measures, and scores. This ensures consistency across scorecards, lets users change value names without editing each scorecard individually, and enables drill-down and cross reference reports that show all instances of a particular value. Although the three categories of goals, measures and scores would be a typical, the 3.0 version of the system allows up to six categories. These are arranged hierarchically within the scorecard—so, for example, several scores could be assigned to one measure, and several measures assigned to one goal. There are no constraints on the values across categories, however, so any type of score could be assigned to any measure. It’s up to the user to ensure the assignments make sense.

The system can display the scorecard in tree, Gantt chart or table formats. This makes the relationships among category values easily visible, particularly in the table format, which automatically merges cells where appropriate. In addition to the six list-based categories, users can add fields for text notes, document references, and gauges. The system can export scorecards in Word, Excel, XML, HTML and several other formats.

This is a remarkably broad set of functions at a price that can’t be beat. Unfortunately, the user interface is somewhat idiosyncratic. Instead of the standard menu bars, icons and methods familiar to Windows users, Strategy Map employs alternatives that seem arbitrary and, in some cases, distinctly inferior. For example, instead of pop-up labels appearing when the mouse hovers over an icon, the system displays instructions in a box placed elsewhere on the screen—forcing a shift in focus. Still, the interface is usable once you get the hang of it, so this is a speed bump, not a barricade. Given the over-all value of the product, it’s worth the effort to learn a few quirks.

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David M. Raab is a Principal at Raab Associates Inc., a consultancy specializing in marketing technology and analytics. He can be reached at draab@raabassociates.com.

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