Balanced Scorecard® inside small groups

Apparently Balanced Scorecard (BSC) seems to be success inside big enterprises (see 1000 Fortune enterprises every year) where some characteristics are putted together:
• Strong leadership;
• Collaborative Corporate governances;
• Strategic Plan quite well defined;
• Shared Mission and Objectives;
• Staff Motivation;
• Medium / High (information Technology (IT) involvement.

Problems arise when we start talking about Small and Medium Enterprises and worst when we talk about Micro Enterprises (SMME) and as well known, they perform 95% of all Portugal enterprises (same for Spain or almost average in Europe).

Our SMMEs characteristics as INE/UMIC (2004) reveal have investment difficulties especially in innovation development and IT management applications acquisitions. In this subject IT is used for Internet information access and there are very low investments in business activities. Primarily use is information searching and emailing. If we think about value chain activities we notice that they are in the secondary activities. Concentrated effort for Portuguese SMMEs is applied in these activities, the loosing the opportunity of acting strongly in primarily activities: selling; clients, suppliers and partner’s links and other core support services that IT can efficiently help to obtain. This pattern which nuclear centre is probably low financial providers to invest in adjustable IT and / or high deficiencies in management knowledge, tools and methodologies will turn these enterprises in low and weak competitiveness over value chain primarily activities and of course over their competitors.

The fact is essentially based on:
• Low capital to invest on IT;
• Lack of skilled people working in mainly activities when IT is present;
• Weak human resources skills dealing with new management practices.

Problems for Small, Medium and Micro Enterprises (SMMEs) seem to be:
• Low capital for ICT investments;
• Lack on skilled people in main activities domain and dealing with ICT;
• Lack on skilled people on present management methodologies.

This kind of evaluations is quite perceptible and with an easy diagnosis. In one side we have low investments and low ICT skills. In the other hand BSc tools must be readapted for small enterprises and typified for these enterprises. That is to say:
• Easy use
• Low cost
• Easy maintenance,
accomplished with suitable templates “ready to use” for typical SMMEs, that means: BSc typified for several activity sectors and easy to adapt for each enterprise.

Guidance information and methodology accomplished for subjects on Management, Evaluation and Communication namely:
• Global Performance
• Mission, Vision and Strategy
• KPI, Objectives, Initiatives
• Action Plans
• Diffusion

There is a big market in SMMEs for BSc implementation and use, but an easy use and a quick gain view are critical success factors to the adoption and implementation of this tool.

ICT adoption in almost cases will succeed if they are friendly and results are quite visible from the beginning. Although most important gains can only be seen in long time term, really quickly immediate gains must be shown in short time because without this advantages quite well perceptible at beginning inside organization may conduct all BSc plan adoption to be rejected and difficult to implement.

For potential BSc’s clients some pilot examples from typified enterprises should appear as succeed guarantee. In this way the guarantee is more perceptible and should help enterprises to go ahead on this BSc tool adoption decision.

There are some big suppliers in BSc software betting in SMMEs adaptation software. Of course low cost and easy use are facilitators. These suppliers involvement anticipate the view on potential future use of BSc in SMMEs.

It seems the key issue for BSc implementation and use on SMMEs will be done using “just ready to apply” models or templates instead of big enterprises well succeed examples which reality is quite far from SMMEs realty. Easy operation with ICT will be fine to capture client’s attention.
Another critical success factor will be partnership and alliances between three parts: Educational Institutions (Universities, High Schools and Training Schools); ICT suppliers (BSc software providers, Communication tools and other SW facilitators) and Enterprises representatives or associations.

Universities, High Schools and Training Schools are a privilege source to test and promote management tools for future users and clients like students or enterprises employees. SW suppliers enable use of BSc tools and other support tools. They can create pilot-projects, test environment, models and templates to improve sells. Enterprise representatives or associations can capture and show associates needs and promote better choices among diversity, facilitating also tests and standards for better suitable choice.

The BSc is an efficient tool or methodology for performance enterprise evaluation, to show how to create better added value for all stakeholders and at same time a way to rethink the enterprise, redesign strategies, define strategic objectives, KPIs for their business and share them with all organization. This can be one of the most contributions of the BSc concept.

I'll appreciate your comments :)

Sharing thoughts, information and knowledge

By Teresa Florentino, terflor@netcabo.pt, in collaboration with R. Guerra Santos

[Teresa Florentino is a PhD student in Sociedad de Información y del Conocimiento at the University of Salamanca-Madrid. Her project and thesis is to get value to SME and micro enterprises evaluating useful ICT, assessing relevant information and knowledge and modelling infrastructures supported by technologies. ]