Medcomp (Balanced Scorecard)

Dear Tutor, is my answer correct. How much marks approximately i can get for this question?

Financial CSF: Positive cash flow

KPI: % change in Operating cash flow (OCF)

Performance analysis:

x6-x7: OCF increased by 22%. This shows a good performance. We can see that the number of treatment performed had increase by 8.7% and cost increase slightly less (8.39%). This suggest that there was a better cost control. Maybe there was more volunteer in x7.

x7-x8: OCF fall by 136%. Which shows is a bad sign. This maybe due to the drastic increase in the number of treatment performed, which led to an increase of (11.6%) in operating cost. Maybe in x8 there was less volunteer and more staff needed to get hired and also maybe the new procedures are more expensive than the previous one.

Customer CSF: Medical effectiveness

KPI: successful treatment as a % of total treatment performed.

Performance analysis:

x6-x7: Slight decrease from 87% to 86%.  

x7-x8: Drastic decrease from 86% to 77%. Maybe the new procedures was not as efficient as the previous procedures. 

Internal business process CSF: Function efficiency

KPI: Average number of days taken to deliver drugs and equipment to treatment centres.

Performance analysis:

x6-x7: Performance was constant

x7-x8: Performance was constant

Innovation and learning CSF: Innovation

KPI: New procedures as a % of total procedures

Performance analysis:

x6-x7: 5% in x6 and 5% in x7. This indicates that Medcomp was innovating but at a constant rate each year. 

x7-x8: There was a drastic increase. Maybe there was more volunteer and since they were newly qualified they may have introduce more modern approach of proceeding. However since there was less successful treatment this might indicate the new procedures were less effective in treating patients.

(b)

By assessing performance via 4 different perspectives it gives an organisation a more balance view of how well it is really doing as it also include lead indicators. Financial terms is more like a short term measure (lag indicator), it shows how well a company is doing right now, which is a good measure but not a complete one. As good performance does not guaranteed that a business really has the ability to maintain that performance. 

Balance scorecard also help in achieving goal congruence. If a manager is being assessed solely on the financial aspects, this may create dysfunctional behaviour. For example, managers may decide to buy cheaper material to reduce cost. Which in the short term will decrease cost and increase profit. But in the long term, demand may fall drastically as a result of this decision.

And some organisation like Medcomp exist not to make profit but for purpose. While financial measure is essential to help the organisation to function properly. It is not the main determinants of success as compared to a profit making organisation.