Our first task was to identify BSC software products. This began with a list of software companies that had presented themselves as vendors. To this list we added the names of products of which we had heard, personally, and by conducting an Internet search. We did not intend that the search be exhaustive nor the list comprehensive. Clearly, software companies around the world see BSC as a significant business opportunity and as we worked on the subject we heard of more products entering the market. Armed with our list, we contacted ten or so parties and asked for information, copies of the software or demonstrations. Consequently we assembled a group of associates, all seasoned management professionals from a variety of industries, who "walked" through each of the products. During the review, observations were made and noted; later, as a group, we summarized our thoughts and developed a strategy for this article.

BSC software without the underlying logic is like a family home when the family is gone — empty, devoid of life. Inevitably, deploying strategy is at the heart of an effective BSC. BSC is about the logic of strategic imperatives, premised on the needs of stakeholders and customers linked by critical success factors (CSF) and critical business issues (CBI) through processes to people. These people perform activities on an ongoing basis and behave in a predefined and desired fashion. In brief, BSC is not about software but about influencing the behavior of people at all levels of the organization.

There is, however, a very important role for software. Software makes BSC work. It is the communications device that facilitates adaptation of the management philosophy by the people whose behavior is to be influenced. The question remains, however, about when to buy BSC software. A lot depends on management philosophy and strategy relative to perspectives (financial, customer, innovation and learning, and internal), on understanding processes and activities, on linking them all together, and finally on establishing measures and goals. Once the architecture is in place, managers must understand what data is required to maintain the software, in which other computer systems (or other places) the data can be found, and how the data will be obtained. Finally, before choosing software, management should understand how the data will be deployed around the organization, who should have access to what data, and what behavior is desired.

Once the requirements are known, we buyers should cast the net wide and look at as many software products as possible. It is also important to find out what underlying issues are at stake, because there are many variables that will point to issues that are critical to a long —term viable implementation of BSC.

People behave as they are measured. In order to maximize performance, therefore, there must be clear expectations (which are measured) and outcomes, as they occur, must be clearly articulated. Furthermore, all components of the organization must be working towards a common outcome in order to succeed. In the information age, paper-based measurement systems won’t satisfy the needs of fast-paced business operating in competitive markets. Paper-based measurement systems are too slow, cumbersome, labor-intensive and unreliable. It is the combination of software, computing, and communications that makes BSC implementation viable.

Increasingly, telecommunications and computing have displaced manual effort. E-mail and voice mail have increased the speed at which we function. Ultimately the world has been reduced from a diverse array of different cultures and languages to a global village.

Many organizations continue to function as a group of independent functions or departments, such as Marketing, Sales, Operations, and Finance. Skill (e.g. accounting or engineering) and language defines each function. Even as cultural boundaries diminish between countries and continents, organizations still operate as fiefdoms. BSC is designed to eliminate the boundaries and can only become a reality because the merging technologies - software, computing and telecommunications - present images, information, and communications in a consistent and meaningful way to every person within the organization. It is the medium that facilitates organizational change. This is the marriage of management philosophy with technology and the imperative to compete in global markets. BSC software vendors refer to the importance of enterprise-wide solutions coupled with deployment of a personal BSC for every individual in the organization. BSC software, therefore, must accomplish many objectives.

This means that data must be organized in a fashion that is consistent with the management philosophy. It also means that the way in which the data is presented on computer screens and other media to each person in the organization is appropriate to influence that person’s behavior.

Data presented, therefore, must depict strategies, perspectives (e.g. financial, customer, innovation), and linkage, (e.g. between CBI and CSF and processes, decomposed to activities). Another important aspect of linkage is to depict role responsibility relationships between activities and the people responsible for them, thereby facilitating the development of individual scorecards. Inherent in BSC, as with any good measurement or BI solution, is the need to depict lagging (outcomes) and leading (input and output) measures. In addition, it is necessary to recognize that measures possess differing periodicity, that is, some measures only vary in a meaningful way over a longer cycle (floor space assignment) than others (daily sales orders).

Presenting measures in BSC requires the ability to understand relationships between the various measurements. Measures should be both quantitative and qualitative. At the same time all measures should relate to strategies that yield improved financial performance. For example, a strategy to yield increased revenue at the same or increased margins may depend on improved cycle time and reduction in errors to zero, such as an "order to cash" process. This implies that software must have a method to graphically depict the relationship between measures. Linkage occurs hierarchically when decomposing strategy through processes to actions. Linkage logic is premised on the understanding of cause and effect and should be expected to link across perspectives as well as hierarchically. For example, leadership in the development of appealing athletic shoe design provided significant benefit to Nike revenues and market share, whereas the inverse happened to L.A. Gear, whose discounting of unpopular designs created significant brand damage and subsequent revenue decline.

Linkage logic should mimic the following structure:

1. Strategy linked CSF/CBJ, such as increased market share and revenue to customer satisfaction and new product introduction are linked to,

2. Financial measures in a perspective change, which are linked to,

3. Process measures (cycle time, quantity and quality), which are linked to,

4. Activities within the process that have to be performed differently, which are linked to,

5. Individual and department in order to develop individual scorecards.

In many instances links, whether hierarchical or perspective, may have an inelastic performance impact between associated measures. Managers, therefore, must include comments on cause and effect relationships, trends, and expectations. The inclusion of Gantt charts and milestone data may also be appropriate. For example, the guarantee of pizza delivery time requires a variety of processes to perform well. The relationship to revenue growth, however, may be quite subjective. On-time pizza delivery requires:

1. Orders received must be verified as coming from a valid customer.

2. Each order must be recorded properly and communicated to the kitchen.

3. The kitchen must have all necessary ingredients to produce the food.

4. The kitchen must have trained people and the right equipment in sufficient quantities to satisfy demand.

5. There must be a mechanism or process for actually delivering pizzas.

It does not necessarily follow, however, that all people should have access to all information. Role / Responsibility analysis can be used to decide who will have access to what information. Along with decisions of distribution of information goes concern for security. Both internal and external security are necessary to ensure people have access to information they need, including people outside the organization who may be granted access to marketing information or annual and financial reports or who may be denied access all together.

Data must be presented in a fashion that provides substantial insight to performance and should deal with both qualitative and quantitative data. Organizations expect software to provide numeric data on past, current, trend, budget, benchmark, and planned future performance along with text fields of commentary to explain planned management actions and any deviations from plan. In the event of a significant deviation or a situation that demands action, feedback on performance should be facilitated by the software. The system must allow people at all levels to annotate measures and respond to inquiries. A number of the products provide automatic links to E-mail, thus allowing comments to be added to the database as well as directly communicated back to people who have a specific and immediate concern.

Because of the linkage between measures and data elements, the software must be able to drill down from high level measures through the links to subordinate measures. Most BSC software products involve the construction of required data in some form of relational database coupled with the ability to do on-the-fly analysis. This is usually accomplished by the use of an on-line analytical processing (OLAP) capability. These tools are linked to a graphic user interface (GUI) which is what users see on their computer screen. The combination of technologies allows the software to deliver.

The technologies can provide managers access to additional information sources such as the general ledger and enterprise resource planning (ERP) application groups or other software applications such as activity based costing or simulation modeling, more commonly referred to as decision support tools (DSS). DSS may be featured within the context of BSC, so that when users wish to understand the cost implications of a potential decision, they can drill down through the BSC to obtain information through links.

Screens should be easy to navigate. All aspects of drill down, shifting to different perspectives, and preparing and reviewing comments should be straightforward.

Standard features such as point and click and setup wizards should be standard.

Wherever possible measures data should be updated automatically from existing operations databases / systems such as customer records and billing systems, generally using middle-ware products such as EDA/ SQL. Other links should exist to external sources such as stock market or news services.

BSC must be administered centrally. The complexity of the technology, coupled with the sophistication of the management philosophy, suggests that tight management of the overall process of measures management around BSC be highly disciplined. Annual schedules for updates, quarterly forecasts, monthly, and perhaps more frequent updates, require maintenance.

A number of software vendors offer BSC applications in association with products designed for reporting on other measurements. Each of the various software products has strengths and weaknesses with no single software package having the best of everything.

The purpose of any computer-based software acquisition is to obtain a potential set of capabilities that best suits the user’s needs and objectives, subject to various constraints (such as hardware and cost). It is generally more cost— effective to purchase a package rather than to create one. Besides the obvious cost factor, packages are usually quicker to implement with vendors offering a wide variety of ancillary services such as conversion assistance, implementation training, and system integration.

These packages also tend to represent the cumulative efforts of many individuals and organizations over a longer period of time, which results in a better, more useable package than most first-time attempts to create "home grown" capabilities. How does an organization choose from among the many packages on the market, each capable of being customized to varying degrees to meet an organization’s individual needs? One simply evaluates the needs of the organization against the various capabilities of the software offerings in order to identify any discrepancies or gaps prior to final selection. Although most software packages have varying degrees of flexibility, no one package is likely to filly satisfy all organizational needs. An organization, therefore, must be prepared to either undergo some organizational change to capitalize on the package’s capabilities, or to undertake additional time and expense to modify the package itself to meet these unique organizational needs, or to make a managerial decision to live with any mismatch between the selected package and these unmet organizational needs.

Although the model process seems simple enough, many firms have difficulty with packages after implementation. The reason generally boils down to the lack of understanding of the appropriate process or manner for selection and implementation of packaged software. In some instances, the selection process is seen as a technical decision with end-users (BSC design team) inadequately involved with the potential outcome. Just as the basic tenants of BSC require focused involvement, so does the software selection process. It is critical that the BSC design team addresses both the scorecard logic as well as the software to monitor the scorecard’s implementation.

The BSC design team develops the measure’s logic, and determines the human behavior requirements with the corresponding data modeling and information capture. This, in turn, drives the behavior as a principal part of the systems requirement definition. Software selection is a process, not only the discovery of computer capabilities, but also of the conceptualization and operationalizing of those organizational behaviors requiring continuous improvement. An appropriate process accomplishes both objectives by outlining appropriate roles and responsibilities for the discovery/selection process.

The package software selection process (PSSP) is divided into eight phases, each with a particular purpose and/or deliverable (see Exhibit 1: Package Software Selection Process). Each phase of the entire Package Software Selection Process (PSSP) provides management with better, more refined information concerning the project. As the requirements take more substance, moving from the fuzzy to the concrete, more reliable cost and benefit information may now also be developed. With each project phase, a deliverable is produced (usually in the form of a report) to go back to the BSC design team. The purpose of this report is to validate that the technology group "heard things" correctly and to secure continued funding (or funding support) from the BSC design team for assigning resources to the next phase. Thus, the BSC design team maintains project control both in terms of definition and through the funding processes.

In this phase, the BSC design team initiates the project by asking the technology area for a particular computer-based system capability. The BSC design team develops the measures logic, determines the desired human behaviors, articulates the data modeling strategy and provides these initial definitions plus any potential problem areas and concerns relative to an implementation. In this definitional phase, the technologist reviews the request to gain an understanding of what is being requested and determines the project resource requirements.

During this phase, the technology group provides any required technical constraints (such as consistent operating systems, data base compatibility) while the BSC design team provides any necessary business constraints (such as budget or organizational considerations). The BSC design team may need to provide information that often is contained within existing documents concerning the measurements desired and their appropriate calculation and data sources. The BSC design team is also responsible for quantifying the potential benefits and impact of the system on the organization for justification purposes. At this point, the technologist may have enough information to proceed with the project or, on the other hand, may determine that a more in-depth analysis (called a Systems Study - the next phase) is required. In either case, the technology person prepares a feasibility study that documents high level requirements (areas of measurement), potential data sources, "best guess" costs and benefits. This document is used when seeking management approval and funding to move the project forward.

If a systems study is required, the technology group further collects, synthesizes, and analyzes the strategists’ requirements. In this phase, the BSC design team is responsible for describing the problem and providing specific detailed requirements and desired outcomes. The BSC design team should also define the flexibilities required for potential future enhancement. It is important to remember that flexibility doesn’t just happen but must be designed into a potential solution set. The BSC design team is also responsible for addressing data availability issues and resolving any organizational questions incumbent in the solution set.

In the next phase, the technology representative packages the information developed from the analysis and creates a preliminary request for proposals (RFP), which defines the problem with any constraints. This document is then sent to potential vendors who might be able to offer solutions. In addition, the technologist prepares a search plan to locate potential vendors as candidates for the RFP as well as potential criteria for package selection. A list of known vendors may be found in Exhibit 3. The BSC design team is responsible for reviewing and approving both the RFP and the vendor search plan prior to finalizing and releasing.

In this phase individual responses from vendors are reviewed against the criteria. This is a joint effort between the BSC design team and the technology representative. Use of such criteria often helps narrow the field to a few finalist package candidates. For these packages, the BSC design team likely will want to review and verify vendor claims with current users of the system. Although most vendors will gladly provide testimonial names, limiting contact to only vendor supplied sites may not produce a complete picture of user satisfaction.

Most vendors hold annual user conferences where current users share ideas and work-a-rounds, and help the vendor prioritize future enhancements. A list of conference attendees provides a great source of non-vendor-solicited referrals. Additionally, a credit report or annual statement should be reviewed to determine the vendor’s economic viability. The review should pay particular attention to the availability of ongoing capital investment to keep the product current, such as new capabilities or compatible with new versions of the operating system. Since software is not a one-shot investment by the purchaser, initial implementation costs must be evaluated in addition to the costs associated with routine maintenance and upgrade support. Of course, Year 2000 compliance should be validated.

Often, as part of a final decision, the purchasing organization may request a proof of concept test with the vendor. More than a demo with the organization’s data, this test is an actual installation and extended testing with linkages to the actual data sources. This allows both the BSC design team and the technology groups to take a very close look at the product. This investigation requires a significant effort on the organization’s part since this effort includes both mapping the linkages and creating the programming to feed the organization’s data to the package. The larger the organizational commitment to the final product, however, the more critical a demonstration or proof of concept project.

From the technologist’s perspective, beyond reviewing the package, a complete implementation costing and capacity impact statement should be prepared. Any technology risks inherent in the package should be identified and explained fully. The technologist should make the recommendation for purchase of the package to the BSC design team, which makes the final decision through funding authorization.

8016 Vinecrest Avenue

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Tel: (502) 423-0882, Fax: (502) 423-0888

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Toronto, Ontario M5E 1C8, Canada

Tel: (416) 362-5099, Fax: (416) 362-0133.

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Tel: (212) 324-1410,  Fax: (212) 324-1417

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Edina, MN 55435, U.S.A

Tel: (612) 944-7777, Fax: (612) 944-7447

Email: sales@corvu.com

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Wakefield, MA 01880, U.S.A.

Tel: (781) 224 0750, Fax: (781) 224 4340

Email: info@gentia.com

Website: http://www.gentia.com/

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Tel: (305) 381-6361, Fax: (305) 579-9160

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Toronto, Ontario M6K 3H5, Canada

Tel: (416) 537-0921, Fax: (416) 537-8298

E-mail: info@pbviews.com

Website: http://www.pbviews.com/

5925 Airport Road, Suite 600

Mississauga, Ontario L4W 1W1, Canada

Tel: (905) 678-1172

Email: info@sapling.com

Website: http://www.sapling.com/

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Tel: (202) 342-0532, Fax:(202) 342-3972

Toll Free: 1-888-565BIKE

Email: info@softbicycle.com

Website: http://www.softbicycle.com/

In the package installation phase, the implementation plan developed in the previous phase should be executed. The technologist is responsible for acquiring the package as well as any other capacity required to execute the package, such as hardware, software, or network. The package installation, data feeds and customization are performed by the technology group to the specifications determined during the system study phase.

The BSC design team works with the technologist on the package customization issues and provides a set of test cases and benchmarked results for acceptance-testing purposes. These items should be included in the implementation and test plan. Preparing and training the organization concerning the appropriate use of the capability, including the creation of any management or user guides, as well as final installation acceptance testing, are BSC design team responsibilities. Synchronizing the organization and the package is often overlooked. Implementation planning is very critical, however, and can affect the ultimate acceptance of the outcome by the end-user community.

The post-implementation review is an audit of capabilities to determine that all the functionality identified from the system study has been correctly deployed in the implementation. At this point, any errors or omissions are identified by the BSC design team and fixed by the technology group.

Maintenance and change provides for evaluation of new package upgrades or versions with respect to business measures and behaviors and technological needs. The balanced scorecard measures those items that make a business efficient and effective. Although the measures of efficiency are relatively constant, measures of effectiveness change with the market environment and the process of

updating the software to reflect these changes must be ongoing.

Exploiting information technology requires an organizational change. Organizational procedures and processes change as a result of or in conjunction with new information technology or systems. Jobs and tasks are altered. Developing and implementing applications and technology should, therefore, be managed in order to achieve the desired results without any undesirable organizational or behavioral consequences.

The LewinSchein Model of change contains three steps: unfreeze, move, and refreeze. The unfreezing step involves creating a felt need for change and creating a receptive environment to consider alternatives. Moving consists of providing the necessary information to assimilate and internalize a better way. Re-freezing involves creating a new reward structure to institutionalize the changed behaviors.

The software selection process may be viewed as a method of building commitment to finding a better way. It is this commitment and understanding of what the underlying data represents that will motivate individuals to use this new tool set in an appropriate manner. An inclusive package search project can be used as the catalyst for change and a vehicle for focusing the organization on the key issues - not the technology, but rather the information that the technology will deliver. After all, the purpose of the software is only to provide access to information that is organized, hierarchical, pertinent, and introspective, as well as prospective and multidimensional. It is the tool and not the decision itself.