The Balanced Scorecard Approach
for Business to Business
Michael Ebert
Michael Haag
Beth Huston
Rod Kerezsi
Agenda
• B2B Overview
Mike Haag
• Mini-Case Studies
Company Overview, B2B Strategy, Balance Scorecard
unique elements
– Info Brokerage (Yahoo!)
Beth Huston
– Virtual Marketplace (Staples)
Mike Ebert
– Value Chain Integration (FED EX)
Rod Kerezsi
• Conclusions
Mike Haag
E-Enterprise Applications
E-Business: B2B
• Virtual Marketplace
• Procurement/Resource
Management
• Value Chain Integration
• Customer Relationship
Management
• Info Brokerage
E-Commerce:B2C
• E-Tailing/Customer Portals
– Amazon.com, CDNOW
• Bidding and Auctioning
– Priceline,eBay
• Consumer Care/Customer
Management
– Merrill Lynch
• Electronic Bill Payment
– AT&T, MCI Worldcom
Importance of B2B
•
B2B projections
– 630,000 companies with B2B services by 2002
– 90% of e-commerce by 2003
– 30% of the world economy by 2010
“Where does the Internet rank in Priority? It’s No. 1, 2, 3 ,4.”
Jack Welch, Chairman& CEO, General Electric
Virtual Marketplace
Application
• Selling Goods and Services to other businesses
Objectives
• Increase customer base
• Decrease marketing and product promotion costs
• Decrease inventory costs
• Improve customer buying experience
Examples
• CISCO Connection Online
• Staples
Procurement/Resource Management
Application
• Buying goods and services from other businesses
Objectives
• Manage long-term relationship with suppliers
• Lower requisitioning costs
• Reduce supplier costs
• Increase accountability and control
• Optimize purchases
• Shorter cycle times/reduced inventory
Examples
• Boeing
Value Chain Integration
Application
• Sharing enterprise information with suppliers and buyers to enable
more efficient real-time planning (supply, demand, and production)
and logistics
Objectives
• Improve cycle time
• Reduce inventory
• Lower operating expenses
• Supplier integration (especially small to medium suppliers)
Examples
• Car manufacturers - “Order to Delivery” Production Processes
• FedEx - Logistics processes
Customer Relationship Management
Application
• Improving Customer care - Pre-Sales, Post-Sales
Objectives
• Improve care through individual treatment
• Reduce costs through customer self-service
• Increase repeat buying through long-term customer relationships
Examples
• Hewlett Packard
Info Brokerage
Application
• Capitalize on Internet related business opportunities
Objectives
• Generate Market Growth
• Generate Market Share (Near-Term)
• Generate Net Income (Long-term)
Examples
• Internet advertising : Yahoo!, Excite, Lycos
Virtual Marketplace
• This is the web marketing of a company or
shop; an electronic version of the traditional
way of selling.
• Staples.com is the online arm of Staples Inc.
• Called a single cross-over or a “click-andmortar.”
• Serves the needs of its customers in the
office products market.
B2B Strategy
• To grab a substantial market share in the
small business and SOHO (small
office/home office) market.
• To provide a single online destination where
businesses can procure a wide array of
office products and business services,
access and exchange electronic commerce
transactions with each other.
Balanced Scorecard
CUSTOMER PERSPECTIVE
Goal
Measure
Unit
Continually improve
user friendliness.
Site logs
Tracks where customers go,
which pages are most popular,
how much time is spent and how
may users return
Increase services offered Such services How many new ones are
to small businesses and offered
established
vendors to enhance
customer experience
Build brand awareness
New of
Number of new customers
customer
acquisitions
Balanced Scorecard
FINANCIAL PERSPECTIVE
Goal
Measure
Unit
Strong financial
performance
Staples.com stock
Share price
Balanced Scorecard
INTERNAL BUSINESS PROCESSES
Goal
Measure
Expand Strategic
Alliances
Companies with whom
Number of new
strategic agreements are
agreements.
made
Growth of sales and revenue Dollars
compared to competition
Exploit advantages of
being established Brick
and Mortar
Expand Internationally
Sites in foreign countries
Unit
Number of new
countries reached
Build online brand
The proportional increase in Dollars
awareness through
revenue Staples Inc. that is
advertising in conjunction attributable to Staples.com
with Staples Inc.
Balanced Scorecard
LEARNING ORGANIZATION
Goal
Measure
Unit
Continue to
reevaluate the
customer wants and
needs
Completion of
effective surveys,
focus groups, and
in-house user
groups
Number of such
studies completed
Value Chain Integration
• a $19-billion global enterprise
• the world's largest express transportation company
• NA's 2nd-largest provider of ground small-package
delivery
• a global logistics and transportation management
company
• the world's largest surface expedited carrier
• a high-tech customs broker and trade facilitator
B2B Strategy
• Attract new business from small &
medium-sized customers
• Create new revenue streams
• Expand the high-margin international
business
• Capitalize on e-commerce
• Provide meaningful supply chain solutions
Balanced Scorecard
CUSTOMER PERSPECTIVE
Goal
Measure
Unit
Broaden Services
Services & Revenue
# Services & Dollars
On-Time Pick-up &
Delivery
Package Tracking
Accuracy
Web Page Simplicity
Lateness
# Times Late
System Down Time
Minutes
Order Time
Failed Attempts
Market Studies
Positive Publicity
Minutes/Seconds
# Failed Attempts
Customer Satisfaction Rating
# Awards
News Coverage Time
Market Studies
Customer Satisfaction Rating
Be Perceived as
Leader
Deliver Quality
Service Experience
Balanced Scorecard
FINANCIAL PERSPECTIVE
Goal
Measure
Unit
Increase Strategic
Partnerships
Return Customers
Partnerships &
Revenue
Return Customers
# Partnerships & Dollars
Increase Revenue
Revenue
Dollars
Increase Profit
Profit
Dollars
Lower Costs
Costs
Dollars
# Return Customers
Balanced Scorecard
INTERNAL BUSINESS PROCESS
Goal
Measure
Unit
Implement
Budget & Schedule
Dollars & Weeks
Technology
Improve Mgt & Distb Reduce Time & Cost Hours & Dollars
of Docs
Maximize the Internet Budget
# Hits
LEARNING ORGANIZATION
Goal
Measure
Unit
Establish CuttingEdge Technology
New Technology
# New Applications
Conclusions
• The internet revolution has presented businesses with unique
opportunities and threats
• B2B applications are becoming an increasing reality and need to be
effectively managed
• For most enterprises, B2B applications are just one facet of the
business strategy (Brick and mortar, B2C, B2G are others)
• A B2B measures should compliment other measures in a balanced
scorecard. Focus will depend on particular B2B application
• B2B measures will change over time
Balanced Scorecard in B2B Environment
Financial Perspective
Procurement/Resource Mgmt
Value Chain Integration
Virtual Marketplace
Customer Perspective
Customer Relationship Mgmt
Info Brokerage
Vision &
Strategy
Business Processes
Procurement/Resource Mgmt
Value Chain Integration
Organization Learning
Customer Relationship Mgmt
Info Brokerage
Virtual marketplace
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