BSC: Customer Perspective

The Customer Perspective in a Balanced Scorecard (BSC) is all about understanding how well a company is meeting the needs of its customers. It’s essentially looking at your business through the eyes of your customers. By effectively using this perspective, a company can identify areas for improvement and track progress towards its customer-centric goals.

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By effectively using this perspective, a company can identify areas for improvement and track progress towards its customer-centric goals.

Here are some key things to know about the customer perspective in a balanced scorecard:

• Focus on Value and Satisfaction: The core idea is to assess how much value the company’s products or services provide to customers, and how satisfied they are overall.
• Customer Metrics: Specific metrics are used to measure customer satisfaction, loyalty, and perception of value. These can include customer satisfaction surveys, net promoter score (NPS), customer retention rates, and complaint resolution times.
• Strategic Objectives: These objectives translate what’s important to customers into actionable goals. Examples include increasing customer acquisition, reducing customer churn, or improving product quality based on customer feedback.

By understanding customer needs and tracking relevant metrics, companies can use the customer perspective of the balanced scorecard to:

• Improve customer relationships: By focusing on satisfaction and loyalty, companies can build stronger bonds with their customers.
• Develop better products and services: Understanding customer needs and feedback directly informs product development and service improvement initiatives.
• Boost profitability: Satisfied customers are more likely to be repeat customers and recommend the company to others, which can lead to increased sales and profitability.

Overall, the customer perspective in a balanced scorecard is a crucial tool for any company that wants to achieve long-term success. It ensures that the company is focused on delivering value to its customers, which is essential for sustainable growth.

Earned Value Management (EVM) is a project management technique that integrates scope, time, and cost parameters to assess project performance and progress. Here’s how EVM can help ensure the completion of the project in cost, quality, and time:

1. Scope: EVM helps in tracking the work performed against the planned work, ensuring that all project deliverables are on track. This helps in maintaining the project scope and avoiding scope creep.
2. Time: By comparing the planned schedule with the actual progress, EVM provides insights into whether the project is on schedule. Metrics like Schedule Performance Index (SPI) help in understanding if the project is ahead or behind schedule.
3. Cost: EVM tracks the actual cost versus the budgeted cost for work performed. Metrics like Cost Performance Index (CPI) and Estimate at Completion (EAC) provide a clear picture of cost efficiency and forecast future cost performance.
4. Quality: While EVM primarily focuses on cost and schedule, maintaining earned value as planned indirectly supports quality. Adherence to planned work and efficient resource use ensures that quality standards are met without cutting corners.

Key EVM metrics:

• Planned Value (PV): The budgeted cost for the work scheduled to be completed by a specific time.
• Earned Value (EV): The budgeted cost for the work actually completed by a specific time.
• Actual Cost (AC): The actual cost incurred for the work completed by a specific time.

Core EVM calculations:

• Cost Performance Index (CPI): 𝐶𝑃𝐼=𝐸𝑉/𝐴𝐶 ​
• Schedule Performance Index (SPI): 𝑆𝑃𝐼=𝐸𝑉/𝑃𝑉​
• Estimate at Completion (EAC): 𝐸𝐴𝐶=𝐵𝐴𝐶/𝐶𝑃𝐼​ where BAC is Budget at Completion.

By using EVM, ER can better realize the earned value as planned, ensuring that the project is completed within the allocated budget, on schedule, and meets the desired quality standards. This integrated approach provides a comprehensive view of project performance, enabling proactive management and decision-making to keep the project on track.

Next to the revenues secured, the volume is a key performance indicator (KPI) representing network utilization as well as operational readiness. Monitoring the volume KPI helps ensure that the network is being used efficiently and is capable of handling the expected traffic and operations.

Here’s how volume as a KPI plays a critical role:

1. Network Utilization: Volume measures the amount of data or the number of transactions processed over the network. High utilization rates indicate that the network is being effectively used, which can correlate with higher revenue generation and optimal resource use.
2. Operational Readiness: Volume also reflects the network’s capability to handle operational demands. A network that can manage high volumes without performance degradation demonstrates robustness and reliability, essential for maintaining service quality and customer satisfaction.

Importance of Volume KPI

• Capacity Planning: Tracking volume helps in capacity planning, ensuring that the network can accommodate current and future demand without bottlenecks.
• Performance Monitoring: By analyzing volume trends, potential issues like congestion or underutilization can be identified and addressed promptly.
• Resource Allocation: Understanding volume patterns aids in efficient allocation of network resources, optimizing performance and reducing operational costs.
• Customer Experience: High network utilization with maintained performance indicates that the network can support the customer base effectively, leading to higher satisfaction and retention rates.

Integrating Volume KPI with EVM

Integrating volume KPI with Earned Value Management (EVM) provides a more comprehensive view of project performance:

• Scope Alignment: Ensuring that the network capacity meets the planned scope of operations.
• Schedule Adherence: Monitoring if the network build-out and upgrades are keeping pace with the planned schedule to handle expected volumes.
• Cost Efficiency: Ensuring that investments in network infrastructure are yielding the expected utilization and operational benefits.

By closely monitoring the volume KPI alongside EVM metrics, ER can ensure that the network is not only being built to specifications but is also fully operational and ready to support the business goals. This holistic approach helps in achieving strategic objectives while maintaining cost, quality, and time constraints.

Satisfied stakeholders are crucial to guaranteeing a smooth construction phase and a successful start of operations. Their satisfaction ensures cooperation, minimizes conflicts, and fosters a supportive environment essential for the project’s success.

Importance of Stakeholder Satisfaction

1. Smooth Construction Phase:

• Cooperation and Support: Engaged stakeholders, including investors, local authorities, and community members, are more likely to support the project, facilitating smoother approvals, fewer delays, and better resource allocation.
• Conflict Minimization: Addressing stakeholder concerns proactively helps in reducing resistance and conflicts that can arise during construction. This leads to fewer disruptions and a more streamlined workflow.
• Resource Availability: Satisfied stakeholders are more likely to provide necessary resources, whether financial, human, or material, ensuring the project remains on track.

2. Successful Start of Operations:

• Operational Readiness: Engaged stakeholders, particularly those involved in operations, ensure that the transition from construction to operational phases is seamless. Their input and cooperation are vital in final testing, training, and process implementation.
• Customer and User Adoption: For projects involving public use or customer interaction, stakeholder satisfaction translates to better acceptance and adoption of the new facilities or services.
• Positive Reputation: Successfully managing stakeholder relationships enhances the project’s reputation, fostering trust and goodwill, which are crucial for future projects and ongoing operations.

Strategies to Ensure Stakeholder Satisfaction

1. Effective Communication:

• Regular Updates: Keep stakeholders informed about progress, challenges, and milestones through regular reports and meetings.
• Transparency: Be transparent about potential risks and issues, and involve stakeholders in problem-solving.

2. Active Engagement:

• Feedback Mechanisms: Establish channels for stakeholders to provide feedback and ensure their concerns are addressed promptly.
• Inclusive Decision-Making: Involve key stakeholders in decision-making processes to foster a sense of ownership and commitment.

3. Meeting Expectations:

• Delivering Value: Ensure that the project delivers the promised benefits to stakeholders, whether they are financial returns, social benefits, or improved services.
• Quality Assurance: Maintain high standards of quality throughout the construction and operational phases to meet or exceed stakeholder expectations.

4. Conflict Resolution:

• Proactive Management: Identify potential sources of conflict early and address them through negotiation and compromise.
• Mediation: Use third-party mediators if necessary to resolve disputes and maintain positive relationships.

By prioritizing stakeholder satisfaction, ER can ensure not only the successful completion of the construction phase but also a smooth transition into operations, leading to long-term success and sustainability of the project.

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Oleh Dubetsky|Linkedin