Our paper emphasizes the way in which the information and communication technologies offer a real support to the managers which have a global vision on the key factors that assure business performances. The simulation of a Total Performance Scorecard reveals the advantages and opportunities of the software - Balanced Scorecard Designer in the determination of the project efficiency, based on four integrated dimensions: financial perspective, customers’ perspective, internal business perspective and organizational learning.Balanced Scorecard, performance control, strategy, organizational learning

Adriana OLARU

Alexandru CAPATINA

English

Research Papers in Economics

The Annals of “Dunarea de Jos” University of Galati  
Fascicle I – 2007. Economics and Applied Informatics. Years XIII - ISSN 1584-0409 
 
 
  85
 
 
The Impact of the New Information and 
Communication Technologies on the Performance 
Control Indicators System 
 
Adriana OLARU 
Alexandru CAPATINA 
“Dunarea de Jos” University of GALATI 
 
Abstract.  Our paper emphasizes the way in which the information and 
communication technologies offer a real support to the managers which have a 
global vision on the key factors that assure business performances. The simulation 
of a Total Performance Scorecard reveals the advantages and opportunities of the 
software - Balanced Scorecard Designer in the determination of the project 
efficiency, based on four integrated dimensions: financial perspective, customers’ 
perspective, internal business perspective and organizational learning.  
 
Keywords:  Balanced Scorecard, performance control, strategy, organizational 
learning 
 
 
1. Introduction 
 
General considerations concerning the design of a performance control system (Balanced 
Scorecard) 
The global economy enters in a new era, in which the new information and communication 
technologies accelerate the companies’ expansion in e-business, modifying the components of 
competitiveness and management performances. The strategic goals of the organizations like 
the business processes are influenced by significant changes, which determine the necessity to 
implement a performance control system. 
 
Performance control provides to the top-management information concerning the business 
vision and supports the strategic and tactic decision making process. The performance control 
function creates the framework for the planning, budgeting and monitoring the performance in 
all its departments. In the same time, it assures the adequate usage and the traceability of 
company’s resources, determining transparency in decisions and contributing in this way to the 
profitability increase. 
 
The Balanced Scorecard represents a set of indicators that assures a unitary presentation of 
the management vision regarding the performance control and supposes the relational approach 
on  four dimensions:  financial perspective, customers’ perspective, internal business 
processes  and organizational learning and growth perspective. In the design and the 
implementation of a performance control management system – especially when we take into 
account the information system – the aspects concerning the definition of goals and the setting 
of the results measurement become essentials. There aren’t methodologies generally accepted 
for the automation of a performance control project, but the practice of the companies reveals 
six stages (figure no. 1) 
 
 The Annals of “Dunarea de Jos” University of Galati  
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Figure 1. The stages concerning the performance control management approach 
 
In the following, we will present the main characteristics of each stage. 
 
1. The setting of the vision in view to implement the performance control 
A project focalized on the implementation of the performance control requires the top-
management support of the company that launches the initiative of a Balanced Scorecard. In 
this first stage, the managers investigate the way in which the company should develop its 
activities without a performance management system. 
 
2. The development of the performance control project based on Balanced Scorecard 
In this stage, the project manager has the responsibility to build the team which will participate 
to the project and to set the performance indicators that will be measured. The strategic 
management system must concentrate on the success key indicators. 
 
3. Project diagnosis   
On the basis of performance criteria, the project manager realizes a detailed analysis of the 
strategic aspects that will be processed in the information system. He will emphasize the 
aspects that cause low performance (inefficient workflows, high level of costs, the lack of the 
added value for customers due to an inefficient service or customer care etc). Performance 
indicators are created in order to set the targets and to measure the results in the critical factors 
of the strategy. Balanced Scorecard is a useful tool for the strategic planning and the 
implementation of performance control evaluation system. 
 
4. The design and the implementation of management performance control information 
system 
  Defined as a set of actions in which analysts, information system designers, users and 
beneficiaries are involved; the project concerning the implementation of the information 
system – support for performance control management needs an approach in a structured and 
formalized framework that describes the operations development and the role of specialists, 
making possible the participation of all the partners to the final objective setting, by means of a 
common language and rules for the Balanced Scorecard.   
 
5. The trial of control performance system functions 
The use of the information technology as a support which helps to the implementation of the 
methods and techniques referring to global performance evaluation by Balanced Scorecard is 
one of the steps focalized on the performance control reengineering. Depending on the change 
situation, the existent system can be just modified or replaced. 
 
1. Setting the vision in view to implement the performance control 
2. The development of the performance control project  based on 
Balanced Scorecard 
3. Project diagnosis 
4. The design and the implementation of management performance 
control information system 
 
5. The trial of  control performance system functions 
6. The system evaluation The Annals of “Dunarea de Jos” University of Galati  
Fascicle I – 2007. Economics and Applied Informatics. Years XIII - ISSN 1584-0409 
 
 
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6. The system evaluation 
The processes identified and implemented must be updated in view to evaluate the global 
performance. This approach supposes an iterative process, in which the new processes are used 
like entry data for the next stage of the performance control system. 
    
 
2. The simulation of performance control system with Balanced Scorecard Designer 
software 
 
Balanced Scorecard Designer is software realized by AKS LABS that simplifies the processes 
referring to the creation and the management of the Balanced Scorecard. It provides reports 
characterized by a set of measures linked to the organizational performance. The managers can 
be informed quickly when the business performance doesn’t correspond to their expectations.  
  
The selection of performance control indicators focuses on a set of “strategic objectives” 
associated to a “strategy map”. The managers should identify the goals they have in each 
perspective of the Balanced Scorecard and must prove the relationships by means of the 
network links discovery.  Arriving to a consensus in what concerns the goals and the inter-
relationships, the Balanced Scorecard measures are conceived by the selection of the 
appropriate indicators. In view to emphasize the performance control automation techniques, 
we built a Balanced Scorecard that will allow the determination of a sales project performance. 
  
The indicators system used for the simulation of the Balanced Scorecard is represented in 
figure no. 2. 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Figure 2.  Indicators system for the balanced Scorecard simulation in the case of a sales improvement 
project 
 
The users of this software dispose of capabilities concerning the creation of indicators system 
for performance control, the definition of a decision tree which implies relationships between 
the dimensions of the Balanced Scorecard. It also provides a flexible support for the The Annals of “Dunarea de Jos” University of Galati  
Fascicle I – 2007. Economics and Applied Informatics. Years XIII - ISSN 1584-0409 
 
 
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measurement of performance control indicators, based on certain target values settled by the 
decider.   
 
The software allows the creation of a set of key indicators that can be distributed in several 
categories; each category and each goal defined by the decider receives weights, in function of 
their importance. For each indicator the decider settles a minimum and maximum value in 
order to help the optimization strategy to determine the calculation of the indicators associated 
to the performance control. 
 
Because the sum of the Balanced Scorecard dimensions weights must be equal to 10, we 
suppose that the company’s manager which implements the performance management system 
allocates the value 3 to the dimensions: financial results and customers’ perspective (these 
perspectives are considered to be the most important in the manager’s vision and have the 
greatest impact on the performances) and value 2 to the other two dimensions: internal 
business processes and organizational learning. 
 
The decider must introduce for each indicator the real value, that will be quantified in the 
Balanced Scorecard, based on an optimization function which requires a lag between a 
minimal and maximal values. The optimization lags and the real value for the indicators 
associated to the Financial results dimension are presented in the table no. 1  
 
Table 1. Indicators associated to the Financial results dimension 
 
Indicators Real  value  Minimal 
value 
Maximal 
value  Weight 
Return on Investment from sales force 
development (%)  165  110 180  3 
Turnover resulted on the business 
development (mil. EUR)  435  320 500  2 
Operational profit rate (%)  17  10 20  3 
Commercial profitability rate (%)  38  20 50  2 
 
The sum of the weights allocated to each dimension indicators from the decision tree which 
reflects the Balanced Scorecard must be equal to 10. The minimal respectively the maximal 
values are planned by the manager before the implementation of the project.  
 
The optimization function implemented in Balanced Scorecard Designer emphasizes the 
manner in which each indicator contributes to the global performance of the project and 
depends on the goal pursued in each situation.  In the case of maximization goal, the 
optimization function supposes the following formula: 
 
Maximize RP = MP*Score/Max 
 
RP – real performance; MP – current value of the indicator had in view 
In the case of minimization goal, the optimization function supposes the following formula: 
 
Minimize RP = MP*Score/Min 
 
The application of the optimization functions referring to performance control management 
associated to Financial results leads to a performance of 69,35%. (figure no.3) The Annals of “Dunarea de Jos” University of Galati  
Fascicle I – 2007. Economics and Applied Informatics. Years XIII - ISSN 1584-0409 
 
 
  89
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Figure 3. Determining the performance level of the Balanced Scorecard Financial results dimension 
 
The optimization lags and the real value for the indicators associated to the Customers 
perspective dimension are presented in the table no. 2  
 
Table 2. Indicators associated to the Customers perspective dimension 
 
Indicators Real  value  Minimal 
value 
Maximal 
value  Weight 
Customer acquisition rate (%)  69  30 80  3 
Customer loyalty rate (%)  85  55 90  2 
Number of complaints/1.000 sales  3  0 10  2 
Customer satisfaction degree (%)  91  70 100  3 
 
We emphasize the fact that the indicator “Number of complaints/1.000 sales” supposes the 
application of the minimal target for the optimization function, and the decider concentrates 
the performance control strategy on customer acquisition rate and customer satisfaction degree. 
The application of the optimization functions referring to performance control management 
associated to Customers perspective leads to a performance of 75,54% (figure no.4) 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Figure 4. Determining the performance level of the Balanced Scorecard Customers perspective dimension The Annals of “Dunarea de Jos” University of Galati  
Fascicle I – 2007. Economics and Applied Informatics. Years XIII - ISSN 1584-0409 
 
 
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The optimization lags and the real value for the indicators associated to the Internal business 
processes dimension are presented in the table no. 3  
 
Table 3. Indicators associated to the Internal business processes dimension 
 
Indicators Real  value  Minimal 
value 
Maximal 
value  Weight 
Number of new products launched in 
distribution channels  6  2 7  4 
On time delivery rate  97  90 100  3 
Products covering rate on the distribution 
network  95  80 100  3 
 
The internal business processes must lead to the project budget update and to the assurance of 
the periodical performance control, in order to learn how the strategy can be improved.  
 
The application of the optimization functions referring to performance control management 
associated to Customers perspective leads to a performance of 75,5% (figure no.5) 
 
The optimization lags and the real value for the indicators associated to the Organizational 
learning dimension are presented in the table no. 4  
 
Table 4. Indicators associated to the Organizational learning dimension 
 
Indicators Real  value  Minimal 
value 
Maximal 
value  Weight 
Employees’ competences and abilities 
development degree  5  1 7  3 
Key positions covering degree on Sales 
Department  5  1 7  4 
Sales force motivation degree  6  1 7  3 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
    
 
 
 
 
 
 
 
 
Figure 5. Determining the performance level of the Balanced Scorecard Internal business processes 
dimension 
 
The appreciation scale of these three indicators associated to the Organizational learning 
dimension is the following: 1 – very low …7 – very high; the decider gives the almost same 
importance to these indicators, resulting a performance of 71,67%. (figure 6) 
 The Annals of “Dunarea de Jos” University of Galati  
Fascicle I – 2007. Economics and Applied Informatics. Years XIII - ISSN 1584-0409 
 
 
  91
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Figure 6. Determining the performance level of the Balanced Scorecard Organizational learning 
dimension 
 
 
The global performance of the project is calculated as a weighted average of the performance 
indicators associated to each perspective of the Balanced Scorecard. 
 
Perf
. glob = 
10
2 * 67 , 71 2 * 50 , 75 3 * 54 , 75 3 * 35 , 69 + + +
 
 
Perf
. glob = 73,01% 
  
The value of the global performance proves a remarkable success rate of this project, because a 
satisfactory success rate for a project is between 50% and 70%, and the values that exceed this 
target signify an important success of the project. 
 
Conclusions 
 
The managers that use the Balanced Scorecard don’t plan their strategies just only on financial 
indicators in view to evaluate the companies’ performances. The Balanced Scorecard allows a 
real support for business, using four processes, which correlate long term goals to short term 
actions. These processes are: the vision translation, communication and relationships, business 
planning, feedback and learning. 
 
  The vision translation is the process that helps the managers to achieve the agreement in 
an organization in what concerns the strategy. The vision must be expressed in an 
integrated set of goals and measures, accepted by the executive managers. 
  Communication and relationships allow the managers to communicate the strategy on all 
stages of the organizational pyramid and link it to the individual and departmental goals. 
  Business planning involves the opportunity to integrate financial and business plans. 
Almost all companies implement change programs in which the Balanced Scorecard allow 
the best allocation of resources to the tasks.  The Annals of “Dunarea de Jos” University of Galati  
Fascicle I – 2007. Economics and Applied Informatics. Years XIII - ISSN 1584-0409 
 
 
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  Feedback and learning offer to the companies the possibility of strategic learning. The 
existence of the feedback and the evaluation of the processes in which the company’s 
vision, its departments and the employees are focalized on the achievement of the 
performance control management system.  
 
 
References 
 
1.  Kaplan R.S. – „The Balanced Scorecard: Translating Strategy into Action”, John Wiley&Sons Edition, 
New York, 2002 
2.  Keyes J. – „Implementing the IT Balanced Scorecard: Aligning IT with Corporate Strategy”, Princeton, 
Hardcover Edition, 2005 
3.  Olaru A. – „Managementul schimbarii”, Ed. Europlus, Galati, 2004 
4.  Rampersad H. K. – „Total performance scorecard. Fundamente. Management consulting”, Ed. 
Didactica si Pedagogica, Bucuresti, 2004 
 
 

Implementing the IT Balanced Scorecard: Aligning IT with Corporate Strategy”, Princeton, Hardcover Edition,

Managementul schimbarii”,

The Balanced Scorecard: Translating Strategy into Action”,

Total performance scorecard.

The Impact of the New Information and Communication Technologies on the Performance Control Indicators System

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