Indian outsourcing cos. should use balanced scorecard:Kaplan

Mumbai, Sep 12 (UNI) The Harvard Business School (HBS) professor, Robert S Kaplan, has advised the Indian companies to move beyond the low-cost proposition which is also being provided by competitors from China and Taiwan.

''Indian companies have an opportunity to innovate, develop a relationship scorecard and offer a value proposition to their clients abroad'', he said addressing an interactive session with Indian corporates oganised by the Confederation of Indian Industry (CII) and Urban Forum, here yesterday.

Explaining the innovative and powerful time-driven Activity-Based Costing (ABC) approach and how it links with the balanced scorecard, Prof Kaplan revealed that while the balanced scorecard shows how you create value for customers and get them to buy, ABC reveals hidden costs and shows what it costs to create that value.

He pointed out that about 70 to 90 per cent of new strategies fail because the problem is in their execution. ''The people who execute the strategy and interact with customers are not the top level or middle level employees. The manufacturing industry shields low-end employees from the customers but in the service sector, it is the lowest enabled, least-trained employee who interfaces and talks to the customer. How do you modify their behaviour to support what you started out to accomplish, he asked.

Prof Kaplan advised Indian corporates to use a strategy map to identify and communicate initiatives that will meet strategic goals and a balance scorecard to measure them.

Prior to it, chairman of CII western region, Farhad Forbes, pointed out that to achieve global significance, Indian companies need to formulate strategies and also execute them successfully.

They need to maintain the pace of productivity and motivate employees and the balance scorecard enables them to devise methods to meet global challenges, he added.

Also, he announced the India scorecard initiative of CII and said that after gauging the response from Indian corporates to the concept, CII will be providing further sessions on aspects like design and consulting services with regards to balanced scorecard.

MD of Urban Forum, Mal Tennekoon emphasised that as globalization continues, Indian businesses need to recognise the challenges and they will need methodologies to keep track of their strategies and their implementation.

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