Studying the performance measurement and management system for a software firm

Abstract

One of the hallmarks of leading-edge organizations be they public or private has been the successful application of performance measurement to gain insight into, and make judgments about, the organization and the effectiveness and efficiency of its programs, processes, and people. However, leading organizations do not stop at the gathering and analysis of performance data; rather, these organizations use performance measurement to drive improvements and successfully translate strategy into action. In other words, they use performance measurement for managing their organizations. With Rupee appreciating and the billing rates coming down the Indian Software Industry has been alarmed and is working hard to control its costs. So the companies want to track the performance as closely as possible. WIPRO Technologies (http:/www.wipro.com) has a presence of over two decades in the IT industry. Catering to over 300 global clients, it is amongst the largest software service organizations in India. WIPRO has not been spared by the downward trends in the industry after2001. It has taken quite a few measures for tracking its costs and to enhance the performance of the organization as a whole. As part of the drive WIPRO went in for comparative analysis of the Bus performance. It prepared a quarterly matrix showing performance of BUs on various parameters and called the matrix as Balanced Scorecard. This is far from what Balanced Scorecard is all about. The Balanced Score Card (BSC) is a management system that enables organizations to clarify their vision and strategy and translate them into action. When fully deployed, the BSC transform strategic planning from an academic exercise into the nerve canter of the organization. A prerequisite for implementing a BSC is a clear understanding of the organization's vision and strategy. The basis for the vision and the strategy should be the holistic view and the information, the management receives during systematic strategy work. The implementation of BSC should be organized as a separate management system development project. The project should be planned in the same details as any other project in the organization and standard project management procedures should be followed. The actual implementation of a BSC can be divided into following phases; many of these phases can be performed in parallel: Strategic Planning Exercise. Carving out the BSC. Implementation of BSC including digitization. Organizational Integration. Technical Integration. Refinement. The benefits from the BSC are realized when the BSC is used in day-to-day operations. Data update, analysis and reporting are performed regularly within the management and reporting processes. From time to time it is also necessary to refine the BSC. The BSC should be a standard tool used by the management team in their strategy. The criteria for refinement, selection/dropping of a measure are critical and should be done with the consensus of the stakeholders. Some of the measures that are Performance/output measures, have longer cycle times and are linked to long term plans of the organization and therefore it is important not to loose sight of the same. It is important to simplify the BSC with few measures that are critical to a role. The strategy map may be revisited at the discretion of the management.