Question

The XYZ Tax Return Firm prepares tax returns for individual, partnership, and corporate clients. It competes and plans to grow by preparing returns faster than other firms and to charge its clients lower fees than competitors charge. There are many other tax preparation firms in the industry capable of preparing tax returns for its target market. XYZ believes it needs to have satisfied employees who have earned their CPA or Enrolled Agent (EA) license are critical to its long-term success.

List, describe, and justify eight metrics (2 in each of the Balanced Scorecard perspectives) that you believe XYZ should include in its Balanced Scorecard.

Answer 1

Metrics that we believe XYZ should include in its Balanced Scorecard are as follows-

1.Operating expense

2.Project expense

3.Customer satisfaction ratings

4.Customer-driven volumes

5.Application development

6.Quality and availability of service

7.Product and service innovation

8.Continuous improvement

Scorecard Metrics for Financial Perspective

• Project expense: actual to budget, actual to forecast
• Operating expense: cost per transaction for major delivery channel

Scorecard Metrics for Customer Perspective

• Customer satisfaction ratings
• Customer-driven volumes: accounts, requests, complaints, transactions (online, at ATMs, to call centers, in branches)

Scorecard Metrics for Internal Perspective

• Application development: software design and delivery completion time
• Quality and availability of service: image archive availability, image capture rates, ad hoc image retrieval success percentages, network response times, host computer availability and any unscheduled outages, major application transaction volumes

Scorecard Metrics for Growth Perspective

• Product and service innovation: lead time to develop prototypes, time to deploy for commercial use, research and development initiatives under way
• Continuous improvement: Six Sigma process improvement projects under way, Six Sigma projects certified and quantified as successful

Justification-

metrics must be developed based on the priorities of the strategic plan, which provide information that managers care about most and can actually take action on. The goal of the balanced scorecard is to empower managers to see their company more clearly – from many perspectives – and thus make more effective long-term decisions.