Nowadays, most companies already use more or less advanced enterprise information systems, and the mere fact of possessing them is no longer enough to build a market advantage. These systems allow for very good organization of current, basic operational processes, and also enable the collection and processing of large amounts of information. Thanks to this, it is easy to analyze past events based on the collected data. Unfortunately, basic analysis is definitely not enough for a company to develop well and strengthen its market position.
In current times, it is necessary to have specialized ERP systems that use modern strategic management methods, which, combined with BI solutions, will enable in-depth analysis, prediction of events that may occur in the future, and proactive planning of actions and processes. Only such company operations will allow for maximizing the use of favorable economic conditions, while minimizing negative factors that appear at the most unexpected moments. This is particularly important in the TSL industry, where conditions of fierce competition exist. Therefore, it is essential to practically apply modern strategic management methods, thanks to which it is possible to analyze not only the current situation and resources of the company but also its entire environment and to determine directions for development.
Traditional strategic management methods
Many classical methods are currently used in strategic management, the most important of which are: ADL Matrix, Hofer and Schendel Matrix, McKinsey Matrix, Boston Consulting Group (BCG) Method, Credit Commerciale de France (CCF) Method, SPACE Method, SWOT Method. In parallel, the following performance management methodologies are also used to determine company strategy: Economic Value Added (EVA), European Foundation for Quality Management (EFQM), Malcolm Baldrige National Quality Award (MBNQA), Management by Exception, Six Sigma, Total Quality Management (TQM), Value Based Management (VBM). These methods are included not only in computer systems but also in internal company workflow procedures. They thus allow for the introduction of a modern management model. They help make employees at every organizational level aware of their significant role in the daily work of the entire company. They also support management and executive staff in outlining correct goals and long-term company strategy, and facilitate decision-making based on reliable premises. Unfortunately, the practical use of the above-mentioned methods requires the application of analytical strategic management applications. These systems use a range of information collected continuously during the company’s operational activities, and then, based on this, enable forecasting, defining business strategies, planning actions, and examining their effects. Currently, only extensive IT systems possess tools or modules that, to a greater or lesser extent, enable strategic management. Due to high license costs, such systems are, however, available only to large companies in the TSL industry. Smaller systems, dedicated to small and medium-sized enterprises, unfortunately do not contain tools for strategic management. This means that these companies, in practice, do not have the ability to use modern strategic management methods. Therefore, the development of ICT systems is necessary, aiming at introducing and integrating tools for defining business strategies and examining the effects of their application within ERP systems.
Balanced Scorecard Method
One of the newest strategic management methods is the Balanced Scorecard (BSC) concept. The first book publication describing the BSC methodology by strategy creators Robert S. Kaplan and David P. Norton appeared relatively recently, in 1996. In a short time, this method gained worldwide fame and is currently undergoing extremely intensive development. Properly used, among other things in ERP-class systems, it brings measurable results to companies. The idea of the BSC boils down to translating the abstract vision of enterprise development into real, multi-level action strategies and measuring the effectiveness of their implementation using a series of metrics. A set of current and predictive metrics, established based on four perspectives (customers, finance, processes, and development), enables management –
in addition to insight into the current situation of the company –
to instantly realize whether development is heading in the designated direction. The customer perspective seeks sources of the current market position and examines the level of customer satisfaction. The finance perspective examines the state of the company’s overall finances. The process perspective determines the most effective actions. In turn, the development perspective examines the enterprise’s readiness to introduce innovative changes. Unlike traditional methods, which rely on the analysis of current and historical data, the BSC focuses primarily on achieving set goals in the future and enables the measurement of “intangible” events in the company in order to effectively plan its growth. Given the above, it is very important from the point of view of the BSC to properly develop a set of metrics tailored to the individual situation of the enterprise, collected in a so-called scorecard.
The article comes from the magazine “Logistyka” 2/2007.