BALANCED SCORECARDLANCED SCORE CARD Introduction

"Vision Without Action Is Hallucination!" While all organizations aspire to achieve business excellence, not many of
them have a framework to institutionalize an approach for consistently driving actions towards their super-ordinate
objectives.

Words like "Become world class", "To be amongst the best in the world", "To achieve best-in-class quality" adorn the
walls of many an aspiring organizations, however, how many of them have really worked towards setting up an action
oriented framework to achieve these business objectives, is anybody's guess.

What we need is a framework to "Institutionalize Business Excellence". But before we deliberate this subject further,
let us spend a few moments on some key definitions:

Institutionalize: (also -ise) v. 1 establish as a convention in an organization or culture (Oxford Dictionary, 10th
Edition)

Business Excellence: A state of long-term sustained competitive success, which an organization aspires to achieve
by creating and balancing value for all its stakeholders - shareholder, customers, employees, suppliers and the
society at large.

Putting it together, the key challenge before us is:

"How to establish a convention, within our organizations, to create and balance stakeholder value, focused on
achieving long-term sustained competitive success?"

Let us be reminded that to "Establish a convention" also implies that the approach to drive business excellence must
blend with the organization's day to day operations and align to its business needs to be effective and result oriented.

As someone said, "If you always do, what you always did, you will always get what you always got!" Any organization
aspiring to "Become World-Class" has to evolve, which means that it has be capable of molding itself and doing
things differently / innovatively in consonance with changing business needs. Thus to "establish the convention" it
needs to focus on two very important aspects:

1. Ability to align the organization for breakthrough performance

2. Ability to strengthen systems / processes and assimilate evolution

To summarize these two aspects, consider this grid:

HighAbility To Align The Organization

Ineffective Due To Inability

Capable Of Achieving And
To Assimilate And Hold
Sustaining Business
The Gains Through
Excellence
Systems / Processes

Ineffective Due To Inability

To Focus On What Is
Important For
Breakthrough
Performance

Ability To strengthen systems / processes

Low High
Low

In the biological sense, the organization needs to musters its brain and brawn to achieve business excellence. To
explain the metaphor, the "brain" signifies the organization's acumen to strategize and capability to disseminate it
across the organization through the associated nervous system and "brawn" signifies the inherent strength of the
processes / systems to be able to support the implementation of strategies. It goes without saying that the brain and
the brawn go hand in hand. One cannot work without the other and none alone can sustain life!

When caught in a whirlwind, success lies in using its power to spiral and rise above the rest. But success also lies in
developing the ability to stay put at that elevated position. Otherwise gravity does come into play and two simple rules
govern the organization: 1. What goes up must come down! 2. The Higher you climb the harder you fall!
In the current and emerging whirlwinds of expanding economies and aggressive competition, we need to answer two
key questions:

1. How do we improve our ability to align the organization for breakthrough performance? "Rise with the whirlwind"

2. How do we improve our ability to strengthen our systems / processes to assimilate the evolution? "Stay at the top"

These are only possible if we can "establish a convention" in the organization, which focuses on both the above
issues.

How Do We Improve Our Ability To Align?

“Business Strategy is now the single most important issue… and will remain so for the next five years”
Business Week

In order to align its efforts, be effective and result oriented, companies adopt various mechanisms for strategic
planning and implementation, which elaborates upon the following steps:

1. Define the purpose and aspirations of the organization

2. Understand competitive and environmental factors

3. Define organization strategy / operating plans

4. Establish Annual goals / targets

5. Complete budget / resource allocation

6. Develop functional / departmental goals / targets

7. Assign individual KRA / budgets

8. Implement / manage daily performance

9. Review progress / performance

However evidence suggests that application of such a framework in the past has not yielded the desired results.
Interestingly it is not strategy formulation, which is under scrutiny, but strategy implementation that needs attention.
Worldwide research reveals astonishing facts that cut through the hype that surrounds the current frameworks of
strategy implementation.

“Less than 10% of strategies effectively formulated are effectively executed”

Fortune

The various current initiatives, such as KRA Programs, Annual Operating Plans (AOP), and Objective Setting
Exercises are found to be more of mathematical, number crunching efforts rather than frameworks to align, plan, act,
review and improve. The key factors contributing to the failure of strategy implementation have been isolated as:

1. Only 60% executives, 40% middle management and 5% line employees understand the vision and strategy of the organization

2. 69% of managers do not perceive any significant role of strategic planning process in overall success

3. 57% of managers cannot perceive a link between the long-range strategy and annual budgets

4. 85% of managers spend less than 15% of their time making strategic decisions / redirecting the organization

5. Only 34% executives, 15% middle management and 5% line employees have incentives linked to strategy

CFO Magazine Survey

It is not surprising that all the above factors pertain to the prime definition of "Institutionalization". Companies lack a
"convention" for implementing their strategies to create stakeholder value. Strategy implementation does not
permeate their day-to-day operations, nor does it align their efforts with their business needs!! Thus, while we may
perceive that we are implementing strategy to achieve competitive success and create stakeholder value, in reality,
we are only managing budgets and tactics to handle current operations.

Thus, it not only seems logical but pertinent that we urgently need a framework to manage strategy-driven
performance within our companies to be able to achieve business excellence.

What we need is an effective nervous system to connect our strategies with our actions and find consonance
between our brains and brawn. Let us discuss how these limitations can be overcome by implementing the "The
Balanced Scorecard".

IndiGo Airlines ITSDI Major Assignment Group 1

Balanced Scorecard: Translating Strategy Into Action Financial Perspective

Introduction "To Satisfy

Harvard Business School professor, Shareholders, What
Robert Kaplan, and management Financial Objectives Internal Process
Customer Perspective
Perspective
consultant, David Norton, conceived the Must We
Balanced Scorecard in 1991. First Accomplish?” "To Satisfy
"To Achieve
introduced in a 1992 Harvard Business Financial Objectives, Vision Customers And
Review article, it was followed up by What Customer & Shareholders, In
further seminal work in 1993 and 1996. Needs Must We Strategy Which Internal The
landmark book "The Serve?” Processes Must We
"To Achieve Our Excel?”
Balanced Scorecard: Goals, How Must
Translating Strategy into action" was Our Organization
published in 1996. Learn And
Innovate?”
The Balanced Scorecard is one of the most Learning & Growth important management
practices of the past 75 years. Perspective
Harvard Business Review

Initially adopted by a few selected organizations, the idea has spread very rapidly worldwide. In its
1999 executive survey of management practices, Bain & Company reported that 55% of surveyed companies in the
United States and 45% in Europe claimed to be using a Balanced Scorecard (BSC)

"By the year 2000, at least 40% of the Fortune 1000 will have implemented a Balanced Scorecard."
Gartner Group
What is The Balanced Scorecard?
The Balanced Scorecard is a multidimensional framework for describing, implementing, and managing strategy at all
levels of an enterprise by linking objectives, initiatives, and measures to an organization's strategy.

The scorecard provides an enterprise view of an organization's overall performance by integrating financial measures
with other key performance indicators around customer perspectives, internal business processes, and organizational
growth, learning, and innovation. The BSC is not a static list of measures, but a framework for implementing and
aligning complex programs of change and indeed, for managing strategy- focused organizations.

The Balanced Scorecard Perspectives

The conventional governance, management and performance review systems have focused only on the measures of
financial performance. The Balanced Scorecard approach begins with the premise that financial measures are not
sufficient to manage an organization. Financial measures tell the story of past events. They are not helpful to guide
the creation of future value through investments in customers, suppliers, employees, technology, or innovation.

The Balanced Scorecard complements measures of past performance (lagging indicators) with measures of the
drivers of future performance (leading indicators). The objectives and measures of the scorecard are derived from an
organization’s vision and strategy. These objectives and measures provide a view of an organization’s performance
from four perspectives.

1. "Financial Perspective" focuses on the strategy for growth, profitability, and risk viewed from the perspective of the shareholder.

2. "Customer Perspective" focuses on the strategy for creating value and differentiation from the customer viewpoint.

3. "Internal Perspective" focuses on the strategic priorities for various business processes, which create customer and shareholder
satisfaction.

4. "Learning and Growth Perspective" focuses on the strategic priorities to create a climate that supports organization change,
innovation, and growth.

Through the measures on The Balanced Scorecard, organizations can focus on how their business units create value
for current and future customers. They can also learn what investments in people, systems, and procedures are
necessary to improve future performance. While retaining an interest in financial performance, the Balanced
Scorecard clearly reveals the drivers of superior, long-term value and competitive performance.

A properly constructed Balanced Scorecard tells the story of the strategy of the organization.

Implementing The Balanced Scorecard to Drive Performance

In order to understand how a Balanced Scorecard drives strategic performance, let us walk through the broad steps
involved in constructing and implementing a Balanced Scorecard across an organization.
Build consensus around strategy
Senior leadership discusses mission, vision and strategy to arrive at a common understanding. They prepare a first draft of
strategic objectives.

1. Synthesize Strategic Objectives

Based on the common understanding of the mission, vision and strategy, a set of strategic objectives are synthesized under
each of the 4 perspectives: Financial, Customer, Internal & Learning

IndiGo Airlines ITSDI Major Assignment Group 1

 2. Prepare the Strategy Map
It is important to understand the cause-effect relationship between the various strategic objectives to effectively align and
implement the action plans across the organization. To facilitate this, a Strategy Map is constructed using the strategic
objectives in the four perspectives.

3. Select The Performance Measures

A set of measures is selected to manage performance against each of the strategic objectives. The selection of measures
should ensure that there are adequate outcome measures (Lagging Measures) and performance driver measures (Leading
Measures). Against each of the selected measures, targets, projections and comparative performance is tabulated to complete
the 4 scorecard perspectives.
Sr. Strategic Objectives Performance Measures 2K - 2K1 2K4 - 2K5 Comp.
A Financial Perspective
F1 To achieve profitable growth to  Return On Capital Employed X% Y% Z%
be amongst top 5 Global  PBIDT / Sales X% Y% Z%
companies  % Contribution of niche products X% Y% Z%
F2 Improve market share of niche  Market share (domestic) for niche X% Y% Z%
products for market leadership products X% Y% Z%
 Export as % of total sale
F3 To attain cost competitiveness at  % Sale which is not cost competitive XX% YY% ZZ%
world class levels  Operating Cost as % of contribution X% Y% Z%
B Customer Perspective
C1 Retain and Increase share of  % Sale to key customers X% Y% Z%
customer business  % Contribution from key customers X% Y% Z%
 Business share of key customers X Rs Y Rs Z Rs
C2 Acquire new customers through  Revenue growth from new offerings X Rs Y Rs Z Rs
improved customer value  % Contribution on sale of new X% Y% A%
offerings and customer reach offerings B% C% Z%
 Market share in new markets
C3 Improve customer satisfaction on  Overall Customer Satisfaction Index H% G% I%
identified critical attributes
C Business Process Perspective
B1 Enhance customer loyalty  Customer re-purchase intention U% I% K%
through improved customer  % Sale through e-Commerce H% L% M%
relationship management
B2 To review product mix and  % Sales volume with negative H% Nil G%
enhance product range contribution G Units K Units J Units
 Cumulative sales volume from new
products
B3 Improve cost effectiveness by  Wage bill as % of value addition K% N% L%
enhancing efficiency and  Cost Of Quality G Rs K Rs H Rs
optimize resource utilization  % Reduction In Overheads J% K% H%

D Learning & Growth Perspective

L1 Create a culture of high  % Officers rated as high performers J% K% L%
performance and team work  % Of employees in active teams N% K% J%
L2 Enhance strategic skills /  % Adherence to strategic training H% D% S%
competencies plan
L3 Enhance employee well-being,  Employee Satisfaction Index K% H% N%
motivation and satisfaction

4. Select Strategic Initiatives

In order to achieve the targets determined against the strategic objectives, the organization has to undertake a set of strategic
initiatives. For each of the strategic objectives and their corresponding measures, a set of initiatives is selected and an initiative
map is prepared, which highlights the relationship between the strategic objectives and the initiatives. These initiatives could be
of two types:

 Initiatives to improve the influence of the organization e.g. Enter new markets, Acquire companies etc.

 Initiatives to strengthen the systems / processes of the organization e.g. new product development process
Sr. Strategic Initiative F1 F2 F3 C1 C2 C3 C4 B1 B2 B3 B4 B5 L1 L2 L3 L4 Resp.

I1 Prepare and implement plans for KK

acquiring the competitor plant at New
Delhi
I2 Prepare and implement plans to rightsize PLJ
operations at Karnataka

I3 Deploy a structured new product GH

introduction process. Prioritize
development efforts.
I4 Prepare and implement plans to exit JKK
paper making by June 2000

I5 Deploy a "Customer Relationship KL

Management" system including web
based Customer Site
I6 Review and re-design the internal KK
processes which support customer /
market contact processes
I7 Design and implement a company wide OLP
cost reduction program

I8 Deploy a structured Performance FGH

Management System for all officers

I9 Develop a IT strategy in line with the JUH

company strategy till 2004-2005

5. Prepare An Implementation Plan

IndiGo Airlines ITSDI Major Assignment Group 1

 Based on the size and complexity of the organization, an implementation plan is prepared. The implementation plan details
factors pertaining to:
 Communicating / cascading the Balanced Scorecard
 Aligning Budgets to the Balanced Scorecard
 Implementing and reporting strategic measures regularly
 Providing feedback to drive strategic priorities
 Reviewing performance in the light of recent strategy

6. Cascade The Balanced Scorecard

Based on the organization level scorecard, division / SBU / functional level scorecard are drawn up. In these scorecards, the
strategic objectives are selected in support of the organization's scorecard. The measures, targets and the supporting
initiatives are broken down into action plans for implementation.

7. Align The Human Resource To The balanced Scorecard

Based on the Balanced Scorecard, individuals draw up their personal scorecards, which then integrate with their performance
management system. The scorecard can also be used to develop personal development plans as well as to design
compensation and incentive systems.

8. Set Up A Strategic Feedback And Review System

Improvements in organizational performance can only be achieved if performance is reviewed continuously using the balanced
scorecard. A review structured is designed using the Balanced Scorecard as the basic framework.

The Benefits Of Implementing The Balanced Scorecard

Thus to summarize, implementation of The Balanced Scorecard through the steps defined above, provides the
following benefits:

1. It facilitates communication across the entire organization and enhances the understanding of vision and strategy.

2. It ties the vision and strategy to the goals and objectives of the individuals and departments concerned.

3. It breaks down the strategic plan into objectives and initiatives that have a direct relevance to the day-to-day activities of
personnel.

4. It ensures that the right data is gathered and input is provided for effective measurement of objectives.

5. If an objective is not attained, it facilitates a clear understood why and helps identification of initiatives to achieve performance

6. It acts as an effective basis for resource allocation with focuses on both, managing current performance as well as long-term
value

Caution!
Simple as it may sound, it is important that we take care of certain important aspects while implementing the
balanced scorecard:

1. The Balanced Scorecard is not a set of key performance indicators (KPIs) as perceived to be important by leadership, it is a set
of carefully chosen measures which drive strategic performance

2. The Balanced Scorecard is not a set of measures representing all the stakeholders, it represents the relationship between the
various stakeholders in the light of current strategy

3. The Balanced Scorecard is not a KRA program. The objective of constructing a Balanced Scorecard is not to create a
framework of management control, but to enable strategic decision making

4. The Balanced Scorecard is not a one-time event but a continuum. You don't construct a balanced scorecard and let it R.I.P. To
be effective it has to become a part of daily decision making.

5. The Balanced Scorecard should not end up measuring what can be measured conveniently. It should measure what needs to
be measured to highlight aspects of performance important for decision-making.

6. The Balanced Scorecard needs to be systematically communicated across the organization to be effective. Care should be
taken to ensure that everyone understands the Balanced Scorecard and uses it to manage the business.

Conclusion
The Balanced Scorecard has the potential to construct that nervous system for us, which will connect our day-to-day
operations with our strategies and enable our organizations to achieve business excellence by managing strategy
driven performance.

While a structured and comprehensive strategic planning process is the first step towards institutionalizing business
excellence, the second step is the implementation of The Balanced Scorecard to translate strategy into action and
align the organization towards the same.

In the end, it is very important that we begin implementing structured frameworks to institutionalize business
excellence. We may not achieve perfection in the very first attempt. That is why we call it "The Journey To
Excellence" … and journeys don’t conclude in a single step. To summarize …

"Knowing about the knowing-doing gap is different from doing something about it. Understanding causes is helpful because such
understanding can guide action. But by itself, this knowing is insufficient - action must occur."

IndiGo Airlines ITSDI Major Assignment Group 1

 The Knowing - Doing Gap
Jeffrey Pfeffer and Robert I. Sutton

References:

1. Translating Strategy Into Action: The Balanced Scorecard

Robert S. Kaplan And David P. Norton
Harvard Business Press

2. Reengineering The Organization: A Step-By-Step Approach To Corporate Revitalization

Jeffrey N. Lowenthal
Tata McGraw Hill

3. SAP Strategic Enterprise Management: Translating Strategy into Action: The Balanced Scorecard
David Norton, The Balanced Scorecard Collaborative, Inc.
SEM Product Management, SAP AG

4. Handbook For Basic Process Improvement

Total Quality Leadership Office
Department Of Navy, USA

5. The Knowing - Doing Gap: How Smart Companies Turn Knowledge Into Action
Jeffrey Pfeffer And Robert I. Sutton
Harvard Business School Press

Websites:

 The Balanced Scorecard Collaborative

Bscol.com

 The Balanced Scorecard Technology Council

www.balancedscorecard.com

 The Balanced Scorecard Institute

Balancedscorecard.org

 The NIST Quality Program

www.quality.nist.gov

IndiGo Airlines ITSDI Major Assignment Group 1

 1 Technology Scorecard

The Technology score card is a measure of activities that take place across the business organization
including the functional and operational activities. Each department has its own goals and objectives
which are aligned towards the organization’s goals. The score card indicates the metrics that are
calculated keeping in mind the goals set by that particular function and the specific strategy put in
place to achieve those goals.

1.1 Business Goals

Indigo as an airline service provider has managed to gain immense popularity among customers and
has achieved a market share of 37%. The main goals of IndiGo are to provide low cost air services, no
add on services to customers and to live up to its motto of “On time every time”.
The Business goals of IndiGo can be classified as follows :

1. Increase sales and market share while offering low fares : Indigo has been known to provide its
services at the lowest fares to customers. It is the market leader when it comes to low cost air
service. It has been able to achieve this by following certain methods like pay for meal, services at
a fee, single aircraft design etc. which has helped it to minimize costs.

2. On-time service delivery, efficient operations and improved services: IndiGo has constantly put
up various endeavours to improve and excel on its operational front. Achieving efficiencies in its
operations has helped it leverage its services to customersIt has been able to achieve competitive
edge over its competitors by following various strategies like low turnaround time, low employee-
aircraft ratio etc. This has also helped it gain customer goodwill since services are delivered on
time and quality of service is very high.

3. On-time in all respects - customers to employees : Indigo has followed an extremely employee
friendly approach wherein it has made efforts not only to gain the goodwill of customers but also
to gain the favours of its employees who are a major stakeholder group in the organization.

1.2 Business Metrics

Business metrics are the measurable components which help to gauge the performance of the
organization on various parameters. The business metrics of IndiGo can be classifies into various
functions as either Financial or Operational or Market metrics:

Financial metrics: These metrics gauge the performance from a financial perspective and help in
making strategic formulations in the financial front. They evaluate the internal performance of the
organization. Financial metrics can be
 The Net Income
 The PAT
 The ROI

Operational metrics: These measure the operational efficiency of the organization and the flexibility
and scalability of its operations. Operational metrics can be

IndiGo Airlines ITSDI Major Assignment Group 1

  Cost reduction – by minimizing the turnaround time, optimal route utilization, optimal crew
scheduling, reducing idle times between flights.
 Increase Customer satisfaction - simple cancellation & refund policies, by faster check-in
procedures, hassle free ticketing procedures, on-time performance etc.

Marketing metrics: These metrics measure the performance in terms of the market share and the
market growth of the organization. It also tries to gauge in the popularity of the airline among its
customer base and target new markets. These metrics include
 Increase market share
 Offer low prices

1.3 Functional goals and functional metrics

Below we have the department scorecards for four of the departments based on the functional goals,
functional metrics and relative weights that have been allocated to each department and their
corresponding goals and KPIs as well.
The Four departments along with their corresponding weights are:
I. Operations (30%),
II. Sales & Marketing (25% )
III. Reservation and ticketing (25%)
IV. Human Resources (20%)

The functional goals of the chosen departments are shown in the chart below:

Department Operations Sales and Reservation Human Resources

(30%) marketing and (20%)
(25%) ticketing
(25%)
Optimization Enhance Check-in Generate Improve the process
of the cycle counter experience better sales of Recruitment and
time available and ensure better revenue hiring
for better efficiency during
efficiency check in
Functional
Goals Enhance the Streamlining the Capitalize and Better arrangements
experience for online ticketing increase the for training
the customer process market share programmes which
and increase in will enhance the
customer learning and help the
satisfaction employees to
familiarize themselves
with the new system
Bring Upgrading Customer Remodel and Improvement in the
optimization satisfaction at ensure better Compensation
with respect to different levels pricing structure
the usage of strategy
the aircrafts
Enhance the Enhance Performance
IndiGo Airlines ITSDI Major Assignment Group 1
 Operational Appraisal and
competence assessment method

1.4 Department score card

We have derived the scorecard for each of the four departments with the help of the business goals and
functional goals for the respective department. The following steps have been used:

 Each of the individual functional strategy for each of the department has been assigned a
particular weight
 Defining functional objectives for each of the functional strategy
 Assigning weights to the corresponding objectives to comprehend the general influence of that
particular objective on that functional goal along with determining the impact that it has on the
organization
 The functional goals or objectives are quantified by the KPIs. The metric for each KPI has also
been mentioned for the easier understanding of the quantification and measurement.

1.4.1 Operations Department scorecard

The Table below demonstrates the KPIs on the functional and operational levels in the Operations
department. For Indigo, Assumption: Operational KPIs same as the Functional KPIs.

Departmental Operational
Functional Weight Objective KPI Metrics Weight KPI Metrics
strategy
Optimization 0.075 On-time % (Calculate 0.02625 % deviation (Calculated
of the cycle arrival delay deviation d Time Of from the Time Of
time available (35%) from Arrival- assessed Arrival-
for better calculated Actual arrival time Actual Time
efficiency time of Time Of Of Arrival
(25%) arrival Arrival (CTA))/ATA
(CTA))/A
TA

Minimum % (calculated 0.0225 % deviation ( Target time

time spent deviation Time from target spent on
on ground from spent on time-on- Ground-
(30%) objective Ground- ground Actual time
set for Actual spent on
time-spent time spent Ground)/Act
-on- on ual time
ground Ground)/A spent on
ctual time ground
spent on
ground
Enhance the 0.06 Reduction in No of Number of 0.012 No of flights Number of
experience for number of flight flight cancellation flight

IndiGo Airlines ITSDI Major Assignment Group 1

the customer flight cancellatio cancellatio s made in a cancellation
and increase cancellation n made in ns that are week made
in customer (20%) a week made in a cancelled
satisfaction week versus the
( 20%) compared number of
to the flights slated
number of to be
flights that scheduled in
are slated a week
to be
scheduled
in a week
Reduction in % (previous 0.018 % (Last Year
the flight reduction year Reduction in avg fare-
fares (30%) in flight average flight fares Current year
fares flight fare- annually avg
annually present fare)/Last
year year fare
average
flight
fare)/Last
year flight
fare
Grievance No of No of 0.009 No of No of
recorded by grievance grievances grievances grievances
the made by made by made by the made by the
passengers the the passenger in passenger in
( 15%) passenger passenger a week a week
in a week in a week
Baggage No of No of 0.009 No of No of
misplacing baggage baggage baggage that baggage that
and that are that are are misplace are misplace
mishandling misplace misplace or or
and claims or or mishandled mishandled
( 15%) mishandle mishandle baggage in a baggage in a
d baggage d baggage week week
in a week in a week
Bring 0.0750 Increase in Rise in (Previous 0.0187 Increase (Last year's
optimization the the year’s 5 Available available
with respect available available available Seat miles seat miles -
to the usage Seat miles Seat seat miles (amount of Present
of the (amount of miles - Present seats year's
aircrafts seats (amount year's available X Available
available X of seats available number of seat
number of available seat miles miles miles )/Pres
miles X )/Present flown by ent year's
flown by number year's the aircraft) Available
the of miles available annually seat miles
aircraft).an flown by seat miles
nually the
(25%) aircraft )
annually
Revenue Increase (Last 0.0187 Increase (Last year's
IndiGo Airlines ITSDI Major Assignment Group 1
 Passenger in the year's 5 Revenue RPMs-
Mile (A Revenue RPMs – passenger Present
passenger Passenge Present mile year's
who has r Mile year's annually RPMs)/Pres
paid and is annually RPMs)/P ent year's
flying one resent RPMs
mile year's
constitutes RPMs
RPM )
Annually
(25%)

Yield: Increase system 0.0112 Increase in system yield

Revenue in the yield = 5 the = passenger
per Revenue passenger Revenue revenue /
Passenger per revenue / per total
Mile Passenge total Passenger Revenue
annually r Mile Revenue Mile passenger
(15%) annually passenger annually mile
mile
Increase in Increase Revenue 0.0112 Increase in (Previous
the Load in the Passenge 5 the load year’s load
Factor Load r Mile/ factor factor -
,i.e,Product Factor Available annually Present
ion ,i.e,Produ Seat Mile year’s load
Compared ction (load factor)/prese
with the Compare factor ) nt year’s
Capacity d with year's load
Annually the factor
(15%) Capacity(
annually)
Cost per Reduced Total 0.0150 Decrease in Total
Available Cost per operating the CASM operating
Seat Mile Available expenses/ expenses/To
(defined as Seat Mile Total tal
the cost annually Available Available
required to seat mile seat mile
fly one seat capacity capacity
whether annually annually
empty or
filled for a
mile
annually
(20%)
Enhance the 0.09 Optimize % of time (Availabl 0.027 % of idle (Available
Operational crew the crew e time the time time on a
competence utilization is crew is day - Time
( 30%) in terms of available present allocated)/A
time and and % of on a day - vailable
flexibility time the Time time
in case of crew assigned)
fluctuations remains /Time the
in real- idle crew is
IndiGo Airlines ITSDI Major Assignment Group 1
 world available
circumstan
ces (30%)
Load Calculate Centre of 0.018 % Centre of
Planning the centre gravity deviation gravity
(determinin of gravity before in centre of before
g the ideal (It must arranging gravity for arranging
centre of fall the cargo the limits the cargo
gravity for within -centre of specified -centre of
the aircraft the stated gravity gravity after
in order to limits after arranging
ensure that recognise arranging the cargo/
the fuel d by the the cargo/ centre of
efficiency aircraft centre of gravity after
is industry) gravity arranging
maximum ; after the cargo
can be arranging
done by the cargo
rearranging
the cargo )
(20%)
Fuel % of fuel (Fuel 0.045 % of fuel Fuel
savings saved in consumpt saved due consumptio
(Reduce due to ion prior to proper n prior to
fuel costs proper to the flight the flight
through an flight flight planning planning -
advanced planning planning Fuel
approach to - Fuel consumptio
flight consumpt n after flight
planning ion after planning has
and flight been put in
scheduling planning place
the routes has been optimization
in an put in )/Fuel
optimal place consumptio
way (50%) optimizat n after flight
ion)/Fuel planning has
consumpt been put in
ion after place
flight
planning
has been
put in
place

1.4.2 Human Resources Department scorecard

Departmental Operational
Functional Wt Objectives KPI Metrics Wt KPI Metrics
Strategy
Improve 0.05 Requireme % of gap (No of 0.02 % of gap (No of

IndiGo Airlines ITSDI Major Assignment Group 1

the nt- between employees between employees
process of availability the required in the required in
Recruitm gap employee each employee each
ent and analysis required indepartment required in department -
hiring (40%) departmen - No of departmen No of
(25%) t and the employees t and the employees
employee available in employee available in
that areeach that are each
available department available department )/N
in each )/No of in each o of employees
departmen employees departmen available in
t available in t each
each department
department
Standards Of Number of 0.01 Of Number of
maintained employees 5 employee employees
employee
while meeting or meeting or meeting or
recruitment meeting or exceeding exceeding exceeding the
reflecting the industry the industry
exceeding
in the standard set industry standard set /
quality of the / Total no standard Total no of
the of set employees
industry
employees employees
30%) standard
set
Offer: Ratio of Total 0.01 Ratio of Total number
Acceptance number of number of 5 number of of offers
Ratio offers offers offers accepted by the
(30%) accepted accepted by accepted candidates /
to the the to the Total number
offers candidates / offers of offers
extended Total extended extended to the
number of candidates
offers
extended to
the
candidates
Better 0.05 Cost of Lowering Total 0.01 Lowering Total training
arrangem training the cost of training the cost of costs
ents for (20%) training costs training /Headcount( no
training per /Headcount per of employees )
program employee ( no of employee
mes employees
which will )
enhance Regularity Number of No of 0.01 Number of No of training
the of training times training times sessions
learning (20%) training sessions training conducted for
and help sessions conducted sessions the employees
the are for the are annually
employees organised employees organised
to for the annually for the
familiariz employees employees

IndiGo Airlines ITSDI Major Assignment Group 1

e Time spent Increase average 0.01 Increase average
themselve in training the time amount of 5 the time amount of
s with the (30%) spent hours of spent hours of
new training training per training training per
system employee employee
(25%) Staff number of Total 0.01 number of Total number
available training number of 5 training of training staff
for training staff per training staff per available/ total
(30%) employee staff employee number of emp
available/ loyees
total
number of
employees
0.05 Market % (IndiGo's 0.02 % (IndiGo's
Improve Index deviation compensati 5 deviation compensation -
ment in (50%) from how on - from how Industry
the you pay Industry you pay standard
Compens for your standard for your compensation
ation employees compensati employees plan)/Industry
structure jobs on jobs standard
relative to plan)/Indus relative to compensation
market try standard market plan
paid rates compensati paid rates
for the on plan for the
same jobs same jobs
Salary % of (salary - 0.02 % of (salary - range
Range salary an range 5 salary an minimum
Penetration employee minimum employee Salary given to
(50%) gets Salary gets the
compared given to the compared employee ) /
to total employee ) to total (range
salary / (range salary maximum of
range maximum range salary - range
of salary - minimum of
range salary
minimum
of salary )
Enhance 0.05 Increase in % of staff No of staff 0.05 % increase No of staff for
Performa the % of for whom for whom in the % of whom
nce staff for performan performanc staff for performance
Appraisal whom ce has e has been whom has been
and performanc been assessed in performan assessed in
assessmen e has been assessed in time ce has time allotted in
t method assessed in the allotted in been previous year-
the allotted allotted previous assessed in No. of staff for
time time year- No. the whom
(100%) of staff for allotted performance
whom time has been
performanc assessed in
e has been time allotted in
assessed in this year)/ No.
time of staff for
allotted in whom
IndiGo Airlines ITSDI Major Assignment Group 1
 this year)/ performance
No. of staff has been
for whom assessed in
performanc time allotted in
e has been this year
assessed in
time
allotted in
this year

1.4.3 Sales & Marketing Department scorecard

Departmental Operational
Functional Weig Objectiv KPI Metrics Wei KPI Metrics
Strategy htage es ghta
ge
Generate 0.07 Sales Marketing Marketing 0.07 Marketing Marketing
better sales revenue expenses as expenses/To expenses as expenses/Total
revenue as a a tal sales a sales revenue
(35%) percentag percentage revenue percentage generated
e of of the of generated of sales
marketin sales revenue
g revenue
expenses generated
Capitalize and 0.06 Market Market Revenue 0.03 Market Revenue
increase the index share of generated by share generated by
market share (50%) IndiGoairli IndiGo captured IndiGo/Revenu
(30%) ne vsthe airline byIndiGo e generated by
Market /Revenue airlines vs the existing
share generated by Market competitors
captured the existing share
by the competitors captured by
competitors the
competitors
Customer No. of Number of 0.03 No. of Number of
Retention original Customers – original Customers –
Rates customers Customers customers Customers that
(CRR to the no. that are to the no. are lost/could
(50%) of lost/could of not be retained
customers not be customers by the
lost retained by lost company)
the /Total Number
company) of Customers
/Total for the
Number of specified
Customers period annually
for the
specified
period
annually

IndiGo Airlines ITSDI Major Assignment Group 1

Remodel and 0.07 Customer Comparing (Annual Comparing (Annual profit
ensure better Lifetime the profit made the made per
pricing Value revenues per revenues customer
strategy generated customer * generated *Average
(30%) by Average by number of
customers number of customers years (time
to the costs years (time to the costs period) for
related for period) for related for which they
the which they the remain a
company remain a company customer)-the
with customer)- with initial cost
acquiring the initial acquiring incurred for
those cost those customer
customers incurred for customers acquisition
customer
acquisition

Sales Sales Sales 0.03 Sales Sales revenue

revenue revenue revenue due 5 revenue due to discount
due to due to to discount due to offers, loyalty
discount discount offers, discount points for
offers, offers, loyalty offers, frequent flyers
loyalty loyalty points for loyalty or seasonality
points for points for frequent points for in prices
frequent frequent flyers or frequent
flyers or flyers or seasonality flyers or
seasonalit seasonality in prices seasonality
y in in prices /total sales in prices
prices
(50%)
Sales % of sales sales 0.03 % of sales sales revenue
revenue revenue revenue 5 revenue during the
due to during the during the during the period when
availabity period period when period price offered is
of when price price offered when price low /Total
reduced offered is is low /Total offered is sales revenue
prices low sales low annually
(50%) revenue
annually

1.4.4 Reservation & Ticketing Department scorecard

Functional Operational
Functional Wt Objectives KPI Metrics Wt KPI Metrics
Strategy
Enhance 0.105 Staff Ratio of No of staff 0.0 Ratio of No of staff
Check-in available for staff available 315 staff available at the
counter check in at available at the available at check in

IndiGo Airlines ITSDI Major Assignment Group 1

experience the check in at the check in the check counter / No of
and ensure counter check in counter / in counter passengers that
better (30%) counter No of and the have to be
efficiency and the passengers passengers cleared for
during passengers that have to be check in
check in to be to be cleared
cleared cleared for
check in
Time taken Reduction (Time 0.0 Reduction (Time required
for clearing in the time required 42 in the time for clearing a
a passenger that a for that a passenger in the
( time passenger clearing a passenger previous year-
period from has to passenger has to Time required
the moment spend at in the spend at for clearing a
the the check previous the check passenger in the
passenger is in counter year- in counter existing year)/
first Time Time required
addressed at required for clearing a
the check in for passenger in the
counter to clearing a existing year
the time the passenger
issuing of in the
boarding existing
pass takes year)/
place ) Time
( 40%) required
for
clearing a
passenger
in the
existing
year
Time of Reduced (Time to 0.0 Reduced (Time to get
clearing time for get 315 time for baggage
baggage at customer baggage customer to checked in at
the check in to get the checked in get the the check in
counter per baggage at the baggage counter in the
passenger checked in check in checked in previous year-
(30%) at the counter in at the Time to get
check in the check in baggage
counter previous counter checked in at
year- the check in
Time to counter in the
get current year)/
baggage Time to get
checked in baggage
at the checked in at
check in the check in
counter in counter in the
the current current year
year)/
Time to
get
IndiGo Airlines ITSDI Major Assignment Group 1
 baggage
checked in
at the
check in
counter in
the current
year
Streamlini 0.105 Calculation % (Real time 0.0 % (Real time
ng the of time deviation taken to 525 deviation taken to book
online required to from the book the from the the tickets-
ticketing complete estimated tickets- estimated Estimated
process the process optimal Estimated optimal optimal time
(35%) of booking time optimal time taken to book
the calculated time taken calculated the tickets)/Real
ticket( 50%) for to book for booking time taken to
booking a the a ticket book the tickets
ticket tickets)/Re
al time
taken to
book the
tickets
Security of Number (Previous 0.0 Number of (Previous year’s
the of year’s No 525 complaints No of
transaction complaint of registered/r complaints year
s complaint ecorded concerning the
registered/ s year concerning online payment
recorded concernin online issues –Existing
concernin g the payment year’s No of
g online online method complaints
payment payment annually concerning
method issues – online payment
annually Existing issues)/ Existing
year’s No year’s No of
of complaints
complaint concerning
s online payment
concernin issues
g online
payment
issues)/
Existing
year’s No
of
complaint
s
concernin
g online
payment
issues
Upgrading 0.09 Price index Price Price of 0.0 Price Price of flight
Customer ( 40%) difference flight 36 difference tickets of the
satisfactio with tickets of with competitor -
n at respect to the respect to Price of flight
IndiGo Airlines ITSDI Major Assignment Group 1
different the price competitor the price of tickets of
levels of the - Price of the IndiGo
(30%) competitor flight competitor
in the tickets of in the
market IndiGo market
Incident Ratio of Time 0.0 Ratio of Time taken to
handling amount of taken to 27 amount of be
time (time time taken be time taken acknowledged
taken to for acknowled for by the support
record the customers ged by the customers staff/average
grievance/re to be support to be talk time (time
quest) and acknowled staff/avera acknowled it takes for the
average talk ged to the ge talk ged to the interaction to be
time (time time it time (time time it resolved)
spent on a takes for it takes for takes for
customer)30 the the the
%) interaction interaction interaction
to be to be to be
resolved. resolved) resolved.
Prompt Ratio of No of 0.0 Ratio of No of incidents
resolutionN incidents incidents 27 incidents resolved/Total
o of resolved resolved/T resolved to no. of incidents
interactions to the total otal no. of the total recorded
resolved incidents incidents incidents
(incidents recorded recorded recorded
resolved)
upon
contact with
a customer
with request
for
information/
reservation
or
termination(
30%)

IndiGo Airlines ITSDI Major Assignment Group 1