Page 387 - Global Project Management Handbook

19-2 MANAGEMENT OF THE PROJECT-ORIENTED COMPANY

This chapter describes a further development of the project portfolio score card (PPSC)
as a control instrument for project-oriented organizations. The goal of this development
was to take into consideration the structures of the European Foundation of Quality
Management (EFQM) model, as well as to incorporate into the project portfolio score
card the evaluation of quality in the fulfilment of the business processes within a
project-oriented organization. In this manner, the PPSC becomes a strategic control
instrument.
The newly developed model of the PPSC will be explained, its criteria and units of
measure described, and the results of use of the PPSC will be shown through a concrete
example. In closing, the results of a case study in two organizations will be compared in a
quality Shewhart control chart.

SCORE CARDS IN PROJECT-ORIENTED ORGANIZATIONS

Score cards for various applications have been developed on the basis of the balanced score
card, such as the investment score card, the project score card, the project portfolio score
card, and the risk score card. The origin of the score card can be found in the description
of the evaluation and management system “balanced score card” by Kaplan and Norton 1
that was developed to provide managers with a comprehensive tool for evaluating the
development of an organization.

Balanced Score Card

The balanced score card was conceived by the Norton Institute in 1990 under contract
from corporate consultants KPMG as “measuring performance in the organization of the
future” and has been further developed over time. The evaluation systems of various
organizations in various industries were studied, out of which a uniform evaluation
scheme was developed. Balanced means that the focus was not strictly on finance but
that other perspectives that make a fundamental contribution to the success of the orga-
nization also are taken into consideration. The results were four balanced score card
perspectives:

● Finance
● Customers and market
● Internal processes
● Learning and development
Only the combination of all four perspectives creates a complete picture of the
organization. In order to gather the many indicators from an organization and seek out
those which also provide key information for the fulfilment of the organization’s
strategic goals, it is necessary to recognize the relationships between the indicators
and their interconnected influences. Out of these, the strategically important success
factors can be compiled and defined as drivers for the achievement of the strategic
goals.
An essential success factor in the balanced score card is its relationship to the
2
future, whereas, for example, the DuPont method deals only with the past. With the
score card, a communication and control instrument becomes anchored in the organiza-
tion, which makes the permanent verification of goals in every area of the organization
possible. 3