Implementation process of Balanced Scorecard is followed by its maintenance. Just developing a set of key performance indicators and introducing Balanced Scorecard to the company is not enough. The entire personnel must learn to live with Balanced Scorecard and use this effective performance evaluation and strategic management system in routine everyday work. This concerns all industries and business types, including hotel business. It should be mentioned that hotel industry is particularly competitive, and thus, control of adopted strategy is extremely important since any mistakes and dedications may result in loss of competitive advantage and consequently in monetary losses. In theory, Balanced Scorecard looks great. If you read reviews and works by creators of this tool, Norton and Kaplan, you will learn that BSC is created to communicate operational and strategic management. Very often, strategies remain on paper and never transform into real actions. This is a very common problem in many businesses
. One of the greatest mistakes in implementation of Balanced Scorecard is inability to maintain and control the system. In this article, well talk about hotel Balanced Scorecard, its components and operations to control the system.
As known, Balanced Scorecard starts with development of a strategy. This is the first age that many top managers fail. What is a strategy for hotel? Making a lot of money is a good goal but strategy is something different. One has to identify mission and values for the hotel. Top managers should answer simple questions where will we be in several years or how will we satisfy needs of our customers? A strategy is a global plan that implies future vision. It also contains methods of achieving and controlling strategy implementation.
Choice of key performance indicators is a subsequent stage that also requires much attention. The most typical hotel KPIs are room occupancy, percentage of international guests, house keeping costs per overall expenses, average revenue per room, average revenue per customer, percentage of customer complains per total number of customers and others. It is important to select the right indicators that represent critical success factors. It is never late to introduce amendments to hotel Balanced Scorecard and substitute indicators if the wrong choice was initially made. Key performance indicators offer top managers real time information on how well the strategy is being implemented at the moment. Moreover, some indicators, namely leading KPIs, can tell much about what is going to happen in the nearest future. For example, improvements in customer satisfaction imply that satisfied customers will come back to the particular hotel which means growth of revenue.
Finally, it needs mentioning that the most important stage is maintenance of Balanced Scorecard. It is possible to develop strategy and key performance indicators within several days. It is possible to present a Balanced Scorecard to the personnel and explain why the company needs to use this system. However if top management and ordinary personnel is reluctant to use Balanced Scorecard all have an entirely wrong concept of this system, BSC will most certainly fail as it will only complicate management process.
