Balanced Scorecard Project Plan

Balanced Scorecard Project

Project Plan

Prepared By:

HealthPort Process Improvement Team

HealthPort120 Bluegrass ParkwayAlpharetta, GA 30005Phone: 800.367.1500

http://www.healthport.com

This document has been prepared for HealthPort Board of Directors, Executive Team, and all levels of Management to outline HealthPort’s goal to develop a Corporate Balanced Scorecard Management System.

Specifications contained in this Management Plan are subject to change and these changes will be reported in subsequent revisions or editions.

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Table of Contents

Introduction......................................................................................................................................5Executive Summary.........................................................................................................................6

Goals and Objectives....................................................................................................................6Implementation Summary.............................................................................................................6

Project Scope................................................................................................................................... 9Project scope summary.................................................................................................................9Implementation strategy and approach........................................................................................9Project Team...............................................................................................................................10Strategic Goal Development.......................................................................................................13Project objectives/measurements/Summary...............................................................................14Critical success factors................................................................................................................16Assumptions...............................................................................................................................17Technical requirements...............................................................................................................17Completion requirement.............................................................................................................17

Project constraints.........................................................................................................................18Project Deliverables.......................................................................................................................19Project milestones..........................................................................................................................20Resource estimates........................................................................................................................24Project administration and management status reporting.............................................................25

Time reporting............................................................................................................................25Issue and Change management..................................................................................................25Project meetings.........................................................................................................................25Project documents......................................................................................................................25

Executive Sponsor Signoff..............................................................................................................27Professional Affiliations..................................................................................................................28References.....................................................................................................................................28

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Introduction

The Process Improvement Team submits this Balanced Scorecard Project Plan for your review and approval. The document describes in detail our commitment to design, implement and manage a corporate Balanced Scorecard.

As you review this Project Plan, it is important to remember that this document is intended to be a working instrument and the Process Improvement Team, with the input and commitment of the entire company, have responsibility over its final content.

We look forward to working with the entire HealthPort organization as we develop a new strategic management process that will link each Business Unit, Shared Service and every individual to the unique features of our strategy.

Joyce Conner-BoydNational DirectorProcess Improvement

Executive Summary

Goals and Objectives

The Process Improvement Team’s goal is to create a Balanced Scorecard for HealthPort. Business Intelligence Analysts have determined that there are limitations to utilizing only financial outcome measurement of corporate objectives, as they fail to measure intangible assets which are an increasingly large portion of most organizations market value. The goal of the Balanced Scorecard is to measure not only the financial outcomes, but also the value created from intangible assets, direct the focus of the organization on the corporate strategy and navigate resources and activities to the strategy. The description of the corporate strategy begins with HealthPort’s mission statement and core values and utilizes its’ vision as the future direction of the organization. The Balanced Scorecard will be a tool in assisting each individual in understanding how they support the organization. The development of a Balanced Scorecard will transform HealthPort into a learning-based organization that utilizes fact based decision-making to achieve corporate strategic objectives.

Refer to: “Summarize Control and Strategic Process” – Attachment 1, Worksheet # 15.

Implementation Summary

The implementation of the Balanced Scorecard involves a number of fundamental steps that are crucial to the success of the project. Through our research process, we ascertained that the original creators of the Balanced Scorecard define specific key principles that are required when building and implementing a strategy-focused management system. The Project Team will be following these “key principles” to help ensure our success in the implementation of a Balanced Scorecard for HealthPort.

Convert Corporate Strategy into Operational Terms with measurable parameters. In order to have the entire organization understand the corporate strategy, it must be able to be described. Therefore, we will measure the company’s assets and link them to corporate values. Strategic themes will be identified to support the corporate strategic objective and will be used to develop measured indicators. Once the strategic themes have been identified, a strategic map will be created. The strategic map will define and articulate specific objectives that will support each of the strategic themes. The map will demonstrate the interrelation of the objectives to each value perspective, and be utilized for setting measurements, targets and programs.

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Align the Organization to the Strategy. It is essential to align or “link” each decentralized business and shared services within HealthPort to one corporate strategy and scorecard. This “linkage” is referred to as the “strategic architecture” of the organization. The “strategic architecture” shoulddemonstrate how our organization will integrate the activities of the separate and independent business units. This integration or alliance will come to fruition by requesting each Business Unit to create their own strategy and scorecard, but with guidance from the corporate template and support from the Project Team so the outcome will ultimately reflect HealthPort’s corporate priorities. The shared services of each Business Unit will become a strategic partner in the process. The shared services will identify their own strategies and measurements and be accountable for improving those measures that are defined on the Business Unit scorecard. These “linkage” scorecards will be unique to each Business Units’ market opportunities, environmental circumstances, customer values and critical process.

The Strategy Becomes Every Employees Job Everyday. The Project Team will design educational programs that will create strategy awareness at all levels of the organization, assist with the development of individual goals and design compensation rewards that will align with HealthPort’s Strategic Objectives. The education programs will clearly and effectively communicate the strategy and make sure the message is received, that measures are understood and that the strategy is being followed. A variety of methods will be utilized to communicate and generate corporate awareness, to include use of the HealthPort website, brochures, meetings (both one-on-one and webinar), newsletters and training programs. With constant communication and usage, the strategy will become embedded into all on-going management practices and will become routine. The current corporate incentive compensation programs will be revised and redesigned to effectively represent the newly defined metrics. The reward program will provide employee attention to the critical processes and provide motivation for reaching organizational and individual targets.

The Strategy as a Continual Process. One of the Project Team’s priorities is to make the strategy a continual process throughout HealthPort. To accomplish this goal, budget and strategy development must be assimilated and strategy education meetings must be established. In regard to Budget and strategy development, the Team will implement what is called in the “strategic focused corporate environment”, the “double loop” strategic management system as the fundamental basis to assist in making the strategy a continual process. This process combines the management of budgets and operations with the management of strategies. The system is based on the Balanced Scorecard and will monitor progress and corrective actions. In this management system, the budget development process is not done as a separate process it will be combined with the strategic planning process and will be effective in creating a long term strategy plan. There will be two components of the budget, the strategic which will focus on achieving stretch targets and will be a blend of tactical and strategic spending. The strategic budget will provide the means to narrow the bridge between advanced performance and what is attainable through consistent improvement and business as usual. The second is the operational budget which will emulate the gradual improvement to existing operations.

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Strategy review meetings will be held quarterly to discuss the assumptions that drive the strategy. It is crucial to monitor and guide performance and verify that the process and systems remain on course toward profitability and if not identify the cause and take corrective action immediately. The cause and effect assumptions will be reviewed as they relate to each of the perspectives of the Balanced Scorecard. This will be accomplished by statistical analysis derived from each Business Unit. The meetings will provide the forum to discuss and review opportunities and threats from both internal and external events that may have an impact on the strategic plan. All employees will be allowed access tothe Scorecards and communication of performance will be reported with color coded indicators. The agenda of the meetings will be based on the Balanced Scorecard and will focus on teamwork, problem

solving and strategic change. Attendees of the meeting will be the Executive Team and all management personnel that play a key role in the strategy.

Implement Balanced Scorecard through Communication and Guidance from Senior Executives Leadership. There are many reasons in which a company’s Senior Executives may decide to develop a Balanced Scorecard. HealthPort’s Sr. Executives made the decision to implement a Balanced Scorecard based on the current growth of the company and based on the knowledge that due to this positive corporate expansion, future challenges will be very different from the past. In addition, they have a strong desire to provide the entire organization with inspiration about this positive future. The Executive team that initiated the Balanced Scorecard knows what the vision of success looks like and they have extensive knowledge of the outcomes the company is trying to achieve. The Project Team will work together with Executive Leaders to communicate the need for the Balanced Scorecard to the employees by describing the values, the purpose and the direction of the organization. The Balanced Scorecard will be the tool to communicate the vision and strategy, but it will depend upon the employees to find creative ways to successfully complete the mission.

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Project Scope

Project scope summary

The Process Improvement Team will assist the HealthPort organization in meeting its’ strategic goals by developing a Balanced Scorecard to focus on the corporate strategy. As mentioned previously, the traditional financial measurements are no longer adequate in our business environment where intangible assets encompass a large portion of HealthPort’s market value. It has become a priority to identify and measure those assets such as skilled staff, exceptional customer service, advanced internal processes and loyalty of the customer base. The Balanced Scorecard will begin with the corporate strategy as it’s’ “core” with structural framework that includes financial performance, customers, internal processes and learning and growth. The Process Improvement Team with input from the corporate drivers of the Business Units will develop the strategic objectives, forms of measurement, target value and initiatives of each of the Balanced Scorecards four primary perspectives.

This Balanced Scorecard system will provide HealthPort with the means to convert the corporate strategy into a measurable format, to easily communicate the strategy within the organization, position each employee’s individual goals with the corporate objective and provide feedback regarding the results of the process.

The development of the infrastructure of the Balanced Scorecard involves a multitude of detailed processes which include, but not limited to: preparing a checklist of strategic information sources, creation of a project timeline, defining three types of teams to drive the development, establish strategic goals per Business Unit, determine strategic themes and then create a strategic map, define measurements for each strategic objective, define the sources of measurement and how it is derived and reported, determine targets and identify performance gaps, select programs and plot the impact of the programs against all strategic objectives and finalize by summarizing objectives, measurements, targets and programs. This final process is the Balanced Scorecard.Refer to: “Balanced Scorecard Project Workbook” – Attachment 1.

Implementation strategy and approach

Process Input

The process of developing a Balanced Scorecard involves the collection of a vast amount of information regarding the HealthPort’s current plans, goals and measurement tools as well as any industry analysis that are related to the corporate strategic plan. A checklist of information and resources will be created and utilized to assist the Core Team in the compilation of the strategic information. The Team will be required to meet with each specific Business Unit and Shared Service to interview the management leaders and ascertain their goals and objectives. These meetings will provide a good forum for the Team to communicate

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and educate these management groups regarding the development of a corporate Balanced Scorecard and the alignment of all Business Units' processes to one corporate strategy.

Refer to: “Process Input Checklist” – Attachment 1, Worksheet # 1.

Development Timeline

The development of the Balance Scorecard will be documented with a timeline that will describe each step of the process and assist with maintaining the projected completion date. The initial phase is the planning processes that will involve the development of objectives for the scorecard, building the project teams and the formulation of a project plan and a communication plan. The second phase involves the actual development of the scorecard and the focus of effort will include input from each Business Unit and Shared Service in HealthPort and the combining of all the necessary data elements into a single repository. The development phase will allocate time frames for completing fundamental steps to include, but not limited to: gathering background material, confirming company mission, vision and strategy, develop strategic goals, performance objectives and measures, build a strategic map, develop cause and effect linkages, set targets and prioritize initiatives and create an ongoing Balanced Scorecard implementation plan.

Refer to: “Development Timeline” – Attachment 1, Worksheet # 2.

Project Team

Summary

The project team will be comprised of three specific teams that will drive the development of the Balanced Scorecard; the Leadership Team, the Core Team, and the Measurement Team. The three teams will include individuals from each of HealthPort’s Business Units. These team members will be assigned a project role and will be responsible for the tasks assigned to that position. This group model-building approach and constant communication among the teams are instrumental in broadening ownership and essential for a successful implementation.

Project Development and Management

The project Leadership Team will be responsible for approving the project team assignments and approving processes as the project evolves through various stages of development. The Project Director will be very involved in every aspect of each phase of the process and will provide guidance and management support to the teams from discovery and development through implementation. This will include the monitoring of the project timeline, communication protocol, information distribution and project issue resolution. The Project Director will keep the teams engaged to assist with continual revisions and review processes that will be required to determine the effectiveness of the metrics.

Selecting the right individuals for each team is extremely important in ensuring that the development process is completed efficiently and timely. Therefore, there are very distinct

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fundamental qualifications associated in each team’s job description. Listed below is an outline defining the membership qualifications for each team.

Leadership Team Strategic thinker and understands the overall business Major supporter of the Balanced Scorecard Very supportive of others involved in the process Effective at communicating strategy to others Well qualified to make decisions regarding themes, objectives, etc.

Core Team * Possesses good overall understanding of the business Possesses good skills at interviewing and extracting “big picture” information Maintains high credibility and respect with other Managers Has the ability to “sell” the Balanced Scorecard to other functional areas Works well with upper level management Possesses good skills at documenting and presenting strategic results

Measurement Team Possesses a very detailed understanding of the functional area Capable of gathering and analyzing detailed data for clear communication to others Able to comprehend strategic issues and connect the issue to their job Works well with middle level management

Refer to: “Team formation Checklist” – Attachment 1, Worksheet # 3.

* The Core Team is the primary team for building the Balanced Scorecard. The Core Team will be collecting and gathering information from a series of interviews with the Leadership Team. Core Team members will also refer back to strategic information sources. Once the Core Team has an understanding of the strategic issues, they will document the components of the Balanced Scorecard: Strategic Goals, Strategic Objectives,Maps, etc. The Core Team will need to execute on the following critical steps:

Gain a solid understanding of the development process behind the Balanced Scorecard Collect strategic information and do preliminary research to gain a strategic view of the

business Conduct one on one interviews with members in the Leadership Team of Business Units Consolidate strategic information into strategic goals and themes Confirm results with Leadership Team Identify strategic objectives and develop maps for each theme Meet with full Leadership Team to approve strategic maps

Refer to: “Core Team Checklist” – Attachment 1, Worksheet # 4.

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Team Formation:

Leadership Team

TEAM MEMBER BUSINESS UNIT RESPONSIBILITY

Steve Roberts, COOExecutive Sponsor

HealthPort

Joyce Conner-BoydExecutive Sponsor

HealthPort

Core Team


Torrey BarnhouseProject Assistant

Nixa

Diane DeMerse HealthPort

Bryan Gery HealthPort

Tom Palen HealthPort

Sonya Spicer HealthPort

Kira Westin, RHIA HealthPort

Measurement Team


ROI

Nixa Group

Columbia Group

Atlanta Group

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Project Communication

This project has various critical goals and milestones that need to be attained in order for the project to be successfully completed in a timely fashion and to be maintained long term. Therefore, constant and open communication, although on different schedules, will be essential between all participants. The Project Director, as the driver the project, will be instrumental in establishing and maintaining the timing and the methodology of all formal communication. The Senior Executives of HealthPort, the corporate leaders of the strategy, will communicate on regular basis to the entire organization the progress of the project and reiterate the value of creating a Balanced Scorecard. The delivery of these messages is crucial to the success of the entire project as they will strongly affect each individual’s motivational response to the implementation of a Balanced Scorecard system. The Core Team, the primary team responsible for building the Balanced Scorecard, will make it their priority to coordinate the communication methods and timing with and between the other Team members, Business Units and Shared Services participants. All forms of communication; e-mail, telephone, web casts, group meetings, and one-on-one meetings, will be used to accomplish the successful development and implementation of the Balanced Scorecard.

Strategic Goal Development

Balanced Scorecards begin with the development of strategic goals. The HealthPort corporate strategic goals will be set by the Executive Leadership Team and will be based on the HealthPort vision and mission statements. The corporate strategic goals will be driven by a number of events, such as past performance and where HealthPort wants to be in the industry. These goals will be the foundation and the driving force for the development of the rest of the Balanced Scorecard. Once the corporate strategic goals are defined the Core Project Team will work in conjunction with the Project Director and selected Project participants to identify strategic themes to support the Strategic goals throughout each of the four perspectives. The themes will reflect what must be done to in order to succeed in and all strategic themes will be approved by the Executive Leadership team before continuing with the development.

Refer to: “Establish Goals and Theme Checklist” – Attachment 1, Worksheet # 5 & 6.

The Project Team will ensure that the strategic goals and themes are clearly defined and approved by the Leadership Team, then they will begin to develop the strategic map. The strategic map will support the articulation of the business drivers and will communicate the causal relationship among key performance indicators and their objectives. A strategic map will be created for each theme and strategic objectives will be established and inserted into the map with connecting arrows to describe the cause and effect relationship. The Core Team will work closely with all the project participants to construct the map. It is essential that there is “buy in” on each of the maps before continuing. The Project Director will grant final approval

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of the map and it will then be presented to the Executive Leadership Team. The strategy map will be used to guide the Business Units and Shared Services in the development of their key performance indicators.

Refer to: “Strategic Map” – Attachment 1, Worksheet # 7.

Project objectives/measurements/Summary

Measurement of Project Objectives

The objective of the Balanced Scorecard project is to develop a process in which HealthPort will attain its’ corporate strategic objective. This is accomplished by measuring outcomes that will navigate the organizations resources and activities to the strategy. Measures are how progress for each specific objective will be determined. Measurement has an impact beyond reporting past performance, they create the focus for the future, as managers define the measures that will communicate to the organization what is important. Each Business Unit and Shared Service will complete a Business Requirement Form to define the metrics based on their objectives to create a scorecard that will align with the corporate objective.

Refer to “Measurement Basics” – Attachment 1, Worksheet # 17

The Balanced Scorecards contain financial, customer, internal process and learning perspectives, which have specific strategic objectives. Measurements must be defined for each of these strategic objectives to include the sources for the measurement, and how the measurement will be obtained and reported. All strategic measures should be closely related to the actual performance drivers to easily evaluate the progress made toward achieving the objectives. Once the measurement definition process has been completed, the measurement attributes must be summarized. The attributes or characteristics belonging to each selected measurement will communicate how the measurement relates to a particular cause.

Refer to: “Measurement Definition” and “Measurement Summary”Attachment 1, Workbook # 8 & 9

The Balanced Scorecard must consist of a good balance of both lag indicators and lead indicators. Lag indicators usually represent past performance, represent the consequences of action and lack the ability to predict. Lead indicators are performance drivers, which would suggest that improvement of the lead indicators will result in higher achievement in the lag indicators. Both indicators compliment each other and demonstrate how targets will be achieved. The Financial and Customer perspectives typically contain lag indicators and provide outcome measurements, where the Internal Process and Learning perspectives usually include some lead indicators and therefore provide more driver type measurements.A worksheet will be developed to categorize all measurements and compare both of these types of measurements.

Refer to: “Measurement Lag/Lead Comparison” – Attachment 1, Worksheet # 10

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Target Development

Targets “represent desired result of a performance measure”. The performance results in turn, will provide valuable feedback about performance to the company. This is the stage in the Balanced Scorecard development in which linkage with the budget is essential to establish stretch targets and identifyPerformance gaps. Budgets will be used to establish targets, assist in reviewing performance in relation to targets and will be utilized to update targets based on new information and education. The financial targets will be determined first, and then the non-financial targets. Stretch targets, effective in inspiring and driving change, will be established for each measure and will be determined prior to setting short term targets. As identified in the Balanced Scorecard Workbook, some of the sources for determining targets are: strategic goals, industry benchmarks and best practices, and incremental improvement to existing performance levels. The last source, incremental improvement to existing performance is when we will identify performance gaps between the company’s actual performances with its’ potential performance. This “gap analysis” will provide the organization with insight into areas that could attain a higher level of performance. This analysis will naturally flow from our benchmarking efforts and from other forms of current performance assessment. The gap analysis will allow the organization to establish targets for the new product and service offerings as well as the existing by reflecting where the total profits are currently, to where they are forecasted to be with the introduction of new offerings in the marketplace.

Refer to: “Target Checklist” – Attachment 1, Worksheet # 11

Program Evaluation

The Project Team will work in conjunction with the Business Units and Shared Services to identify and select programs and plot their impact against strategic objectives. All programs will be evaluated based on a combination of analysis and not all programs need to be mapped against a strategic objective. All program attributes will be listed to include: program sponsors, start and stop dates, program benefits, etc. Once again the gap analysis will determine which programs don’t impact any strategic objectives and identify objectives that have no programs. A worksheet will be created for evaluating the programs against the objectives. Most of the programs will be related to the Customer, Internal Process and Learning perspectives, they are not typically related to the financial perspective.

Refer to: “Basic Program Attributes” and “Plot Impact of Programs against all Strategic Objectives” – Attachment 1, Worksheet # 12 & 13

Summary of Objectives and Measurements

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The Balanced Scorecard is the framework for a strategy performance management system and measures the organizations strategy. Once objectives are defined, forms of measurement selected, targets established and programs identified; we will have all the critical components of our Balanced Scorecard. This will become the tool for defining and managing the HealthPort strategy. The components will be summarized in a spreadsheet and communicated with all Project participants and presented for approval from the Executive Leadership Team.

Refer to: “Summarize Objectives, measurements, Targets and Programs”Attachment 1, Worksheet # 14

Critical success factors

Senior Management SupportIt is imperative to have the support and commitment of Senior Management to communicate HealthPort’s Strategy so the middle management teams can effectively participate in building the Balanced Scorecard. Senior Managements knowledge and authority is required to create and approve the Balanced Scorecard by participating in one-on-one interviews and meetings with the core project team to discuss cause and effect relations on the strategy map, compile objectives, measures and targets. Senior management must be available to resolve any strategy development issues that may arise.

Project team membersDesignating the right individuals and the correct number of individuals as project team members is critical to the development of the scorecards. Our creation process will involve the development of scorecards that will cascade from the top level down to the Business Units and Shared Services. This method will assist in aligning the efforts and activities of the participants. Project Teams will be formed at each level to focus on scorecards for specific strategic themes, key performance indicators and measures that will be guided by, and defined by the overall corporate strategy.

“Buy In” from Mid-level ManagementOne of the most important factors in successfully developing and implementing a Balanced Scorecard will be the “buy in” or the support of the middle level management team. The management team needs to understand the value and the rewards to be obtained from the implementation of the scorecard system and communicate the message and the commitment to all employees. Delivering this message will only be accomplished if the management team has strategy awareness, participates personally in setting individualand team goals and has a stake in the success of the program. Basically, they will need to take ownership of the project and become responsible for the outcome.

Technical SupportSupport from the Information Technology Team (IT) will be tantamount to the success of the program. It will be essential to automate the reporting processes to provide accurate statistical information, timely compilation and distribution of measures, and to maintain the

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integrity of the data. The development of a Balanced Scorecard Management System involves the creation of measurement tools, more specifically, dashboards that put information in context. There are three different types of performance management dashboards and each type contains graphical, multidimensional and transaction information. IT support will be a key factor in the initial development and the continual enhancement of the reporting system that populates the dashboards and uncovers trends. The data utilized to create the dashboards in which to measure these key performance indicators must be trusted, timely, accurate, and easy-to-use so that immediate action can be taken to respond to problems. The project team will rely heavily on IT for assistance in effectively executing the Balanced Scorecard System.

Knowledge of all Cognos modulesHealthPort utilizes Cognos as a performance management partner and the product has many modules that will be beneficial in compiling and analyzing information, data integration and ultimately dashboard development. It will imperative for the Core Project Team to receive intensive training on Cognos and all relevant modules. The solid knowledge of Cognos would enable the Team to understand the extent and limitations of the “tools” of the program and to gain expertise on linking data sources for performance measurement.

Assumptions

The Process Improvement Team has made a number of assumptions in regard to the development and implementation of the Balanced Scorecard Management System. The following assumptions will be tracked throughout the Project development to ensure that they are converted to fact.

Gain middle management “buy-in” or “support” to drive the project Obtain IT support to automate reporting processes and develop technology for data

integration Receive intensive training on company’s performance management program, Cognos to

include all applicable modules Project budgets will be approved and in a timely manner All employees will accept and embrace the Balanced Scorecard Management System The Project Teams will meet all milestones in the anticipated timeframe

Technical requirements

Technology is a key ingredient in the recipe for creating a Balanced Scorecard Management System as it allows the Scorecard to be linked with the organization so that synergies can be obtained. As we are aware from the Learning and Growth Perspective, intangible assets are required for organizational activities to betaken to higher performance levels. This perspective defines that an organization needs not only strategic competencies, and the appropriate climate for action, but strategic technologies. Specific to HealthPort’s project we need to develop our methods of acquiring and reporting Scorecard information. We require an IT “process innovator” to be assigned to the Balanced Scorecard Project to move the company from a manual reporting process into an

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automated process. The Scorecard must be linked to transactional databases to enable automatic and continual updating of scorecard measures. Technology is required to quickly and effectively turn data into useable information to track trends and ultimately drive the business toward the Corporate Strategy.

Completion requirement

To complete this project will require that there is continual and open communication between the Project Teams and all selected participants; that all milestones are achieved, that technological support is provided and that budgets are approved.

Project constraints

Every project is faced with certain constraints that may occur which could deter the anticipated project timeline and require the Project Team to refocus its’ efforts and resources. Outlined below are some of the Balanced Scorecard projects’ possible constraints, the impact they would have on the project and suggested workarounds.

Resistance from Business Unit ManagersMany organizations experience a form of “resistance” from management, and the impact of this situation can be severe and must be overcome for the project to proceed successfully. This type of response can be associated to lack of knowledge regarding the scope of the project, or a clear understanding of the benefits and rewards to be derived from the implementation of the Balanced Scorecard to both the company and the employees. Successful methods to redirect this type of response include further education regarding the goals and objectives of the project and increasing the participation of the managers in the project development.

Lack of Dedicated Technical SupportImplementing the project utilizing fully automated reporting systems and linking the scorecard to transactional databases will require full time technical support at least in the initial stages. Lacking this level of support will result in the project missing some designated milestones and in turn will delay the completion date of the entire project. To workaround this constraint would require the manual process of reports to continue, which will affect the integrity of the data, slow down access to performance results and the reaction time to problems and ultimately the organizations achievement of the corporate strategy. Another option, to be coupled with the manual processes, would be to solicit any IT resources on a part time or interim basis to start implementing the technology requirements in phases.

Budgetary LimitationsThe financial allocations for the technical, operational and marketing resources for the project are a priority for obvious reasons. Should limitations be placed on the budgets the project will be severely affected. In

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the event that this occurs, the budgets will be re-analyzed to determine where funds may be reallocated, and the Process Improvement Team will work with the appropriate management personnel to identify where operational and technical cost reductions could be introduced.

Time LimitationsHealthPort is currently in an exciting growth mode which could introduce certain events, either internal or external that may demand time from the Project Team and take focus away from the development of the Balanced Scorecard. In this situation, the timeline would be re-evaluated and resources reallocated to ensure that the project maintains momentum and the effect on completion date is minimal.

Project Deliverables

The Process Improvement Team will provide the deliverables listed below in accordance with the project schedule and project scope.

Item Description

Project Plan Deliverable of the planning strategy which identifies staff involved in the project, estimated time, approaches and techniques which will be used. Includes a scheduling timeline of resources and tasks. The project plan is a working document.

Timeline Chronological representation of key events within the scope of the project, consists of visual material accompanied by written commentary. Assists with maintaining the projected completion date.

Project Team Formation

Project team will be comprised of three specific teams created to drive the development of the project. Team members will be provided a specific role and be responsible for the tasks assigned to the position.

Strategic Map A diagram that describes and communicates how an organization creates value by connecting strategic objectives in explicit cause-and-effect relationships with each other within the four Balanced Scorecard Objectives.

Key Performance Indicators (KPI)

KPI’s will detail the specifications used to track the business objective. Each Business Unit and Shared Service will provide a general description of their metric, how it is calculated, the target and the stretch goals for the metric and how it aligns with the corporate strategy.

Dashboards Performance management tools that chart progress toward achieving strategic objectives by comparing performance against targets and thresholds. Performance dashboards will be created for each Business Unit and Shared Service with the guidance of the Corporate Strategic plan.

Report Automation The assessment of current reporting processes and the introduction of necessary changes to automate these procedures for the Balanced Scorecard reporting process.

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Education Process Improvement Team will host a variety of educational sessions, designed for the administrative team as well as other levels of management as to the benefits and effectiveness of the Balanced Scorecard to the entire organization and individually.

Incentive Compensation Plan

An incentive compensation plan will be developed and linked with the Balanced Scorecard to focus the employee’s attention on the measures and to provide motivation by rewarding the employees when they both reach their targets.

Project milestones

Task Description Estimated Time Frame

Create Balanced Scorecard Project Plan

Description of plan strategy, identifies project team, scope of work and development and implementation schedules.

Working documentOn- going

Milestone # 1 Timeline Developed

Planning Phase Define strategic goalsDevelop objectivesFormulate Project teamsDevelop communication plan

Development Phase

Gather background materialConfirm mission, vision and strategyInterview Executive TeamIdentify key themes driving the strategyBuild strategy mapDevelop cause and effect linkagesEstablish targets for measuresPlan for implementation

Milestone # 2 Project Teams Formed

Team Development

Leadership Team

Teams will be formed by selecting qualified individuals from each Business Unit and Shared Services management teams to participate on each of the three teams.

Strategic thinker that understands HealthPort businessMajor supporter of the ProjectSupportive of others involved in the projectEffective at communicating the strategyQualified to make decisions regarding the overall project plan

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Core Team

Measurement Team

Primary team responsible for building the Balanced ScorecardConduct series of interview with Leadership TeamDevelop components of the Balanced ScorecardExecute on critical steps

Resource to Core Team in the building of the Balanced ScorecardPossess detailed understanding of functional areaCapable of gathering and analyzing data for communication to othersAble to comprehend strategic issues and connect to their jobWork well with middle level management

Milestone #3 Build Strategic Map

Identify Strategy

Develop Strategic Goals

Identify Strategic Themes

Build Strategic Map

Executive Workshop

Confirm HealthPort mission, vision and value statementsInterview Executive Leadership Team

Review past performance and industry demands, our position

Core Team and Project Director identify Project participantsIdentify themes to support each strategic goal

Create a map for each themeEstablish strategic objectives for each perspectiveConnect components of map to clearly describe the cause-and-effect relationship

Present to Leadership Team for approval

Milestone # 4 Measures for Strategic Objectives are Identified

Create measures

Measurement Comparisons

Determine Targets

Define measurement, source of measurement and how it is derived and reportedIdentify attributes of each measurementSummarize attributes in spreadsheet for each of the four perspectives

Develop worksheet to identify Lag/outcomes and Lead/driver outcomes measurementsCompare the two outcomes measuresRe-evaluate and change measures if there is not a consistent balance between lag and lead

Scoreboard development and budget develop are linkedFinancial targets are developed firstDetermine stretch targets for each measureDetermine short term targets for each measure

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Gap Analysis

Select Programs

Executive Workshop

Identify performance gaps between actual and potential performanceEstablish targets based on analysis of existing products/services andinclude analysis based on new product/service offerings

Work with Business Units and Share Services and identify programsPlot programs to determine if they have an impact against the strategic objectivePerform an analysis to determine what the impact is to the strategic objectiveIdentify the perspective to which the program relates


Milestone # 6 Creation of Strategic Scorecard

Summarize objectives, measurements, targets and programs

Executive Workshop

Create a spreadsheet to include all objectives, measurements, targets and programsReview spreadsheet containing all critical components of the Balanced Scorecard with Project Team participantsTest measures with resource team


Milestone # 7 Developed Business Unit & Shared Services Scorecards

Educational Process

Develop Unique Business scorecards and individual dashboards

Executive Workshop

Provide educational sessions or materials to communicate the development of the corporate strategic scorecard

Interview all Business Unit and Shared Services to complete Business Requirement Form (BRF)Utilize results of Business Requirement Forms to develop Business Unit and Shared Services scorecards guided by the corporate strategic scorecardAssist Business Units and Shared Services in the development of individual dashboards to drive their business


Milestone # 8 Automated Reporting Process

Cognos Training Core Team attends Cognos training sessions on applicable modulesDocument tools of Cognos to be utilized in scorecard reporting process

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Report Requirement Development

Executive Workshop

Technical Workshop

Document “wish list” of Cognos functionality

List in detail reports that measure data to be automatedItemize transactional databases that should be linked for automatic and continual updating measures


Attend workshop with technical development team to describe/discuss scorecards report requirements and timelines

Milestone # 9 Incentive Compensation Plan Developed

Interview Business Unit owners

Executive Workshop

Collaborate with Business Unit owners to outline a reward programDecide on team based or individual based programs or combination of bothDocument all suggested incentive compensation plan concepts in detail


Milestone # 10 Implementation of Balanced Scorecard System

Executive Team Approval

Develop “roll out” plan with all Business Unit and Shared ServicesPrioritize steps to implement Balanced ScorecardConduct learning sessions for all levels of managementImplement the programs

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Resource estimates

Resource estimates will be determined to project the cost of the development, implementation and long term maintenance of the Balanced Scorecard Management System. The financial estimates will include allocations for the following:

Project Development Operational Processes Technical Development Internal Marketing

The Process Improvement Team, in conjunction with each Business Unit and Shared Service will be required to develop a financial estimate of resources required to represent the cost of developing, and utilizing the performance management system within their Business Unit. These resource estimates will be combined to produce one corporate budget that will represent what the financial impact will be to HealthPort to institute a Balanced Scorecard Management System.

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Project administration and management status reporting

Time reporting

Time reporting schedules will be developed at a later date.

Issue and Change management

The project teams and all management participants must work together to resolve any problems or issues that may arise during the development or implementation of the Balanced Scorecard Project. In the event that a resolution to any problem or issue constitutes a change to the project plan, the change will be reviewed and approved for action by the parties that are affected. Once the approval of the management group involved has been obtained, the Project Director will present the change to the Executive Leadership Team for final corporate approval. All corporate approved changes will be documented and distributed to all applicable Project Teams and other participants.The development of the Balanced Scorecard has a natural life cycle, at first it energizes the workforce and performance improves. Over time it will lose its impact and must be refreshed. This is an on-going project that we will continually revise and analyze for effectiveness.

Project meetings

Project meetings will take place on a predetermined schedule and will be conducted in various formats (IE: group meetings, one-on-one interviews, web casts, telephone conference calls, etc.) to ensure the inclusion

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and focus of all required participants. The specific dates, times and lists of participants have not yet been determined.

Project documents

The project documents will include, but are not limited to:

Project Plan – Description of plan strategy identifies project teams, scope of work and development and implementation schedules.

Balanced Scorecard Project Workbook - Excel spreadsheet containing several templates to help develop a Balanced Scorecard

Timeline - Timeline for Balanced Scorecard development process Business Requirement Forms – Form that each Business Unit and Shared Service

will complete that will provide a general description of the metrics for their business, how it is calculated and the target and stretch goals for the metric.

Strategic Map – Diagram that communicates how organizations create value by connecting strategic objectives in explicit cause-and-effect relationship with each other within the four Balanced Scorecard Perspectives.

Dashboards – Performance tools that chart progress toward achieving strategic objectives by comparing performance against targets and thresholds.

Power Point Presentation – Presentation developed by the Project Director to outline the benefits and development of a performance management system.

Project Meeting Minutes – Report that will document, in parliamentary procedure format, the events of each project meeting and will be used to as a reference tool by tracking open action items and to communicate the outcome of the meetings to other in the organization.

Refer to: “Business Requirement Form” – Attachment 2and “PIT Strategic Retreat” – Attachment 3

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Executive Sponsor Signoff

Name Title Signature

Frank Murphy CEO, HealthPort

Steve Roberts COO, HealthPort

Peter Schmitt CFO, HealthPort

Gene Guertin CIO, HealthPort

Joyce Conner-Boyd

Executive Sponsor

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Professional Affiliations

References

1. Robert S. Kaplan and David P. Norton, The Strategy-Focused Organization (Boston: Harvard Business School Press, 2001

2. Robert S. Kaplan and David P. Norton, Strategic Maps- Strategic Communication (Value Based Management.net)

3. Paul Niven, Glossary of Key Performance Management Terms (Balanced Scorecard Academy Powered by QPR)

4. AuNet Center, Developing a Balanced Scorecard (BSC), Background Material & Tools, October 3, 2002

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Documents

Balanced Scorecard Project Plan