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DESIGNING BUSINESS MODEL CANVAS TRANSFORMS INTO BALANCED
SCORECARD IN THE XYZ UNIVERSITY IN INDONESIA
Rosana Mia Agusty 1)Universitas Mercu Buana, Jakarta, Indonesia
ARTICLE INFORMATION
Received: 17th^ May 2020 Revised: 24th^ June 2020 Issued: 19th^ July 2020
Corresponding author: first author E-mail: [email protected]
DOI:10. 31933 /DIJMS
Abstract: Business Model Canvas becomes a company performance appraisal. BMC is widely used for initial design of business process. In this research, the author is focusing on analyzing business process in XYZ University, one of the largest well known universities in Indonesia. Through the business process, translated onto BMC to see wider view from the beginning to the end of the process. The BMC and then transforms into 4 areas of Balanced Scorecard to see percentage of 4 areas of the business process. Type of data is primary, by observing and interviewing some employees, students, and alumni, and secondary by searching information through social media. The methods is Business Model Canvas and Balanced Scorecard. The result is by including some inputs, business process of XYZ University confirms that the university will survive in long term and has good capacity to remain as one of the high rank universities in Indonesia.
Keywords : Business Model Canvas, Balanced Scorecard, Business Process.
INTRODUCTION
Economic growth is the objective that all countries are trying to achieve. One of the most important factors effecting the economic growth is the capability of human resource that developed through informal training and also formal education. Economic growth will increase significantly by having qualified human resources in the companies.
On 2018 Indonesia government had commitment to support education in Indonesia by allocating major investment on strengthening human resource in Indonesia. Government budget for education achieves 444 billion rupiahs or equals to 20% of total Government Budget that year. Over 250 million population in Indonesia, 60% are young productive people that we can say as bonus of demographic condition of Indonesia. Nowadays, people are more aware of the important of education to improve their quality of life and overall it will lead to increase the economic growth in the country if improvement could be done in massif way. Statistic data by BPS Indonesia shows, with huge population of productive people the number of young people registered to study at university is increasing each year. Given the situation, opportunity of doing business in the education industry in Indonesia become wider. Thus also creating competition between universities to give better service, higher standard of quality, and creating transformational future leaders. On this research, the writer will focus on analyzing business process in XYZ University, one of graduate universities in Indonesia, to be formed business process into 9 areas of Business Model Canvas and then integrated to Balanced Scorecard methods. The goal of this research is to show the existing business process and to give deeper understanding about how the business process should be delivered in order to achieve vision, mission, and value of the institution. This XYZ University is applying linier connection between vision, mission, and objectives in all units, the main business in academic area and supporting units.
The Mission: Enriched by our vibrant international network but rooted in local wisdom, we develop strategic business leaders with integrity, creativity, and knowledge needed to serve society The Vision: To be the leading graduate business school in Indonesia in advancing knowledge of business and promoting sustainable and ethical business practices by rising to the international challenges Values: Integrity, Professionalism, Objective, Academic fairness, Social concern
LITERATURE REVIEW
Management Strategy According to David (2011:5) definition of strategic management is an art and knowledge in the same time to create, implement, and evaluate the decisions towards division to achieve company’s objectives. Aime Heene and Sebastian (2010:9-10) defined that strategic management is a unit process in the company that continuously creating value and capability to deliver and widening its contribution to the stake holders or other parties involved. According to them, there are 5 fungtion of strategic management:
BSC can provide information about the company as a whole when viewing company objectives. BSC model is used by a company to implement strategy mapping to see where value is added within an organization as well as to develop strategic goals and strategic objectives.
Vision
Mission
Strategy
Transformation Business Model Canvas to Balanced Scorecard
Financial Strategic
Financial (^) Revenue Stream Cost Structure
Customer
Internal Process
Learning and Growth (^) Key Resource Cost Structure
Value Proposition
Customer Relationship
Key Activities Channels Cost Structure Key Partners
Picture 1. Transformation Business Model Canvas to Balanced Scorecard
Characteristics of the Balanced Scorecard Model There are 4 (four) information is collected and analyzed from four aspects of a business:
1. Learning and growth Will be analyzed through the investigation of training and knowledge resources. This step is to identify how well information is captured and how effectively employees use the information to create a competitive advantage over the industry. 2. Business processes Will be evaluated by investigating how well products are created. In thie step, operational management is analyzed to find out if there are any gaps, delays, bottlenecks, or waste. 3. Customer perspectives Will be collected to measure customer satisfaction towards quality, price, and availability of services provided. Customers will provide feedback about their satisfaction with current services. 4. Financial data This leg is providing data of sales, expenditures, and income to understand financial performance. These may include the amounts of income, financial ratios, budget variances, or income targets. The balanced scorecard is often referred as a management tool rather than a measurement tool.
Transforming BMC to BSC In order to integrating Business Model Canvas, this research is developing concept that created by Richardson (2014) that showing a picture and direction of translating BMC to BSC.
RESEARCH METHODS This research is using Business Model Canvas and Balanced Scorecard, The Business Model Canvas is commonly used as an exercise for creating business model in XYZ University and also leading XYZ University business strategic to a transformation. How the process business in the company will be drawn onto a canvas that consists of nine building blocks. Those 9 blocks are Customer Segments (CS), Value Propositions (V), Channels (CH), Customer Relationships (CR), Revenue Streams (RS), Key Resources (KR), Key Activities (KA), Key Partnerships (KP), and Cost Structure (CS). These nine blocks then divided into four areas, those are customers, the offer, infrastructure, and financial viability of the business itself. Business model is the translation of business plan that the institution has, beside business model is more reactive through this model, we could see the helicopter view of the
Picture 2: Business Model Canvas blocks
FINDINGS AND DISCUSSION
A. Existing Business Proses in XYZ University XYZ University doesn’t have issue regarding financial budgeting. Inflow of the capital structure comes from two resources, those are tuition fee and investment fee of participants that join the training program and also professional certification program. As one of the largest university in Indonesia, and also to be one of favorite universities that already achieved International Accreditation, to invite students to take graduate school in XYZ University is not an underlined priority. The number of students registered increasing each year and not showing the elasticity of increasing tuition fee.
B. Business Model Canvas Through collecting data, analysis data by observing and interviewing some of employees, key persons in the institution, students, and alumni, the Business Model Canvas that could be drawn is as follow.
Industrial linkages
Partner institutions
Partner universities abroad
Admission activities International Program Academic learning process
Credible and high quality of faculties, which strong in research and development, updated curriculum strengthen by conducting discussion,
Personal service Study Plan Consulting Day by day updated academic information
Alumni of undergraduate program in Indonesia Young executives Expatriates in
Key Partners Key Activities^ Value Proposition Customer Relationship (^) Customer Segment
Regulator
Associations
Alumni
Non Degree Program activities Alumni Networking
case study and presentation in class, International class conducted in English and over 40 International accredited partner universities all around the world, and enormous variety of training programs.
Companies in Indonesia Professional degree seeking
Admission, Executive Development, and International relations Academic and Alumni Affairs
Direct marketing Partnerships Industrial Linkages
Efficiency in transportation and accommodation cost for faculties
Optimum tuition fee and training program investment toward service excellent
Paperless and internal integrated system
Student tuition fee Executive Development Project
Picture 3. Business Model Canvas university services
C. Value Propositions VP that are given to the customers have already meet the needs of the standard service as graduate school might give to its customers. Strong knowledge of the faculties especially in the research and development activities put the XYZ University on the top of University rank in Indonesia in term of research and development. This achievement is proven by receiving funding from the government for many research projects leads by XYZ University faculties member. This also guarantee that the students will get the best education when registered as active student in XYZ University. Another Value Proposition is International program cooperation with more than 40 universities abroad giving opportunities for the students to explore knowledge to Universities abroad through the programs offered by them. XYZ Value that becoming uniqueness of XYZ University is industrial linkages to create many varieties of training program as well as certification program. Those values still become the competitive advantage for XYZ University in competing with other universities in Indonesia.
D. Customer Segments The potential customers of XYZ University are alumni of undergraduate students that are willing to continue their study to master degree, they can join regular class that are conducted on Monday to Thursday from 9 am to 4.30 pm, young executives to join executive class which has 2 options, Monday to Thursday evening class (executive A), or Friday evening and Saturday whole day (executive B). The students who are taking this type of class, should have minimum of 1 year working experience and 3 years minimum of working experience for executive B students. Other value that has been a uniqueness of XYZ
Key Resources Channels
Cost Structure Revenue Stream
Key resources is the critical unit for XYZ University to create value. In this area, XYZ University has an unsolved issue of getting employees prospective to be future leaders. The capability of employees is under capacity to be able to give service excellent to the graduate students with have high standard of expectation level. XYZ University should have employee development program, talent management, and employee performance appraisal tools to upgrade the quality of services.
I. Key Partners XYZ University already has strong partners to support program. Industrial linkages, partner institution, partner universities abroad, regulator, associations, and alumni are what universities required to be able to survive and become the best university in Indonesia, in high quality standard and deliver high quality graduates to participate in the economic growth of the country.
J. Key Activities Key activities of XYZ University business process are in the area of academic activities. Start from admission activities that receiving new students, entering learning process in XYZ University, non degree program, and alumni contribution to the university. The supporting units in XYZ University have to work together side by side to make sure that all support needed to run the core business has no obstacle and together all units will achieve the vision, mission, and goals of the institution.
K. Cost Structure Cost expenditure managed by finance division in XYZ University. The major expenditure are to provide transportation between cities by airplane and accommodation for the faculties. Expenditure efficiency also come from paperless program by applying internal integrated system in all involved units in the business process. Employee development is focusing on improving service excellent by giving two days training every year for the employees. The suggestion is to give knowledge to the employees not only service excellent topic but also give the employees capability of making decision, project management knowledge, and entrepreneurship mindset.
Industrial linkages
Partner institutions
Partner universities abroad
Regulator
Associations
Alumni
Admission activities International Program Academic learning process Training Program Alumni Networking
Credible and high quality of faculties, which strong in research and development, updated curriculum strengthen by conducting discussion, case study and presentation in class, International class conducted in English and over 40 International accredited partner universities all around the world, and enormous variety of training programs.
Personal service Study Plan Consulting Day by day updated academic information
Alumni of undergraduate program in Indonesia Young executives Expatriates in Companies in Indonesia Professional degree seeking
Admission, Executive Development, and International relations Academic and Alumni Affairs
Direct marketing Partnerships Industrial Linkages
Efficiency in transportation and accommodation cost for faculties
Optimum tuition fee and training program investment toward service excellent
Paperless and internal integrated system
Student tuition fee Executive Development Project
Picture 4. Business Model Canvas University Services with Suggestion
L. The transformation to Balance Scorecard Balanced Scorecard picture is the result of analyzing existing condition that already shown to the XYZ University, so that the measurement could show the real picture of balancing business process in the university.
Key Partners Key Activities (^) Value Proposition Customer Relationship Customer Segment
Key Resources Channels
Cost Structure Revenue Stream
Practitioners Overseas students
Birthday greetings Information about smart daily life
Dormitory for incoming students Stationaries
Employee Development Program Talent Management Employee performance appraisal
Support from all units to Academic Activities
Investment in upgrading employee knowledge
develop the program and to get many students. Awareness of people in Indonesia to study in master degree program is a challenge for XYZ University to deliver high quality standard of education to meet the needs of high level expectation of services from potential students. The business process in XYZ University translated to Business Model Canvas and giving wider view of the business process from the very beginning to the last step of the process. Transformation of the Business Model Canvas to Balanced Scorecard has be done and finding that there are 12 Strategy Objective for 4 areas of Balanced Scorecard. Business process in XYZ University is confirming that the university will be able to survive in long term and has good capacity to remain as one of the high rank universities in Indonesia. XYZ University also has capability to achieve the vision, mission, and objective of the institution as long as XYZ University could maintain the existing achievement and run the business by doing continuously improvement.
SUGGESTION Business Model Canvas giving the picture of all the business process in XYZ University. The suggestion appears to complete the process, could give input for XYZ University to include the suggestions in the next concept of business process. XYZ University could add practitioners that need upgrade knowledge for their professional work as one of potential customers. Overseas students that are willing to study in attractive emerging market could be potential. Creating bounding to be more effective is to give birthday greetings to the students according to their date of birth data. Other way to increase the bounding is to give information through email about the smart way of dealing with current details in daily activities, such as how to do basic yoga to avoid stress in working environment while accomplish study commitment. Improvement in the revenue income could be building the housing or dormitory for the incoming exchange students, as well as coming faculties from main campus in other city in Indonesia. XYZ University should have employee development program, talent management, and employee performance appraisal tools to upgrade the quality of services. The supporting units in XYZ University have to work together side by side to make sure that all support needed to run the core business has no obstacle and together all units will achieve the vision, mission, and goals of the institution. Enhancing knowledge to the employees is not only service excellent topic but also give the employee capability of making decision, project management knowledge, and entrepreneurship mindset.
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