Keeping score Featured

7:00pm EDT January 30, 2003
Parker Hannifin's manufacturing capabilities span 111 divisions in 45 countries, which presents a unique challenge: How do you measure success?

The answer was to institute the Kaplan & Norton's balanced scorecard model companywide, using readily available software. The scorecard system uses metrics that account for customer measures, financial measures, internal measures and innovation and growth measures.

"The e-business solution we developed uses a plethora of technologies integrated together to gather the data that we didn't already have, consolidate the data into meaningful comparisons and report the information in a flexible manner," says David Armbruster, manager of information management at Parker Hannifin.

To capture the nonfinancial data, Parker instituted a Web page data collection form and placed it on the company's intranet. Any user in any of the 45 countries can use this form to enter requested information.

"At any time, users can simply click on one of the input items to get a full-page definition of what we are looking for," says Armbruster. "This is an important feature when you are dealing with so many currencies, customs, cultures and laws."

Once the data is entered, it is stored in a nonproprietary database. At that point, all the data is translated into U.S. dollars, some smaller locations are combined into a larger divisional scorecard, a consolidated scorecard for each of Parker's 13 groups is created using the numbers from each group's various divisions and all the scorecard data is saved in easy-access databases.

All the calculations are done in Microsoft Excel.

"The reporting side of this whole process is the key feature," says Armbruster. "Every single report is an Excel template that is stored on a Web server. We broke free from expensive hard coding of formulas. Now, when we need to make changes, we simply change the Excel template, resave it and we are done. It doesn't take any programmers to do that."

When a report is requested, the data that matches the report is extracted from the database, then pushed into the appropriate Excel template that is launched on the user's computer.

"Breaking free from the complex programming has allowed us to make on-the-fly changes to any aspect of this project in a matter of mere minutes in most cases," says Armbruster. "Having Excel make the calculations on the client side has proved to be a huge mainframe resource saver, and users get easy-to-understand reports in a format they are used to. When upper management request graphs, we simply build them into Excel in a matter of minutes."

These scorecards bring visibility to the management strategies and measure their success. It helps keep division leaders focused on goals, and will eventually be tied into a bonus compensation program. How to reach: Parker Hannifin, (216) 896-3000