Internal-Business-Process Perspective of BSC

To satisfy customer needs and to achieve better competitive advantages, many firms have concentrated their efforts on the improvement of internal business process. Denton and White (2000) state that the improvement of internal business process is most critical for achieving customer and ownership objectives. It is believed that internal activities affect the company’s long term performance, ranging from training and services to community environment.

Olve, Roy and Wetter (2000) contend that in order to create the value for customers and fulfill the expectations of shareholders, the companies need to identify its process at all levels. This means that the company needs to involve in all process for delivering its products and services. Based on Porter (1985), internal business process including primary and supporting activities should be clearly identified to create competitive advantages for the company and value for the customers. The identification of internal business process often includes the commitment of resources and capabilities, which the company needs to upgrade.

Denton and White (2000) suggest that the number of internal process measurement, including associate-productivity rates, service errors and failure rate, brand recognition, maintenance of physical assets, capital-expenditure efficiency, accounting and internal-control practices, life-safety and ADA compliance, cross-selling, quality of market share and profitability by segment and time required to complete key processes and task (e.g., check-in, maintenance calls, breakfast seating and servicing).

Recent scholars on SCM have recommended that collaborations between suppliers and manufacturers are very critical to create value for the customers. It is argued that in collaborating to create values for customers, we must cultivate relationships in several directions simultaneously. Thus, firms should emphasize not only internal focus but also external focus to improve internal business process.

As summary, previous studies have generated some management variables for measuring the internal business process perspective of BSC, most of these studies are related to efforts that a company could be done to improve internal business process.