Danish Mortgage Credit Company Enhances Balanced Scorecard with SAS®

BRFkredit is an independent Danish mortgage credit institute that offers financial solutions and services to real property customers. BRFkredit chose the SAS Strategic Performance Management solution to update and link balanced scorecard and human resources, with the goal of delivering specific information to management and staff to improve organizational functions.

The company developed its first balanced scorecard in 1995 as a pilot project in collaboration with SAS. At that time the balanced scorecard focused directly on sales and sales channels, while later initiatives added the monitoring of customer satisfaction. Now, as part of its modernization drive and in order to update the balanced scorecard and link it to the human resource strategy, BRFkredit has chosen to use the SAS Strategic Performance Management solution to give employees access to all information stored in the company's scorecard via an Internet browser.

"Right now our challenge is to create a better balance in our scorecards with more objectives from the learning and growth perspectives, as well as to transform our strategy into benchmarking that can form part of the employees' personal scorecards," says Tim Thranegaard, Senior Vice President at BRFkredit, and the architect behind BRFkredit's balanced scorecard. The development of the scorecard reflects the fact that the third largest mortgage credit institute in Denmark also relies on soft values.

Measuring Human Factors
"Soft values are more than just customer and employee satisfaction – they also include management quality. Basically speaking, we are a knowledge company, and if we are to meet our economic targets, it is essential that we have both management and employee competency. We need to be able to measure these human factors," says Sven Blomberg, Managing Director at BRFkredit.

"The challenge is to create coherence between the overall objectives," continues Blomberg. "Originally we developed a rather simple balanced scorecard, which focused on key economic figures such as market share and products, and which made it possible to follow up on hard objectives and deviations. We have gradually integrated information into the scorecard about production, productivity and customer satisfaction. The next step is to get a description of overall employee satisfaction. Our objective is to create personal balanced scorecards for all employees in our company."

Blomberg does not conceal the fact that developing a balanced scorecard is a long process, and that it is particularly difficult to gather the right data about human factors and other non-financial measures that need to be included in the balanced scorecard. Currently, 150 upper and middle managers use the balanced scorecard, but the objective is that it will be expanded so that all employees will use it.

Sven Blomberg, managing director at BRFkredit

"Another challenge is to create a connection between the primary targets – our key performance indicators – and, for example, an employee in the mail room," says Blomberg. "Mail room workers need to be aware that fulfilling their personal goals and fulfilling the company's primary goals are related. Their own balanced scorecard is part of the company's overall scorecard."

Changing Behavior
"After several years of experience, we know that it is crucial for top management to support the balanced scorecard, to understand the key figures from top to bottom and to be willing to act on the information in the system," says Thranegaard. "Furthermore, it is important to understand that a balanced scorecard is a process that takes time and which, in principle, never ends."

Thranegaard feels that BRFkredit's experiences with the implementation of their balanced scorecard show that it is important to create a sense of openness about the results in the scorecard, and to use the results as a starting point for a discussion on the company's objectives and how to attain their goals.

"Fundamentally, a balanced scorecard is simply common sense in a system," explains Thranegaard. "Our SAS balanced scorecard illustrates causal relationships, and therefore it is easier for us to implement changes. Now, we don't have to search high and low for the answers to the most interesting questions. The balanced scorecard brings about behavioral changes within the organization. All employees now know that management actively follows their development in a number of key areas, and that creates a spotlight on the right areas for personal achievement. Everyone wants to do as well as possible."

A Perfect Balance
"The balanced scorecard plays an important role in the company and in my working day," enthuses Blomberg. "When I turn on my computer in the morning, our scorecard is the first thing I see. It gives me a quick, up-to date view of our business. If I discover any deviations in the key figures I contact the person responsible for the specific area. Thanks to SAS, we now have the necessary overview of the company, which puts us in a position where we can initiate changes and thus maintain our competitiveness.

"Before using the SAS Strategic Performance Management solution, I wasted a lot of time discussing the interpretation of the data and results, and therefore I found it difficult to use the information for management purposes," Blomberg concludes. "I used to receive management information in hard copy, and the information was far less timely, focused and structured than it is today. Now I'm able to react faster, because the information is beyond dispute and is ideal for management tasks."

With SAS, BRFkredit uses its modernized balanced scorecard to include more soft values, concentrate management information and create a connection with their overall business and human resource strategies.

The Danish Mortgage Credit System
The purpose of the Danish mortgage credit system is to handle long-term financing of real property using a mortgage credit institute as an intermediary. The individual mortgage deed is delivered to the mortgage credit institute where it forms the basis for property bond issuance. The bondholder, not a particular debtor, has a claim on the mortgage credit institute, and the debtor does not enter into legal matters with a single bondholder but with the mortgage credit institute. Thus bondholders obtain a more secure investment and borrowers get cheaper financing.

About BRFkredit
BRFkredit is an independent mortgage credit institute that offers financial solutions and other services to real property customers. BRFkredit was founded on the merger between Denmark's first mortgage credit institute, Kreditkassen for Husejere I Kjøbenhavn (Danish Building Society for House Owners in Copenhagen) which was founded in 1795, and the far younger Byggeriets Realkreditfond (Mortgage Credit Fund of the Danish Building Industry). Today BRFkredit has 545 employees, mortgage lending of DKK135 billion (€18 billion) and a market share of 9.6 percent. The majority of BRFkredit's business activities are conducted through the Danish real property agent chain, EDC-mæglerne.

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