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Introduction

This report tells about Suncorp Group. The first heading is about the overview of the company which discuss the overview of the company, its functions, and its history. Secondly, the report introduces the idea of the Balanced Scorecard model which is used in Management Accounting. Lastly, the balanced scorecard will be implemented on Suncorp Group.

Suncorp Group Limited

Suncorp group limited is one of the financial services business which has the headquarter in Brisbane Australia. It’s involved in insurance, finance, and banking services. It is Australia’s one of the mid-size banks according to the combined value of commercial lending and deposits. Moreover, this known for having the largest general insurance in Australia. This company was founded when there was a merger of three companies, namely Suncorp, Metway Bank and Queensland industry development corporation, on First December 1996. During this merger, the Queensland government was the largest shareholder with a stake of 68%. Currently, this company employs over 13000 labor force and it has approximately 9 million customers in both Australia and New Zealand. The worth of this company is $96 billion according to the assets it holds, and it is the Top 50 ASX listed company (Anon., n.d). There is a history regarding Suncorp Group Limited like in 1902 Suncorp starts its operation as a Queensland’s agriculture bank by opening its first branch in the southwest of Queensland. The objective of agriculture banks was to provide loans for communities living in rural areas in order to cover the costs of agriculture activities. Its first general insurance service was started in 1916 with the name of state government insurance office. In 2007, Suncorp Group merged with the Promina group, which was also the general insurance company. Promina approved $8 billion for the merger and it was the largest merger between the financial services industry this century (Anon., 2007).

Return on investment

Suncorp Group is the financial services business, so it doesn’t invest in capital assets like plant and machinery. Actually, the Suncorp group invest in different trading and investment securities which include interest-bearing securities, certificate of deposits and other negotiable deposits, equity securities, and unit trust. Moreover, it lends loans to its customers which is its receivables so that is also part of its total assets as loans and advances. Loan and advances are the major part of total assets for Suncorp Group. The other assets of Suncorp Group are cash and cash equivalent, receivables which are due from other banks, derivatives, premium outstanding, deferred reinsurance assets and acquisition costs, and intangible assets. The total assets value is $96,235 million and this is the value for a year-end June 30, 2019. The total profit for the year-end June 30, 2019, is $228 million (Anon., 2018-2019). So now the return on investments will be calculated and it is calculated when the return (or gains) from the investment or total assets is divided by the total investment or assets (Anon., n.d). In this case, total profit will be the return that arises from investments in total assets. The return on investment will be:

(228/96,235) *100 = 0.24%

In order to check whether this return on investment is good for Suncorp Group so the ROI for the annual year 2018 will be calculated and it is as follows:

(1041/99,333) *100 = 1.05%

The return on investment for the fiscal year 2018 is better than that of 2019. It means currently Suncorp Group couldn’t able to generate a better return on its investments. The reason for the decline in ROI is the decline in the net profit for the company. The rapid decline in net profit was due to the losses arises from discontinued operations where Suncorp Group suffers a major loss on disposal from the sale of assets in discontinued operations.

Balanced Scorecard and Its features

One of the component or metrics of strategic management which evaluates the performances internal business functions of various businesses. Along with enhancing the internal business functions so that it would create good results for the external part of the business. This metric is a “Balanced scorecard”. Moreover, the balanced scorecard provides an analysis of the organization of how it is performing. In order to make good decisions, the management usually emphasizes gathering and interpreting the data which are quantitative, so data collection is a crucial part of the Balance scorecard. The balanced scorecard was first introduced by Dr. Robert Kaplan in 1992 in his published review paper. He emphasizes on the idea of including non-financial information in this Balanced scorecard. The writer also believed that a balanced scorecard helps the management to minimize a load of information by limiting the measures used as it would give managers the information of four different areas of the business. He also believed that many companies are adopting this measure because the management believes that by using this measure, they can easily need managerial objectives. The writer also wrote that the single business scorecard report brings different business agenda where it wants to be competitive like company want to become customer-focused, improving quality within business processes or company is looking for tactics which help them in long term (Kaplan & Norton, 1992).

The Balanced scorecard model includes the four main areas of the business which tell how good the conduct of the business is. These four areas of the Balanced scorecard are learning and growth within the organization, processes of the businesses, customers, and finance. These four areas are also called legs. These four areas of business are used in a balanced scorecard in order to give objectives, metric programs, and targets for the organization. Organizations can easily identify those factors that impede business performance and outline strategic changes that future scorecards will track. The balanced scorecard is useful for the companies as it can provide all the information regarding the organization which is useful and is linked to the vision or objectives of the company. This Balance scorecard helps the organization in order to implement the strategies where they can add value to the organization. The other use of a balanced scorecard for the company is to develop strategic initiatives and goals (Tarver, 2020).

The following are the four characteristics of the balanced scorecard:

Learning and growth: When the training and knowledge resources within the organization are investigated so the analysis is the learning and growth aspect of the business. This aspect of the business helps the organization to gather the information and then it checks how effectively employees use this information to make that information towards adding value to the organization.

Business process: It is the leg where it is checked how business products are manufactured. The responsibilities lie upon the operations department of an organization where its management access any gaps or delays in processes along with shortages or wastes.

Customer: According to this aspect of the business, information regarding the perspective of customers can be collected like whether they are satisfied with the quality or price of the product or services, and its availability for the customer. The customers’ feedback is vital which indicates whether they are satisfied with product/service or not.

Finance: Finance is also an essential part of the business in order to understand how the company is performing financially so the collection of financial data is vital which includes sales, expenditure or income. The measurements in finance include dollar amounts, financial ratios, budget variances, or income targets.

The following is the Balanced scorecard which also links the performance measurements:

Implementation of Balanced scorecard by Suncorp Group

Suncorp Group’s vision and mission

The vision of the Suncorp group is to create better for the customers. And this year Suncorp Group is also emphasizing the importance of creating long relationships with its customers. Basically, they want to secure a financial future with customers by empowering them. Suncorp Group’s strategy for living up to its vision is to create a competitive advantage by focusing on four main areas of business which are brilliant customer experience, digital, product innovation, and engaged people. So, their main focus is on customers, products, brands, and digital foundation which most probably fintech.

Balanced Scorecard Methodology

The Balanced scorecard of Suncorp Group is prepared for four main areas of the BSC. These four areas include strategy points which are objectives, measures, targets and initiatives.

Learning and growth

Suncorp Group always looks to revolutionize its working environment by bringing out new learning opportunities for its employees. Because it always needs an engaged and inclusive workforce that can deliver brilliant customer experiences. They always look to enhance the skillsets of their employees. Suncorp Group has three purposes for which it increases the capabilities of its employees:

Always aligned to the vision and purpose which is creating better for customers
Energized and optimistic internal environment
Always preparing its workforce for the future

Strategy for Learning and growth

Objectives:

Bringing out new programs which can help Suncorp’s employees to develop themselves for personal change like gaining knowledge or skills.
HR should focus on developing people’s capabilities to learn from on the job training or any sort of digital learning.

Measures:

For the objective, one Suncorp can bring out a program like a future-ready program for the employees.
For the second objective, the HR department can collaborate with the IT department should bring out an online learning portal where employees would learn about banking or insurance process and it has to be accessed 24/7.

Targets:

The participant in the future-ready programs should be those employees who are newly recruited so that they learn skills at the early stage of their working career.
Digital learning should emphasize on creating online courses where employees can earn certificates. Moreover, senior employees should be given the target to train the newly recruited.

Initiatives:

Future-ready program for the year 2019-2020 where workshops and off the job training should be conducted.
Combining a global digital learning platform such as Cognita and Skillsoft. This will diverse range of courses where employees can specialize and earn a certificate on it. Currently, Suncorp Group is planning such an initiative for its employees (Anon., 2020).

Internal Business Processes

Suncorp Group always looks to revolutionize its working environment by bringing out new technology so that it can connect with its customers. Currently, Suncorp Group bringing out the technology of automation, robotics, and artificial intelligence which can increase the efficiency of its workplace.

Strategy for internal business processes

Objectives:

As one of the mid-size financial institution, Suncorp Group should look to digitalized customer experiences by bringing Fintech.
Improvement in Enterprise risk management framework.

Measures:

For the first objective, Suncorp Group needs to bring out a self-servicing online portal or App where customers can communicate and easily manage their money. It will reduce the costs of communicating with customers.
Bringing out a systematic management process so that all the risks in the organization are mitigated.

Targets:

All customers should be targeted. Suncorp Group can able to provide a central place for all the customers to manage finance and to view all the insurance and banking policies.
Both the risk management department and first-line people of Suncorp which include salespeople, relationship managers, or administrators should be given the responsibility to detect every possible risk within the organization. The risk management department is not only responsible for handling risk (Serbee, et al., 2018).

Initiative:

“Suncorp mobile Banking Application” where customers can handle their bank accounts and insurance services which they purchased.
A risk optimization program should be implemented where good risks and compliance practices will be implemented.

Customer perspective

Although Suncorp Group addressed its customers issue in 2019. They actually bring out initiatives in order to deliver outcomes for its customers:

Voice of the customers: It is the platform where Suncorp Group get the insights or reviews from the customers.
Customer Guardian Network: As an insurance company Suncorp Group needs to make sure that it identifies the difficulties of the customers and then improves them.
Frontline Forum: It is also the platform where it engages with customers and gets their feedback and improve their services accordingly.
Supporting vulnerable customers: It is where customer advocate listened to the voice of vulnerable customers and then they respond to it.

Strategy for customers

Objectives:

Taking measures to reduce scams so customers would not suffer financial loss.
Creating a more innovative product for the customers which will aware them about good features of product along with competitive pricing.

Measures:

For objective 1 Suncorp Group needs to partner with researchers and people involved in investigating cybercrime. These measures have to be taken earlier because customers have been losing money due to cybercrime when they are using digital technology.
For the second objective, Suncorp Group can use the packaging strategy for its product where it can group several products together, which will attract customers, as bancassurance Suncorp Group can segmented personal insurance in the product.

Target:

For objective 1 Suncorp Group should collect the information about the customers who lose their amount due to scams and leave the work for the investigator to look at each case individually. This has to be done every year so that loss arises from scams that should be reduced.
For the objective 2 product innovator should combine commodity loan products along with the insurance. They have to differentiate their product from their competitor and then do promotion in order to attract customers.

Initiatives:

For objective 1 Suncorp Group can conduct different workshops where it can guide customer service representatives on how to communicate with the customers who bring complaints regarding scams.
For the second objective, Suncorp Group needs to do efficient promotion for its product for example all in one for the customers like if bank is offering bank products along with the insurance so that offering should be informed to the customers with effective marketing campaign.

Financial Perspective

Every year Suncorp always look to perform financially better like it initiated business improvement program where for 2 annual years Suncorp’s actual net benefits where higher than its target net benefits. However, Suncorp Group need to improve its financial performance.