Balanced scorecard in Vietnam vocational institutions in the 4.0th industrial revolution

n trÞ - Kinh nghiÖm quèc tÕ vµ thùc tr¹ng ë ViÖt Nam 39 BALANCED SCORECARD IN VIETNAM VOCATIONAL INSTITUTIONS IN THE 4.0TH INDUSTRIAL REVOLUTION #Dr. To Thi Ngoc Lan* - Dr. Pham Hai Hung* * Lecturer of University of Social and Labour Affairs (ULSA) Abstract: Thanks to the current impact of the 4.0th Industrial Revolution, the role of information technology (IT) is altered from supporting production factors in the process of value creation to directly adding value to organizations and enterprises as an input factor. Should the implementation of IT in VTE schools be processed, new values will be brought to BSC perspectives due to IT’s economic merits. In the balanced scorecard (BSC) model, information economics theory is extended into a set of constructs understandable and immediately usable throughout the vocational schools in Vietnam. This study discusses the use of the balanced scorecard in performance assessment as well as IT integration into the institutions as a whole. Key words: BSC; IT;MbO; IT-BSC; Vietnam; Vocational Institutions; training; education; performance management; strategy; school. 1. Introduction 1.1 Impacts of information technology on VTE Technology-driven management is challenging to a number of Vietnamese education institution managers. The availability of information technology in these schools nowadays has evident effects on their management system. As a result of the 4.0th Industrial Revolution, the majority of work is performed on computers, electronically connected to stakeholders, colleagues around the world. In addition, rather than competing as independent entities, education institutions are becoming enmeshed in electronic networks. Presently, more and more of activities of the schools are processed digitally through networks instead of physically. E-learning, e-managing are also intensively applied in some educational institutions with successful results. The use of end-to-end digital supply-chain networks to maintain connection with learners, stakeholders, coordinator and enterprises are now approached in vocational institutions. These advances of information technology (IT) require vocational school leaders to be technologically literate, to be able to manage a relationship web far beyond the boundaries of the physical campuses, and to build flexible e-links between institutional managers, employees, learners, partners and stakeholders. With the emergence of the 4.0th Industrial Revolution, the boundaries of the physical life, regarding digitalization and bio-logicalization, production and environment, training and education are being crossed. The 4.0th Industrial Revolution has a widespread application and the speed of that application is changing every industry in every country. The breadth and depth of these changes create the variability of the entire production, management and administration systems. Social life will be strongly affected with the advances of technology in areas such as artificial intelligence, robotics, Internet, 3D printing, nanotechnology, biotechnology, materials science, energy storage and quantum computing. In the 4.0th n trÞ - Kinh nghiÖm quèc tÕ vµ thùc tr¹ng ë ViÖt Nam 40 industrial revolution, the impact on the system of vocational education will be more strong and comprehensive. Thus, the need for continuous training disciplines’ adjustment and update is clear when boundaries between industries are vaguely delineated. All fields, especially those related to human-machine interactions (Ex, virtual assistants, virtual assistants, virtual clerks) will then be connected. The concept of virtual classrooms, virtual teachers, virtual devices will soon become a trend in vocational training. 1.2 Challenges of VTE in the digital age The 4.0th Industrial Revolution is basically a transition from digital revolution (machine) to the revolution of creativity (integration of technologies) called AI (artificial intelligence). It is the simulation of human intelligence processes done by machines, especially computer systems. These processes include learning (information and rule attainment and information usage), reasoning (using the rules to approach or reach conclusions) and self-correction. Particular applications of AI are expert systems, speech recognition and machine vision. This revolution is bound to have organizations change their view of management. New products and services with new supply methods in terms of order, payment, delivery, etc. are being created by new physical devices and virtual devices. On the other hand, the 4.0th Industrial Revolution contributes to increasingly intense competition within organizations between wealth and human resource instead of financial capital. Technology becomes the input factor of the production. In this revolution, the high quality labor market will be seriously challenged by the balance between supply quality and demand as well as the labor structure. As AI already replaces human in many areas of the economy, workers are obligated to adapt quickly to changes in production, otherwise they will be subject to redundancy or discharge. Obviously, with the appearance of robots, the number of employees will be greatly reduced in certain areas. As a result, larger demand for retraining and higher unemployment rates will be inevitable. A number of current job positions will be removed and replaced by new ones. Both local and international labor market will be highly polarized between low skilled labor and high skilled labor. Many researchers have pointed out that the 4.0 revolution not only threatens the employment of junior level workers, but even middle-level workers, who graduate from vocational schools. They are not equipped with new skills and innovative skills needed in the economy 4.0. The changes in production and labor force structures of future labor market set a number of issues for the governance of education institutions, which are: Firstly, demand of the labor market satisfaction: To meet the demand of high quality human resources and diversified industries in sectors of economy 4.0, vocational schools need to make drastic changes in both training and administrating. “Products” created should be future workers who are capable of working in a competitive environment. In fact, while the 4.0th industrial revolution has made profound impacts on the labor market, the vocational institutions, which provide almost all technical resources for the economy, are still using previous training methods. Their graduated students may not be appreciated by the 4.0 economy, hence may be easily replaced by robots in the near future. n trÞ - Kinh nghiÖm quèc tÕ vµ thùc tr¹ng ë ViÖt Nam 41 Secondly, the change of school governance: Virtual training, simulation training, digitization of the lecture will be the trend of vocational training in the future. Consequently, the responsibility of managers, staff and teachers in educational institutions will be affected. They have to be highly professional and innovative. They also have to adapt modern training methods with intensive application of IT. This leads to changes in the quantity and structure of teachers’ qualification and skills. Thirdly, the innovation of the administrating model in vocational schools: The model should be transformed into “what the market needs” with a strategic goal of only training “what the market will need”. According to this new model, the most important perspectives is the linkage between the vocational institutions and the labor market and enterprises. Another approach is to establish training institutions within an enterprise to share the resources of facilities, finance and human resources. More importantly, the time for transferring from knowledge and skills into practical work will be shortened. In Vietnam, however, the relationship between school and business or linkage between training and using trained human resources are still tenuous. Vocational institutions and enterprises have not yet realized their “social responsibilities”. Fourthly, management reform in both governmental agencies and vocational schools: The emergence of virtual classes, virtual professions, virtual programs requires a general management policy to satisfy the desired training quality and diverse demands of the economy and competition. However, this is still a matter to both high-level management and vocational institutions, as the legal system is being supplemented and finalized. Besides, concerning governmental management, the inconsistencies between the functions of governmental agencies and the autonomy rights of school administration are constraints. On the basis of the above mentioned issues, to improve the quality of vocational training and to meet the requirements of the economy, Vietnam should develop an appropriate administrative model which is flexible and effective in goal management and is able to integrate with information technology achievements in the industrial revolution 4.0. 2. Current situation of VTE institution governance 2.1 Application level between education and business governance comparison Features of Vocational institutions and the prevailing system performance management A vocational institution is a community dedicated to the pursuit and dissemination of knowledge. It has important role in education, value creation and society development. These institutions possess unique features which distinguish them from other business entities. Thus, the implementation of performance management systems, though applicable in case of business houses, becomes difficult to them. By nature, vocational institutions are not amenable to the constraints required of sound management and budget control due to these following features: • In vocational institutions, many managers are “free spirits” who is not compliant with the authoritarian governance structures found in business organizations. Intrinsic, rather than monetary value is regarded as their scholarly purpose. They are often apprehensive of practices that involve measurable outcome accountability. n trÞ - Kinh nghiÖm quèc tÕ vµ thùc tr¹ng ë ViÖt Nam 42 Linkages between the costs and benefits of their training or researching activities receive insignificant consideration. • Contrary to most businesses, key decisions regarding cost are made by teachers and administrators owning the lower positions of the hierarchy, rather than the upper ones. Examples include decisions relating to: Courses offerings; Numbers of sections of a course to be scheduled; New training programs, specific discipline or across disciplines; Research projects. • The financial reporting activities of Vocational institutions are as per “Fund Accounting System”, whose purpose is to follow the ordinary procedures rather than to provide inputs for managerial decision making. This procedure is respected by relatively all vocational institutions as they receive major funds from Government budget sources which are restricted to particular utilization purposes. • Accordingly, the budgets prepared by the vocational institutions are as per the “Fund Accounting system” and are not ruled by any strategic plan. In vocational institutions, considerable time and resources are spent on developing a complex financial process, yet it is actually not supporting their management and control system. • Vocational institutions lack proper objectives or vision and measurable outcomes. The quality of their main “products”, which are teaching, research service, is the only criteria, which is highly subjective in nature and is difficult to measure. The concentrated perspectives of training and education plans are usually financial operations, budgets, faculty resource distributions and funding strategies, and consideration of above features, with the goal of effective performance management. The vocational training process which form the basis of performance measures, however, should have noticed the crucial outside perspectives of customers (learners) and stakeholders as well as perspectives of performance that are meaningful to them such as time, cost and service quality. The individual performance objectives and performance evaluation processes of VTE institutions are difficult to connect. Because of traditional models like the current financial process in vocational institutions, school managers are faced with tight constraints when reaching out of the units or departments under their authority within the institution. As a result, it will be more difficult to direct the management function including expenditure justification, record of progress to approach determined goals, strength and weakness identification, assessment of the current organizational status, and institutional improvement orientation. Similar to enterprises, vocational institutions are limited in predictive power. In other words, in-time alerting to changes is rarely found and little consideration to perspectives that are important but hardly quantifiable is given. Thus, vocational institutions should now be acknowledged that they can benefit substantially from various innovative business practices through comprehensive performance structures, which will enable them to: Focus on the future and all stakeholders; Establish strategic goals and performance objectives; and continuously track progress in achieving these goals through a meaningful set of performance metrics. n trÞ - Kinh nghiÖm quèc tÕ vµ thùc tr¹ng ë ViÖt Nam 43 Business and VTE institution comparison It is noticeable that in a buyer market, products and services of an organization need constantly innovating for the organization to remain continuously competitive. For this, the vocational institutions need to develop a good measurement cum-management system that establishes a linkage between performance measures and institutional vision and strategies. It is essential to understand that internal efficiency, customer satisfaction gained with training and researching service quality, and productivity are fundamental factors to succeed. On the basis of literature reviews and two research of Archana Patro (2016) and Demetrius Karathanos & Patricia Karathanos (2003), we make a comparison between measures for education and business: Figure 1: Comparison of Education and Business Education and Training Institutions 1. Student learning results: Results originated from diverse assessment methods, reflecting mission and developing goals of a vocational institution, and importantly representing evaluation of student learning process. 2. Student and stakeholder focused results Satisfaction of students and stakeholders on particular educational courses and services, delivery, communication, and transactions that affect students’ development and stakeholders’ future actions. 3. Budgetary, financial, and market results These results are costs per student, tuition and fee level for lectures and general governance, costs per academic course, resources for education from Government budget and other areas. 4. Teacher and staff results: Innovation and suggestion rates; courses or educational programs achieved; learning; improvements of performance at work; mutual training rates; cooperation and teamwork; sharing of knowledge and skills across job positions and locations; satisfaction, and dissatisfaction. 5. Organizational effectiveness results, including key measures of operation performance Ability to improve student performance, student development and education climate, indicators of actions taken to satisfy student, stakeholder, or partner needs, key measures or indicators of strategy and action plans’ achievement. 6. Governance and social responsibility Results of fiscal accountability internally and externally; measures or indicators of moral behavior and of stakeholder trust in the organization’s administration; regulatory and legal compliance. Business 1. Customer focused results Satisfaction of customer on particular features of products and services, delivery, relationships, and transactions that affect customers' future actions. 2. Product and service results Key measures or indicators of products and services from the perspective of the customers 3. Financial and market results Return on investments, assets, operating margins, profitability, liquidity, added value per employee 4. Human resource results Innovation and suggestion rates; courses achieved; learning; improvements of performance at work; mutual training rates; cooperation and teamwork; sharing of knowledge and skills across job positions and locations; satisfaction, and dissatisfaction. 5. Enterprise effectiveness results, including key internal operations performance measures Productivity, cycle time, performance of partners, key measures or indicators of strategy and action plans’ achievement 6. Governance and social responsibility Results of fiscal accountability internally and externally; measures or indicators of moral behavior and of stakeholder trust in the organization’s administration; regulatory and legal compliance. n trÞ - Kinh nghiÖm quèc tÕ vµ thùc tr¹ng ë ViÖt Nam 44 2.2 VTE governance innovation, application of IT to governance Proposal on general innovation Firstly, it is necessary that the management mechanism and the management structure in the education system are improved, so that functions, tasks and powers will be clearly defined, responsibility of each employee and each faculty or department will be connected. VTE institutions should move toward complete autonomy in all administrative activities; Secondly, the vocational institutions should use software in governance like reforming the system of information receiving and processing in training management. VTE institutions should set up data integration center and create databases sharing system inside the institution and with other national educational institutions. Besides, IT infrastructure in the holistic VTE system should be modernized to ensure effective management and operation of vocational institutions with the application of IT in teaching and learning activity management. Proposed model based on criteria and standards of VTE assessment VTE institutions should their current isolated and passive operations, as they are under strict supervision of the government, society and business, who are direct users of education practices. VTE institutions will be evaluated on many perspectives such as quality of teachers, quality and quantity of courses and quality of research outcomes and graduated students. The basic criteria and standards for this evaluation have been created and widely applied inside and outside Vietnam, with 8 criteria in case of VTE centers and 9 criteria in case of vocational intermediate colleges,4 including: Objective, mission, institution, administration; Education; Teachers, administrative officers, staff; Programs, courses; Facilities, educational equipment and library; Scientific research, technology transfer and international cooperation; Financial management; Learner service; Supervision, quality assessment. Accordingly, the authors put these criteria into 5 categories as in the following model: Figure 2: Model of Balanced Scorecard application in VTE Institutions 4Regulations of Circular No. 15/2017/TT-BLDTBXH dated June 08, 2017 of MOLISA on the criteria and standards of vocational education quality evaluation n trÞ - Ki