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.
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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
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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.
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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.
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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.
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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.
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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
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