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Balanced Scorecard

The Balanced Scorecard is a strategic planning and management system that aligns business activities with an organization's vision. It uses four perspectives - financial, internal business processes, learning and growth, and customer - to measure performance. An organization first defines its mission and strategic plan before implementing specific, measurable metrics in each perspective and monitoring progress towards goals. The Balanced Scorecard aims to improve processes, employee development, systems, progress tracking, customer satisfaction, and financial performance.

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40 views2 pages

Balanced Scorecard

The Balanced Scorecard is a strategic planning and management system that aligns business activities with an organization's vision. It uses four perspectives - financial, internal business processes, learning and growth, and customer - to measure performance. An organization first defines its mission and strategic plan before implementing specific, measurable metrics in each perspective and monitoring progress towards goals. The Balanced Scorecard aims to improve processes, employee development, systems, progress tracking, customer satisfaction, and financial performance.

Uploaded by

Nichelle CAL
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Balanced Scorecard

'A strategic planning and management system used to align business activities to the vision
statement of an organization'

To embark on the Balanced Scorecard path an organization first must know (and understand) the
following:
 The company's mission statement
 The company's strategic plan/vision

A Balanced Scorecard approach generally has four perspectives:


1. Financial
2. Internal business processes
3. Learning & Growth (human focus, or learning and development)
4. Customer
Each of the four perspectives is inter-dependent - improvement in just one area is not necessarily
a recipe for success in the other areas.

Example Factors
Department Areas
Finance Return On Investment
Cash Flow
Return on Capital Employed
Financial Results (Quarterly/Yearly)
Internal Business Processes Number of activities per function
Duplicate activities across functions
Process alignment (is the right process in the right department?)
Process bottlenecks
Process automation
Learning & Growth Is there the correct level of expertise for the job?
Employee turnover
Job satisfaction
Training/Learning opportunities
Customer Delivery performance to customer
Quality performance for customer
Customer satisfaction rate
Customer percentage of market
Customer retention rate

Once an organization has analysed the specific and quantifiable results of the above, they should
be ready to utilise the Balanced Scorecard approach to improve the areas where they are deficient.

The metrics set up also must be SMART (commonly, Specific, Measurable, Achievable, Realistic
and Timely) - you cannot improve on what you can't measure! Metrics must also be aligned with the
company's strategic plan.

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Balanced Scorecard

Implementation

Implementing the Balanced Scorecard system company-wide should be the key to the successful
realisation of the strategic plan/vision.

A Balanced Scorecard should result in:

 Improved processes
 Motivated/educated employees
 Enhanced information systems
 Monitored progress
 Greater customer satisfaction
 Increased financial usage

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