Main benefits of using the balanced scorecard
Helps companies focus on what has to be done in order to create a breakthrough performance Acts as an integrating device for a variety of corporate programmes Makes strategy operational by translating it into performance measures and targets Helps break down corporate level measures so that local managers and employees can see what they need to do well if they want to improve organisational effectiveness Provides a comprehensive view that overturns the traditional idea of the organisation as a collection of isolated, independent functions and departments.
What is the balanced scorecard?
A system of corporate appraisal which looks at financial and non-financial elements from a variety of perspectives. An approach to the provision of information to management to assist strategic policy formation and achievement. It provides the user with a set of information which addresses all relevant areas of performance in an objective and unbiased fashion. A set of measures that gives top managers a fast but comprehensive view of the business. The balanced scorecard…
Allows managers to look at the business from four important perspectives. Provides a balanced picture of overall performance highlighting activities that need to be improved. Combines both qualitative and quantitative measures.
Relates assessment of performance to the choice of strategy. Includes measures of efficiency and effectiveness.
Assists business in clarifying their vision and strategies and provides a means to translate these into action.
What is the Balanced Scorecard?
the Balanced Scorecard enables organizations to bridge the gap between strategy and actions, engage a broader range of users in organizational planning, reflects the most important aspects of the business, and respond immediately to progress, feedback and changing business conditions.
the Balanced Scorecard can be a great help used as a strategic tool, a management methodology or / and a measurement system.
the Balanced Scorecard provides organizations with the ability to clarify vision and strategy and translate them into action. By focusing on future potential success it becomes a dynamic management system that is able to reinforce, implement and drive corporate strategy forward.
It provides feedback around both the internal business processes and external outcomes in order to continuously improve strategic performance and results.
The concept of the Balanced Scorecard has achieved increasing popularity in the business world. Many businesses had previously built their objectives around financial targets and goals of little relevance to a long-term strategic vision, thus typically leaving a gap between strategy development and implementation.
For this purpose the Balanced Scorecard holds four different perspectives from which a company's activity can be evaluated:
- return on investment, shareholder value
- customer satisfaction, our coorporate image?
- in what processes should we excel to succeed?
- how will we go on from lessons learned and
sustain our ability to change and improve?
By this the Balanced Scorecard provides a more 'balanced view' by looking at not just financial concerns, but also customers, internal business processes, and learning and growth. Where are we going? The vision: "We will open new markets…" How? By focusing on cost efficiency, high quality and by investing in new technologies? In which perspectives should we excel at what?
the Balanced Scorecard is based on performance measurement and derives its objectives from vision and strategy. It enables shared understanding of the links between strategy, critical success factors and actions while establishing accountability
The Balanced Scorecard focuses on creating and communicating a total comprehensive picture to all members of the...
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