The Balanced Score Card (BSC) is a strategic performance management tool - a semi-standard structured report, supported by proven design methods and automation tools, that can be used by managers to keep track of the execution of activities by the staff within their control and to monitor the consequences arising from these actions. It is perhaps the best known of several such frameworks
Since 2000, use of the Balanced Score Card, its derivatives (e.g., Performance Prism) and other similar tools (e.g., Results Based Management) has also become common in the Middle East, Asia and Spanish-speaking countries.
The characteristic of the Balanced Score Card and its derivatives is the presentation of a mixture of financial and non-financial measures each compared to a 'target' value within a single concise report. The report is not meant to be a replacement for traditional financial or operational reports but a succinct summary that captures the information most relevant to those reading it. It is the method by which this 'most relevant' information is determined.
- Provides a common framework for strategic planning
- Assures corporate strategies are clearly communicated throughout the enterprise
- Focuses management on cause and effect relationships between processes and key performance indicators
- Provides key information by measuring the results of the strategic plans and assessing the quality of tactical.
- The Four Perspectives- The four perspectives of the scorecard permit a balance between short and long-term objectives, between outcomes desired and the performance drivers of those outcomes and between hard objectives measures and softer more subjective measures
What are the benefits of the Balanced Score Card approach?The benefits of the Balanced Score Card have been identified by many organizations: • Improved organization alignment, Improved communications, both internally and externally • Linked strategy and operations • More emphasis on strategy and organizational results • Integrated strategic planning and management
What organizations are using the Balanced Score Card?By 2004, the Balanced Score Card has been at least partially implemented in about 57% of global corporations, according to a survey by Bain. This site contains some examples of companies and government organizations that have reported their use of the Balanced Score Card.
What materials are provided with the courses?Participants receive a comprehensive workbook, the Performance Toolkit, a case study, worksheets to follow the case study, articles, other reference materials and a packet of informational handouts, along with a resource CD, a CEU credits form and a personalized certificate.
How does the Balanced Score Card help in improving performance?Balanced Score Card works on the premise that measurement drives performance. Historically, organizations measured performance based purely on financial parameters. The Balanced Score Card approach lays strong emphasis on measuring key strategic parameters not only financial, but also non-financial parameters. By identifying the top 4-5 strategic objectives within each of the 4 perspectives, the Balanced Score Card presents a comprehensive picture of a company's strategy.
What type of organizations can implement the Balanced Score Card ?• The Balanced Score Card is a flexible tool and can be implemented by any kind of organization: • Non-profit organizations, to enable delivery of its social objectives, based on the availability of limited resources • Government organizations / departments to enable delivery to the public / community. • Large, medium and small businesses to ensure achievement of revenue / profit objective for its shareholders
What metrics should be used in Balanced Score Card ?Metrics should be created around the four organizational perspectives: financial, customer, internal business process and learning and growth. Each organization’s metrics will be unique and tailored to their business. Creating these metrics is a strategic process and should align with the organization’s vision and goals.
What are the potential benefits of using Balanced Score Card ?• Promotes accountability • Clearly communicates vision and strategy to organization • Creates a feedback loop for organizational learning • Aligns organization vision with human and capital resources and with day-to-day operations
What are the four organizational perspectives?• Financial: “How should we appear to our stakeholders?” • Internal Business Process: “What business processes must we excel at?” • Customer: “How should we appear to our customers?” • Learning & Growth: “How will we sustain our ability to change & improve?”