Balanced Scorecard is an extremely useful tool in Business Strategy.
Besides being used as a tool for the company’s Strategic management system/process, it is also deployed for the business’s Measurement system and as Communication Tool.
Below provide some details of the Balanced Scorecard:
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- Balanced Scorecard is not at all new in the market. It was initiated in 1992 with many companies especially Fortune 1000 adopting the BSC with phenomenal result.
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- It was originally developed in the early 1990’s by Dr Robert Kaplan ( Prof Harvard Univ) and David Norton (Consultant). Both men researched on exploring new methods of performance measurement. They believed that financial measures of performance alone were ineffective for the modern business enterprise.
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- Their study identified four areas of performance measures :
· Customer issues
· Internal business process
· Employee activities
· Shareholder concerns
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SALIENT POINTS:
To make a Balanced Scorecard a really useful tool for management,
- The company’s vision and mission need to be formulated before any other strategies can evolve ( using SWOT analysis)
- Enable all level of management to specifically understand performance management re: on what are really key performance areas and key performance indicators
- When automated, where the Balanced Scorecard have been set, it helps to communicate to all level of management a common goals/strategy to achieve or enhance shareholder value.
- Also note that Balanced Scorecard are applicable to individual department or even project and not necessarily on the company alone.
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Click here to go to all topics on Balanced Scorecard
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