Balanced scorecard implementation

Ever since Dr. Robert Kaplan (Harvard) and Dr. David Norton first introduced a powerful analysis tool called Balanced Scorecard (BSC) the use of the same is going on increasing. While it has its roots from General Electric, the first shape was given by these two. Simply put, Balanced Scorecard is now a strategic management system, though it was a simple tool used to measure the performance of a company’s vision, goals, strategy etc., for some enterprises now, Balanced Scorecard is serving as a core management control centre.

While the management tools, performance measures, analysis based on financials of the company were suitable for the manufacturing and service oriented companies, their suitability to the new wave information age companies was questioned. While translating their vision and strategy, these new enterprises need to not only look at their financials, but also from the customer perspective, process perspective and learning and growth perspective. Towards this route, Balance Scorecard got itself aligned with Business Intelligence. And as Information Technology is moving at a faster pace, with Web 2.0, which promises to take every one to real time, enterprises are approaching an era where there is decisions based on continuous conversations.

A key component of Balanced Scorecard is performance management. Simply stated, a company’s vision is converted to a strategy map which is linked to KPIs or key performance indicators. Identifying, Defining, Measuring, Monitoring and Reporting KPIs is the performance management framework. It should be a persistent process. When it is done like that, it benefits the company by way of providing the stake holders with comprehensive information about achievement.

Balanced Scorecard Perspectives

The four perspectives of BSCs, as explained above, form the company’s strategy.

• Learning and Growth perspective is about “to achieve our vision how the company should organise learning and improvement”.
• Process or Internal perspective is about “to delight the customers what processes we should follow”
• Customer perspective is about “how we look at our customers”
• Financial perspective is about” how we look at our share holders”.

An illustration: A company, whose vision is long term share holder value, looks at financial perspective of increased revenue and cost efficiency, which are achieved by looking at customer’s look out points – price, quality and service; to achieve price, quality and service, management processes are developed based on the HR Capital.

Balanced Scorecard Tools

Business Intelligence tools automate the Balanced Scorecard system. We know that Business Intelligence tools cover a wide range of analytics like, Sales Analysis, Financial Analysis, Quality Analysis, Customer Analysis etc., with the present advanced business intelligence and analytical software; it is easy to get the Balanced Scorecard based on integrated data.

In the recent Gartner’s 2010 Magic Quadrant for Business Intelligence, MicroStrategy is positioned as as one of the leader in BI Applications along with SAS, IBM, Oracle and Microsoft. MicroStrategy is one of the preferred BI tools by companies. MicroStrategy’s BI suite includes reporting tools specifically meant for Balanced Scorecard. Another top notch application is Oracle’s Hyperion which provides a company with Balanced Scorecard Collaborative Applications.

Organisations worldwide, having their vision set on becoming leaders in their industry, has started realising the potential of BI tools supporting Balanced Scorecard management system.

About the author:

• Malick Md
• PMP, Technology Expert And Writer
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