A balanced Scorecard
A BALANCED SCORECARD 1
Abalanced scorecardis a strategic management and planning system used widely in industryand business, nonprofit organizations, and governments globally toincorporate business processes into the plan and vision of theorganization. In addition, it is essential for boosting internal aswell as external connections, and scrutinizes business performance inrelation to strategic goals. The balanced scorecard emerged whenDavidNortonand Dr.Robert Kaplan,saw the need to improve the performance of an organization byattaching its operations to its vision and strategy. The tool can actas a performance measurement outline that enhanced premeditatednon-financial performance procedures to conventional financialmetrics to facilitate business executives and managers with a morebalanced view of organizational performance.
Thebalance scorecard approach can provide a management plan that can aidmanagers keep track of the many factors that influence performance.However, the strategy has one major pitfall. It lacks a metric thatallows managers to make tradeoffs. Business managers need aprevailing metric to indicate to them the definitive score, and themetric should sum up the interaction between the indicators so that amanager has direction in his/her actions. Fortunately, a proper "VBM"parameter has been incorporated within a balanced scorecard to enableit to provide a similar metric.
Abalanced scorecard can serve the following functions. It enablesmanagers to:
Build an understanding around the company`s strategy and vision.
Communicate their plan up and down the organization and connect it to departmental and personal objectives. This tool enables managers an avenue to ensure that all ranks of the organization comprehend the long-term plan and that both personal and corporate goals are made parallel to it.
Coordinate only those initiatives that move them toward their long-term strategic achievements. In return, this enables the business to incorporate their financial and business strategies together.
In addition, the tool gives the organization the capacity for strategic learning. It allows companies to amend procedures to reflect synchronized learning so as, not to get into the same pitfalls repeatedly.
ISSystems essential in helping managers to obtain information for thevarious scorecard components may be arranged into the followingcategories:
Project planning and project Building: This is a system is essential for setting up and following up on projects. It incorporates all the functions that are needed in an easy to use work atmosphere. The tool simplifies project planning.
Document management system: the scorecard can be integrated with the document management system to ensure efficiency in the storage of valuable company information.
Billing system: this system can be attached to the business scorecard to improve the accountability and transparency, as well as secure computation of all company transactions. It is a critical component of the enterprise operations arm in a business scorecard.
Workforce planning system: this tool is essential in planning the human resource needed for the work available to the company. It also ensures capacity planning in project assignment in the day-to-day operations of the enterprise. It significantly contributes to work efficiency.
Project information system: this is a comprehensive and flexible IS system that can be vital in monitoring and scheming project data.
Ifcorrectly adhered to, the balance scorecard tool can enable companiesto attaing high profits by incorporating all the important componentsof the business to each other. The alignment of the components to thecompany goals ensures that the focus or objectives of an organizationare not lost in the management process.
Kaplan,R. S., & Norton, D. P. (1996). Thebalanced scorecard: translating strategy into action. Harvard Business Press.