Upward airlines reading a balanced scorecard strategy map. Conceptual foundations of the balanced scorecard 3. In 1990, kaplan and norton led a research study of a lot of companies with the purpose of exploring the new methods of performance measurement. Balanced scorecard software quickscore from intrafocus. Next, we move on to the key lessons that the balanced scorecard offers. This system provides feedback on internal business processes and external outcomes to continually improve organizational performance and results. The balanced scorecard concept is a management and measurement system which enables organizations to clarify their vision and strategy and translate them into action. Review of free, open source and top balanced scorecard software. The balanced scorecard suggests what the key indicators should be, and provides a method for identifying specific measures and goals, translated from a. The balanced scorecard was developed in the early 1990s by two guys at the harvard business school. The balanced scorecard provides governments with a more holistic performance management methodology. This system is more frequently used in a strategic planning than. The methodology calls for the balance between financial, customer, internal progress and learning perspectives.
Being a fresh graduate and having lots of free time, i stumbled upon. You might not have heard of them before, but they are a very popular methodology for transforming strategy into action. Balanced scorecard collaboratives norton says that approach is the most effective way to implement the balanced scorecard, adding that the monopoly game is a cool idea. The balanced scorecard is the leading methodology for implementing performance management systems and improving efficiency. Ppt balanced scorecard powerpoint presentation free to. Its a way of looking at your organization that focuses on your bigpicture strategic goals. Balanced scorecard is a strategy performance management tool a semistandard structured report, 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 the phrase balanced scorecard primarily refers to a performance management report used by a management team, and typically. Balanced scorecard development methodology pmi africa.
One of the most powerful elements in the bsc methodology is the use of strategy mapping to visualize and. This process, which is based on the balanced scorecard methodology, is very different to many other strategic processes. The balanced scorecard methodology was originally developed for the private sector its potential to improve the management of public sector organizations psos is even greater. Other contemporary methods such as objectives and key results offer very similar approaches from an execution perspective. The balanced scorecardmeasures that drive performance. The balanced scorecard is a strategic planning and performance management framework that tracks financial and nonfinancial measures to determine an organizations effectiveness and when. Balanced scorecard sustainability management with the balanced scorecard in recent years many corporations have implemented environmental andor social management. This article also contains a downloadable and editable balanced scorecard template. The balanced scorecard bsc framework, implementation methodology and recommended application. By using a balanced scorecard bsc as part of a project management approach, organizations can bridge the gap that exists between managing projects and managing project portfolios. Ease of creating images compatible with different media, such as pdf. Balanced scorecard is used by many successful businesses all around the world. The institutes awardwinning framework, nine steps to success tm,is a disciplined, practical approach to developing a strategic planning and management system based on the balanced scorecard.
With that in mind, lets dive right in to an example of what a balanced scorecard looks like in practice. This does not mean that agencies are not free to employ. Specifically, a balanced scorecard is a framework for a strategic measurement and management that incorporates intangible assets. Customer, internal processes, learning and growth, and financial. The balanced scorecard bsc is a business framework used for tracking and managing an organizations strategy. What is unique about the balanced scorecard approach, in contrast to. Think of a balanced scorecard as the instrument panel in the cockpit of an airplane. The concept of balanced scorecard has evolved beyond the simple use of perspectives and it is now a holistic system for managing strategy. About balanced scorecard balanced scorecard bsc is a management system that can activate the energy, skills and specific knowledge that. Balanced scorecard is a strategy performance management tool a semistandard structured report, 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. The goal of the balanced scorecard is to tie business performance to organizational strategy by measuring results in four areas. Commentary transforming the balanced scorecard from. A priority is an area of activity that will receive focus during any given strategic cycle.
The balanced scorecard is a workshop technique for establishing the most useful high level measures by which to monitor your companys units progress and performance against its strategic goals. The balanced scorecard has emerged as a proven and effective tool in our quest to capture, describe, and translate intangible assets into real value for all of an organizations stakeholders and, in the process, to allow. Unfortunately, not many tools exist to measure and monitor. The key problem that kaplan and norton identified in the business of the day was that many companies tended to manage their businesses based solely on financial measures. This new approach to performance measurement is consistent with the. But financial measures tell the story of past events, an. Robert kaplan and david norton created the balanced scorecard approach in the. The balanced business scorecard, or the balanced scorecard, is a management tool used by many organizations in order to align their activities with their goals.
The methodology of the balanced scorecard kaplan and norton, 1997, p. Strategic planning basics balanced scorecard institute. This article explains the balanced scorecard, developed by robert kaplan and david norton, in a practical way. This article also contains a downloadable and editable balanced scorecard template what is a balanced scorecard. Before presenting balanced scorecard examples, it is important to understand the context and the concepts behind the management and monitoring tool created by professors robert s. A study on the benefits of adopting the balanced scorecard methodology. This free webinar takes the planning stages of our nine steps methodology steps 16 and reframes them in the context of planning a response to a major disruption. Feb 26, 2011 planning role responsibilities assumes ownership for the balanced scorecard project provides background information to the team on the strategy and methodology executive maintain communication with senior management sponsor commit resources to the team provide support and enthusiasm for the balanced scorecard throughout the organization. Kaplan and norton extends beyond financial measures to link vision to action. Finally, smaller cap stocks are then slotted into this distribution without a force ranking, and may not exhibit the same balanced distribution. Commentary transforming the balanced scorecard from performance measurement to strategic management. It also helps you choose the right things to measure so that you can reach those goals. The balanced scorecard methodology developed by drs. What follows, provides guidance and advice on the development and implementation of a balanced scorecard for those organisations considering the introduction of a.
Its this focus on both highlevel strategy and lowlevel measures that sets the balanced scorecard apart from other performance management methodologies. The exercise of developing and implementing a balanced scorecard, when accomplished properly, acts as the nexus for organizational change management. The balanced scorecard bsc is a strategic planning and management system that organizations use to. Jan 02, 2012 this book provides an easytofollow roadmap for successfully implementing the balanced scorecard methodology in small and mediumsized companies. An integrated framework for describing and translating strategy through the use of linked performance measures in four balanced perspectives. We help businesses of all sizes operate more efficiently and delight customers by delivering defectfree products and services. From theory to practice farshad akbarzadeh ma student indepartment of business management of islamic azad university of guilan abstract performance management has become a legislative requirement for the private and local sectors. A free powerpoint ppt presentation displayed as a flash slide show on id.
Balanced scorecard bsc is one of the performance measurement tools that determine intangible assets of the organization. Strategic planning is an organizational management activity that is used to set priorities, focus energy and resources, strengthen operations, ensure that employees and other stakeholders are working toward common goals, establish agreement around intended outcomesresults, and assess and adjust the organizations direction in response to a changing environment. Quickscore makes it easy for you to set up a scorecard so you do not have to concern yourself with structure or terminology. Ive done my best to leave the shop talk at the curb, and explain this strategic methodology in plain english. Kaplan, 1999 given the fundamental differences between public and private sector management, this post looks at emerging good practices in public sector. The balanced scorecard methodology strategic management. Balanced scorecard, might conjure up an initial impression of a table of measurements or key performance indicators, it is in fact a process comprising of a number of carefully interlinked steps. By the end of this article, youll be a balanced scorecard expert.
Norton is founder and president of the balanced scorecard collaborative in lincoln, massachusetts. Theres a lot that goes into explaining this topic, but lets begin with the balanced scorecard definition and basics. Balanced scorecard definition of balanced scorecard by robert s. The balanced scorecard retains traditional financial measures. Strategy scorecard 5 easy steps intrafocus strategy. A balanced scorecard is a performance metric used in strategic management to identify and improve various internal functions of a. What are the advantages of the balanced scorecard in government. Diploma thesis, faculty computer science reutlingen university, 19. Traditionally, companies have judged their health by how much money they make. The cooperation with six companies has made it possible to gather valuable experiences when developing and implementing a sbsc. Kaplan and norton describe the innovation of the balanced scorecard as follows.
A practitioners guide to the balanced scorecard cima. The four perspectives of the current version of the balanced scorecard can still be applied in government organizations as long as they are rearranged according to governmental priorities. This book provides an easytofollow roadmap for successfully implementing the balanced scorecard methodology in small and mediumsized companies. A balanced scorecard strategy map is a onepage visual depiction of an organizations scorecard. Align project management with strategy balanced scorecard.
Planning role responsibilities assumes ownership for the balanced scorecard project provides background information to the team on the strategy and methodology executive maintain communication with senior management sponsor commit resources to the team provide support and enthusiasm for the balanced scorecard throughout the organization. Balanced scorecard basics communicat business systems. Balanced scorecard free ppt and pdf download workshopbank. After reading you will understand the basics of this powerful strategy and performance management tool. And finally, we come to initiatives often called projects. Pdf the balanced scorecard concept has been adopted by all types of organizations. The balanced scorecard was developed by robert kaplan and david norton 1992. The balanced scorecard perspectives are insisting on examining different strategies and choosing the most appropriate one.
There are a number of tool and models that seek to achieve the same result, but the balanced scorecard is one of the most popular and most successful in use. This starts by identifying what your priorities really are. Where we believe the balanced scorecard methodology has great strengths, we recognise that many organisations have been grappling with strategy for decades and have created their own methodologies. Kaplan is a professor at harvard university and david p. Balanced scorecard for stateowned enterprises asian.
Where balanced scorecarding has a leg up it seems to me, is. The strategy must be covered by a welldefined and clear longterm vision that would represent one common organizational goal. Conceptual foundations of the balanced scorecard robert s. The balanced scorecard is a strategic planning and performance management framework used by business, government, and nonprofits to align daytoday activities with enterprise vision, mission. The balanced scorecard includes financial measures that tell the results of actions. Understanding the equity summary score methodology 2 capitalization, which typically make up the majority of individual investors portfolios. Balanced scorecard stepbystep volta river authority. The balanced scorecard focuses on factors that create longterm value traditional financial reports look backward reflect only the past. A read is counted each time someone views a publication summary such as the title, abstract, and list of authors, clicks on a figure, or views or downloads the fulltext. Following a total balancedscorecard approach gives your business the balance needed to. Training is an integral part of the framework, as is coaching, change management, and problem solving. Bsc approach to performance measurement and management, which is currently in use by. Knowledge and use of the balanced scorecard method in the.
A few comments about the balanced scorecard methodology. Balanced scorecard basics balanced scorecard institute. The balanced scorecard can be effective in the public, if and only if, the current perspectives are rearranged see figure 3. Balanced scorecard in public sector realising the open source software strategy with the it balanced scorecard. The balanced scorecard is a strategic management system used to drive performance and accountability throughout the organization. Features, pricing, alternatives, free demos, free trials of sisense, corporater, clearpoint strategy, quickscore, bsc designer, andara, pblscorecard, qpr software, esm, inexus, peoplesoft scorecard, and board are some of the examples of best balanced scorecard software. It is intentional that initiatives are at the end of the strategic scorecard process. The scorecard balances traditional performance measures with more forwardlooking indicators in four key dimensions. Main aim of the paper is to present the results of primary research focused on detecting the current state of the knowledge and use of the balanced scorecard method in businesses in the slovak republic.
Balanced scorecard sbsc integrating ecological, social as well as economic aspects. The balanced scorecard is the closest management tool to a crystal ball as you will find. How to apply the government balanced scorecard freebalance. Performance management has become a legislative requirement for the private and local sectors. With quickscore you can embed strategic processes such as the balanced scorecard. Pdf how to build a successful balanced scorecard researchgate. The balanced scorecard is a management system aimed at translating an organizations strategic goals into a set of performance objectives that, in turn, are measured, monitored and changed if necessary to ensure that the organizations strategic goals are met. A balanced scorecard is a performance metric used in strategic management to identify and improve various internal functions of a business and their resulting external outcomes. A full balanced scorecard example including 6 templates. The name balanced scorecard comes from the idea of looking at strategic measures in addition to traditional financial measures to get a more balanced view of performance. I find that balanced scorecarding offers a very coherent and complete approach to performance management.
David norton and i introduced the balanced scorecard in a 1992 harvard business. The main purpose of a strategy scorecard is to break a vision down into manageable work items. This paper examines how organizations can use the bsc to integrate project management and project portfolio management so as to align projects with organizational strategy and help the organization achieve its. Building on the success of the first edition, the second edition includes new cases based on the authors experience implementing the balanced scorecard at government and nonprofit agencies. Balanced scorecard is a management system that enables organizations to translate the vision and strategy into action. The balanced scorecard methodology free download as powerpoint presentation. The real power of a properly developed balanced scorecard is that it links the performance measures to the organisations strategy. My experiences as a balanced scorecard practitioner with a large canadian company taught me that tremendous results are possible with the tool, but to attain. Get free investorgrade startup feedback in just 15 minutes this article was originally written in may 2001, revised extensively in january 2011 and again october 2011. If you want some examples in your industry, download one of our free ebooks. Focusing directly on the public and notforprofit sectors, this book helps these organizations overcome the unique challenges they.
1135 701 835 1500 1407 8 1206 1393 1167 1199 176 941 1002 808 1477 328 171 1403 650 1328 1253 1291 697 1153 337 222 750 167 824 414 1466 304 1316 1166 624 87 1435 635 516 117 432 833 1151 379 27 635 1143