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What is the Balanced Scorecard? ... They named this system the balanced scorecard. Recognizing some of the weaknesses and vagueness of previous management approaches, the balanced scorecard approach provides a clear prescription as to what companies should measure in order to balance the financial perspective.
The balanced scorecard is a management system (not only a measurement system) that enables organizations to clarify their vision and strategy and translate them into action. ... When fully deployed, the balanced scorecard transforms strategic planning from an academic exercise into the nerve center of an enterprise.
Kaplan and Norton describe the innovation of the balanced scorecard as follows:
"The balanced scorecard retains traditional financial measures. ... "
The balanced scorecard suggests that we view the organization from four perspectives, and to develop metrics, collect data and analyze it relative to each of these perspectives:
1. ...
The Balanced Scorecard and Measurement-Based Management
The balanced scorecard methodology builds on some key concepts of previous management ideas such as Total Quality Management (TQM), including customer-defined quality, continuous improvement, employee empowerment, and -- primarily -- measurement-based management and feedback. ...
The balanced scorecard incorporates feedback around internal business process outputs, as in TQM, but also adds a feedback loop around the outcomesof business strategies. This creates a "double-loop feedback" process in the balanced scorecard. ...
Balanced Scorecard: A measurement-based strategic management system, originated by Robert Kaplan and David Norton, which provides a method of aligning business activities to the strategy, and monitoring performance of strategic goals over time. ... This could include a balanced scorecard system, Enterprise Resource Planning (ERP) system, Decision Support System (DSS), etc. ... In the balanced scorecard, measurements are collected for feedback. ... (Note that the balanced scorecard is a strategic management, not a project management technique). ... It usually shows the four perspectives of the balanced scorecard in four layers, with learning & growth at the bottom, followed by business processes, customer satisfaction, and financial results (or mission value in the case of nonprofits). ... [John Zachman, 1987, IBM Journal]
The Balanced Scorecard -- Not Just Another Project
Managers in many government agencies have been reared on project management. ...
The balanced scorecard management system is not just another project. ...
The first thing to notice is the topology: the balanced scorecard management process, derived from Demings Total Quality Management, is a continuous cyclical process. ... What kind of plan is appropriate for deployment of the balanced scorecard system? ... The situation is similar with the balanced scorecard. ... It is evident from this comparison that BPI and the Balanced Scorecard are quite different in most respects from project management. ...
Project Management Business Process Improvement Balanced Scorecard
Age of Approach Decades Began in DoD 1992 Began in 1990
Prime Customer External Sponsor Internal Director External IG, Internal Director
Goal Definition Project Requirements, Mission Needs Statement Cost, cycle time reductions Strategic management system
Focus Technical Mission Business Processes Multiple perspectives
Scope Specialized unit unit to enterprise dept. ... Currently an emerging idea is the balanced scorecard. ... The balanced scorecard, for instance, appears to be a very appropriate technique for meeting the urgent management needs of many Government agencies, such as their need to comply with the requirements of the GPRA. ...
Time Horizon (years) Strategic Goal Change Readiness Technical Level Risk Tolerance Recommended Option
2-3 GPRA Compliance Moderate High Moderate Balanced Scorecard
3-6 >30% cost reductions, survival High High High BPR
1-3 20% Cost reductions Moderate Moderate Moderate BPI
Long term Continuous improvement Moderate Moderate Low TQM
2-3 Baldrige score elevation Moderate High Low Balanced Scorecard + ABC
2-5 Strategic alignment Low Moderate Moderate Balanced Scorecard
2-5 Marketing credibility Low Low Moderate ISO-9000, incremental
2-5 Increased capabilities Moderate High Low CMM
Note that not all possible combinations of conditions are included in the table. ...
It should be emphasized to everyone that the main purpose of the balanced scorecard is not individual performance, but collective organizational performance. ... (ISO 9001, ISO 14000, Baldrige, ABC, EVA, CMM, Balanced Scorecard, strategic initiatives). ... What is needed is a minimum basic set of measurements across various business perspectives and aligned to our strategic plan, as the balanced scorecard prescribes.
Approximate Word count = 8787
Approximate Pages = 35.1
(250 words per page double spaced)
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