Balanced Scorecard definition
Strategic corporate planning and business management system is defined as Balanced Scorecard. It is used in diverse channels.
Government bodies, non-profit organizations, and the varied businesses, as well as the industries. It is used to alight the business operations, to achieve the prime objectives and goals of the institution as a whole. Internal communications are improvised with the implementation of the Balanced Scorecard.
External communications are strengthened with the Balanced Scorecard.
Organizational performance coefficient can be deduced with the detailed analysis done strategically based upon the Balanced Scorecard.
1.1 Balanced Scorecard Basics
Dr. Robert Kaplan from the Harvard Business School and his peer in the same institution Dr. David Norton found this system, initially. This was found earlier only as a measured of the performance coefficient. Organizational operations are analyzed strategically to arrive at the performance coefficient denominator finally, as KPI unit.
1.2 What is kpi?
All those factors that contribute towards the success of a business organization are identified as key performance indicators. The experts initially for analysis identify the KPI strategically. The performance coefficient of the organization can be increased only by identifying these indicators first. Therefore, basically, customers can define kpi to be a business metric. This metric helps one to arrive at the clear-cut picture about the performance showcase, of any business organization.
These indicators are subjected to vary from one organization to the other. Experts discuss with the technical team and the human resources team, initially, to understand the key factors initially before they do the actual Balanced Scorecard analysis for that particular organization. Customer loyalty metric or the business revenue can be good examples here for the factors that influence the KPI units of the organization. Similar, the unemployment rates can be the KPI factor for the success of any governmental set up.
1.3 Balanced view
Managers and the chief executives of the business organization do the key analysis to understand the performance of the organization as a whole each trimester. The time of the meeting may vary from one company to the other. Yet, the chief metric that is used to understand the real picture as a balanced view, to assess the organizational performance standards, is the KPI.
Balanced Scorecard is adopted by over 50% of the biggest US firms lately. Even other than the USA, in Europe and Asia, almost fifty to sixty percentages of the major business organizations are already following the Balanced Scorecard.
Some of the companies like Bain & Co. list top ten management tools. The listings are clearly indicating the importance of Balanced Scorecard as it is listed as fifth in the list of the top ten tools for managing businesses effectively.
Closely related strategic planning is the top most of the top ten listing of the management tools though.
Harvard business review ratings reveal that Balanced Scorecard is considered to be one of the most useful business ideas that has been found in the past 75 years period.
The Balanced Scorecard has eventually surfaced out to be a complete planning and management tool, while it was only initiated as a performance measuring metric.