Balanced Score Card

It is a strategic planning and management system used to align business activities to the vision statement of an organization. A Balanced Scorecard approach is to take a holistic view of an organization .

A Balanced Scorecard approach generally has four perspectives:

1) Financial
2) Internal business processes
3) Learning & Growth (human focus, or learning and development)
4) Customer

Each of the four perspectives is inter-dependent - improvement in just one area is not necessarily a guarentee or recipe for success in the other areas .

Implementing the Balanced Scorecard system company-wide should be the key to the successful realisation of the strategic plan/vision.

A Balanced Scorecard should result in:

1) Improved processes
2) Motivated/educated employees
3) Enhanced information systems
4) Monitored progress
5) Greater customer satisfaction
6) Increased financial usage

Feedback is essential and should be ongoing and contributed to by everyone within the organization.

And it should be kept in mind that Balanced Scorecards do not necessarily enable better decision-making .

A ) Finance section could measure ::
1) Return On Investment
2) Cash Flow
3) Return on Capital Employed
4) Financial Results (Quarterly/Yearly)

B) Internal Business Processes ::

1) Number of activities per function
2) Duplicate activities across functions
3) Process alignment (is the right process in the right department?)
4) Process bottlenecks
5) Process automation

C) Learning & Growth ::
1) Is there the correct level of expertise for the job?
2) Employee turnover
3) Job satisfaction
4) Training/Learning opportunities

D) Customer ::

1) Delivery performance to customer
2) Quality performance for customer
3) Customer satisfaction rate
4) Customer percentage of market
5) Customer retention rate



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