Balanced Scorecard

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Balanced Scorecard
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Meaning- It is a connecting bridge between the
strategy and operation elements of the
organization
Balance Scorecard Meaning and Definition
Definition- It is a performance based metric
which companies used for strategic management

• Purpose of Balanced Scorecard
• Ensure clear communication about goals
• Align daily work with strategy of the company
• Prioritize on product, project and services level
• Monitor and measure organizational progress

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Kaplan and Norton balanced scorecard
Background to the Balanced Scorecard

• The balanced scorecard was developed in early
  1990
• It measures firms performance using both
  financial and
• non-financial data
• Aim- 1. To align the work activities of
  organization to its vision
• 2 To improve communication
• 3.To monitor business performance
  with respect to strategic goals

• A broad picture of status of organization can be
  created using different perspectives
• Composite scorecard is always preferable than
  single measure to determine the performance
  progress of organization
• Four important perspective of analysis of
  organization- customer, finance, internal,
  learning and growth.
• Critical measures should be selected for these
  perspectives

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Four Perspectives of balance scorecard

1. Financial Perspective
2. Customer Perspective
3. Internal Process Perspective
4. Learning and Growth Perspective

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Balanced Scorecard Approach

• Preparation
• First round of interviews
• First executive workshop
• Second round of interviews
• Second executive workshop
• Third executive workshop
• Implementation
• Periodic Reviews

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Advantage of Balanced Scorecard

• Builds up the necessary focus which is needed to
  improve performance
• Integrates the organization as one entity
• Helps in reflecting organizational strategy
  through performance
• Connects the corporate team with the operational
  team of organization
• Improves clarity and communication among
  employees
• Improves organizational efficiency

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Disadvantages of Balanced Scorecard

• Can be confusing for employees due to large
  number of performance indicators
• It is hard to manage balance between all four
  perspectives of balanced scorecard
• The operational team might get busy in execution
  but the leadership team will still look for quick
  financial results.
• Need to be updated regularly to maintain its
  relevance for the organization.

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Purpose and Objective of Balanced Scorecard

• Objective
• To ensure that at operational level the vision,
  mission and value of the organization is properly
  reflected
• To make sure that the set financial goal is
  achieved through a planned workout
• To uplift the organization at the skill and
  talent level
• To understand the wants and needs of customer and
  to set a internal processes to satisfy the
  customers

• Purpose
• To integrate the organization on one platform
• To empower the employees who can now contribute
  in the organizational system
• To measure both tangible and non-tangible aspects
  of performance
• Overall performance improvement of organization

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Thank You