Balanced Scorecard: Scientific approaches, new developments and products
Guerrero, S.; Carroggio, S.
Department of Economics and Business
International University of Catalonia
Abstract: The aim of this paper is to present the main scientific information, new developments, products, and some scientific approaches on the balanced scorecard engine.
Keywords: Engaged Leadership Strategic Objectives, Interactive Communications and Change, Management, Vision and Mission Performance Measures, Targets and Thresholds, Core Values Strategic Initiatives, Organization Pains and Enablers Performance Information Reporting, Customer Value Proposition Rewards and Recognition Program, Strategy (Perspectives, Strategic Themes, and Strategic Results), Evaluation.
This document has been done in order to spread some knowledge on Balanced Scorecard engines; those are some tools that help companies, specifically to the managers in order to make better decisions.
First there are explained the different products on balanced scorecard engines, there are briefly described the characteristics and the special focus of the function of each product. There are only the main, the biggest and the most implemented tools on the companies. Here we relate them and explain the principal uses and in some, a brief history since their born.
Then there are some scientific approaches and contributions in which some authors explain the relevance, characteristics and the potential uses of this type strategic engine. In some texts are explained the different uses while in others are some sentences explaining the evolution of this tool and the future implications in the companies’ operations. Also webs from Balanced Scorecard producers have been looked at, and then in this way we can better explain the different type of offers and products.
Finishing the last points that can be seen on this work are the conclusions where we personally show some opinions on this sector and the implications it can have for companies that do not have this tools implemented on its performance. And finally there are the bibliographic references if any would like to amply its knowledge on this new technologies and strategic engines.
Definition, Functions and Structure(bibliography:www.balancedscorecard.org
The balanced scorecard is astrategic planning and management systemthat is used extensively in business and industry, government, and non-profit organizations worldwide to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals. It was originated by Dr. Robert Kaplan (Harvard Business School) and David Norton as a performance measurement framework that added strategic non-financial performance measures to traditional financial metrics to give managers and executives a more 'balanced' view of organizational performance.
The balanced scorecard has evolved from its early use as a simple performance measurement framework to a fullstrategic planning and management system. The “new” balanced scorecard transforms an organization’s strategic plan from an attractive but passive document into the "marching orders" for the organization on a daily basis. It provides a framework that not only provides performance measurements, but helps planners identify what should be done and measured. It enables executives to truly execute their strategies.
The four areas of the balanced scorecard:
Financial Perspective—how is your organization performing financially? What financial metrics are the key indicators of success?
Customer Perspective—how do your customers perceive your company? How can you best understand the loyalty of your customers across the various touch points in your organization?
Internal Business Perspective—what must your company excel at? How successful is the execution of your company’s key business processes? What metrics best indicate both efficient and effective performance?
Innovation and Learning Perspective—what elements in your organization most contribute to your company’s ability to innovate, improve, and learn?
Since then, consultants and business leaders have suggested additional measurement areas and supplied alternative titles for some of the original four areas. The balanced scorecard has evolved and adapted.
Benefits of this engine:
Better strategic planning
Improved strategy communication and execution
Better management execution
Improved Performance reporting
Better strategic alignment
Better organisational alignment
Here are the main service providers who sell BSc that provide software and its integration in the enterprise
When looking for a company specialized in Balanced Scorecard you would find these ones:
IBM, scorecarding software provides capabilities that enable enterprises to successfully adopt a balanced scorecard approach to performance metrics. Enterprises can track and manage metrics for individuals, projects and the company at large, using a browser-based interface for quick access to balanced scorecard data. Plus analysis and alerts help you identify and improve on the factors that drive strong performance.
Scorecarding solutions from IBM help your organization in:
Align tactics with strategy with maps, diagrams and other balanced scorecard tools.
Improve accountability by assigning a primary owner for every metric.
Receive alerts when metric status changes and manage corrective actions.
View scorecards by status, owner and strategy map to keep focus on critical initiatives.
The goal of the Microsoft Balanced Scorecard Framework (BSCF) is to empower an organization to use the Balanced Scorecard to achieve returns on people, processes, customers, and information technology. The BSCF is designed to facilitate scorecard development and deployment at all phases and levels of an organization—to achieve the benefits of early automation without the attendant risks.
The framework is not a packaged application. Instead, it integrates a variety of Microsoft packaged applications and industry standards to automate a Balanced Scorecard. It consists of a set of tools and methods to help both business users and developers get to success faster and more reliably so software is no longer a hurdle to overcome in scorecard development, but an asset to speed development.
Balanced Scorecard remains one of the most enduring and widely used performance management concepts ever developed. Organizations of all types and sizes have received proven results by aligning business functions with vision and strategy. Corporater Balanced Scorecard software solution enables organizations to drive strategy execution through all levels.
By creating classical Balanced Scorecard structures like perspectives, strategy maps, strategic objectives, and KPIs, strategy is easily communicated using familiar terms. Users have the freedom to create non-classical, more innovative structures that address their specific requirements, such as creating a Balanced Scorecard Strategy Map. Corporater EPM Suite is certified by the Balanced Scorecard Collaborative, and fully supports Balanced Scorecard standards.
Manage client risk and follow the evolution of business you want and its links.
Assess the liquidity and solvency problems of its customers and investigate their potential purchases.
Find new customers classifying companies according to their solvency.
Analyze the evolution of his own company with respect to its competitors with built compromise and observe the situation of its key suppliers.
Generate clusters to study the evolution of the sector.
Software ExpertBSC is what is called a BSC (comprehensive scorecard) or (BSC) Balanced Scorecard, is very useful software to define the strategy and direction of business in the short and long term. First, because by combining financial and non-financial indicators, ExpertBSC, allows forward trends and make proactive strategic policy.
Second, because ExpertBSC provides an integrated view of the objectives from a structured method of selecting indicators that measure the performance of the company.
INSA Scorecard for Human Resources area is software developed with the aim of achieving fully support all the needs related to the report in a single product.
With the scorecard INSA (HR), in an easy and fast way, you can define indicators and scorecards for areas of recruitment, training, development, outsourcing, compensation and benefits, etc..
Scorecard INSA (HR) is a comprehensive solution that includes reports, alerts and dashboards by area, obtained from the business indicators, dimensions and hierarchies implemented in the model and the data warehouse management integrated into the solution.
Scorecard INSA (HR) is a system that provides all the necessary components on a reporting solution, including the physical data model implemented in the data warehouse and the loading programs and data extraction, which feed from these repository main applications of human resource management.
Software Manager is a scorecard created QlikView provides the information needed to know the status of the company and, in turn, delves into the details in order to analyze the areas that deserve greater interest and support decision making.
Director submits an initial screen with a panel of Leading Indicators, which will tell you visual immediate and fundamental aspects of its activity.
The income statement offered by Mercanza Manager allows you to enjoy the best analysis tool of its lines of business.
Scientific approaches: New developments
In the field of search engines or internet search are different approaches, some of them approximate each to other, then we will discuss some of them…
According to what Lin, Qing-Lian; Liu, Long and Liu, Hu-Chen (2012) explains about the health sector, and seeks to evaluate the performance of workers to provide greater flexibility and quality of their services. This is possible because of a performance evaluation system that allows administrators to control the process to promote staff operating performance.
BSC allows multiple administrators to meet strategic objectives and the fuzzy linguistic method to evaluate the performance.
You have to develop a model to measure production interaction acceptable or even financial, customer, internal processes and Apprenticeship business and growth perspective. After proposed integrated structure BSC. They do this to build a performance appraisal system.
All this is done in order to obtain results to evaluate and revise the strategy and to adopt modern management methods in daily practice.
Otherwise Dreveton, Benjamin (2013) try to explain the advantages of the balanced scorecard, for example that the BSC shows the benefits of the scorecard goes far beyond simply measuring performance: strategic benefits, organizational and human were won.
Other specialized persons on this sector, Hwa, Michael; Sharpe, Bradley A and Wachter, Robert M (2013) explains about the Academic hospitalist groups (AHGs), which seeks to improve the quality of their services, patient safety, education, research, administration and clinical care. To reach this it should develop strategies to balance their energies, resources and performance. The BSC is a strategic management system that allows you to translate the mission and vision and targets across multiple metrics specific domains. The BSC has four perspectives, these came out 41 indicators and 16 were chosen for the first BSC. This allows to achieve several goals as broad view of performance, transparency and accountability, communicate and engage targets teachers and ensure that data is used to guide the strategic decisions. This means reliable metrics and measurable data to the BSC to further the goals of the entire division.
Jaksic, Milena; Mimovic, Predrag; Domanovic, Violeta published on 2013 about the financial environment has the need to seek and define new concepts and performance measurement models in order to improve the quality of the sector. Nowadays, with the crisis in the financial markets, you should review the established models and management approaches in the management of financial assets.
According to Lin, Wen-Cheng (2013) said about the quality of municipal management and its relationship with society and reflects the situation of local governments. This document refers to the balance between analysis and integration of BSC survey of residents of the village.
Moreover Mutale, Godfrey-Fausset, Mwanamwenge and Tembo (2013) show about the growing interest in health system performance, so do a test in 3 districts of Zambia in order to strengthen the health system, to evaluate it made use of the modified balanced scorecard following areas identified in the strategic plan of the Ministry of Health 2011. BSC was applied in 42 health centers. Progress differences were observed in the district and residence for most of the domains with finances and service delivery. He speaks about the utility would have on the monitoring and evaluation of the systems of health.
Other specialized persons on this sector, Houck, Speaker and Fleming (DEC 2012) explains the interest of the BSC in laboratory management. THE BSC is a performance measurement matrix, designed for the indicators both financial and nonfinancial used to determine the critical factors of success of an organization and relate them to performance goals.
Looking for operational excellence through a combination of performance metrics whole organization, BSC ensures that no group of indicators dominate the evaluation process, which can lead to long-term underperformance. Leaders also help to offset the pressures of short-term performance, giving recognition and weight of laboratory needs long term, because if not adequately addressed, could jeopardize the future performance of laboratories.
Acoording to Javier Montero-Perez, de la Barca Gazquez and Jimenez (DEC 2012), talks about the management of an emergency department in a university hospital tertiary care. The project was carried out in the following phases: the validation of selection of indicators of activity and quality of processes and outcomes for the control panel, indicators, analysis of indicators from 2007-2009 and conclusions performance against the indicators. They come to the conclusion that a custom BSC allows ED to manage the corresponding time intervals and adapt to the standards of care, among other advantages of the systems, allowing corrective decisions based on analysis of the results.
Maurer, Teichgraeber and Kroencke (DEC 2012) tells us that the BSC is a management tool to organize a strategy focused objectives chosen. We analyze cause-effect relationships between objectives, serves for comprehensive control in the different sections of a clinic in this case and have more facility for research and teaching.
Finally we found Wu, Ing-Long and Kuo, Yi-Zu (DEC 2012) explains that the BSC provides a balance between financial and non-financial measures and has been applied in the evaluation of performance of individuals in the organization. Healthcare organizations often consider that progression in your target is in relation to customer satisfaction, and financial results. It creates a new hierarchy of BSC which would meet finance and customer service at the top, then we would find the internal process and finally would meet the learning and growth at the bottom.
The balanced scorecard as well as some other management tools will help companies align business activities with the vision and strategy of the organization. It will provide a more accurate appraisal of where your company is headed and not just where it’s been. It will facilitate your efforts to more completely assess progress across your organization.
Remember, in order to be successful, the balanced scorecard must do these things:
Include both well-devised and well-defined components.
Be highly visible and supported across your organization.
Be integrated as a fundamental element of your company’s compensation program
Evolve as the drivers of success of your organization change.
Start thinking about the different key elements of your business, where they fit, and what metrics you have that measure your company’s progress. Plan ahead. Read through the books listed in the footnotes below. Consider how you can best establish the balanced scorecard as a core part of your company’s compensation program. Mindshare is here to bring best practices guidance as you define your balanced scorecard and will assist you in creating visibility at all levels across your organization. This is how we see it.
The evolution of these tools creates competitive advantage to the companies which have these tools, and create disadvantages to those who don’t have it. In a near future those who have implemented it will not be an advantage, will be a requirement in order to survive in the company’s performance world.
Title: Balanced scorecard and IPA Enables Public Service in Township Management: Local Government Performance
Author(s): Lin, Wen-Cheng; Published: JAN 2013
- Title: Measuring health system strengthening: application of the balanced scorecard approach to rank the baseline performance of three rural districts in zambia. Author(s): Mutale, Wilbroad; Godfrey-Fausset, Peter; Mwanamwenge, Margaret Tembo; et al. Published: 2013 (Epub 2013 Mar 21)
- Title: The balanced scorecard: Sustainable performance assessment for forensic laboratories Author(s): Houck, Max; Speaker, Paul J.; Fleming, Arron Scott; et al. Published: DEC 2012
Title: Balanced scorecard management of a hospital emergency department
Author(s): Javier Montero-Perez, Francisco; de la Barca Gazquez, Jose Manuel Calderon; Jimenez Murillo, Luis; et al.; Published: DEC 2012
Title: The Balanced Scorecard - Applications in a Radiology Department
Author(s): Maurer, M. H.; Teichgraeber, U.; Kroencke, T. J.; et al.; Published: DEC 2012
Title: A Balanced Scorecard Approach in Assessing IT Value in Healthcare Sector: An Empirical Examination
Author(s): Wu, Ing-Long; Kuo, Yi-Zu; Published: DEC 2012