Understanding Balanced Scorecard in Strategic Planning
The Balanced Scorecard is a strategic planning and management method that aligns business activities with organizational goals, improves communications, and monitors performance. It involves identifying financial and non-financial measures, setting targets, and measuring success regularly. The framework includes perspectives such as financial, customer, internal processes, and organizational capacity, with indicators and initiatives under each perspective. Excel templates and financial indicators are utilized to track and assess performance in various areas.
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The Balanced Scorecard The Balanced Scorecard is a strategic planning and management method used to: align business activities to a vision and strategy of an organisation improve internal and external communications monitor organisational performance against strategic goals. The design of Balanced Scorecard concerns itself with: the identification of a small number of financial and non-financial measures referred to as Perspectives setting targets for the measures and then measuring them on a regular basis to determine success or failure.
Balanced Scorecard Indicator 1 Indicator 2 Indicator 3 Indicator 1 Indicator 2 Indicator 3 Financial Customer Vision Internal Processes Organisational Capacity Indicator 1 Indicator 2 Indicator 3 Indicator 1 Indicator 2 Indicator 3
Balanced Scorecard Financial Objectives Measures Initiatives Customer Internal Processes Objectives Objectives Vision Measures Measures Initiatives Initiatives Organisational Capacity Objectives Measures Initiatives
Typical Excel Balanced Scorecard Indicator Target Weight Description Value Financial Perspective Description KPI - 1 KPI - 2 KPI - 3 Financial Perspective Total Performance in group Customer Perspective Description KPI - 1 KPI - 2 KPI - 3 Customer Perspective Total Performance in group Internal Processes Perspective Description KPI - 1 KPI - 2 KPI - 3 Internal Processes Perspective Total Performance in group Organisational Capacity KPI - 1 KPI - 2 KPI - 3 Organisational Capacity Perspective Total Performance in group
Financial Indicators Finance Objectives Objective 1 Objective 2 Objective 3 Measures Targets Initiatives
Customer Indicators Customer Objectives Objective 1 Objective 2 Objective 3 Measures Targets Initiatives
Internal Processes Indicators Internal Processes Objectives Objective 1 Objective 2 Objective 3 Measures Targets Initiatives
Organisational Capacity Indicators Organisational Capacity Objectives Objective 1 Objective 2 Objective 3 Measures Targets Initiatives
Integrated with a Strategy Map Vision Mission Strategic Priorities Priority 1 Priority 2 Priority 3 Strategic Results Measures Targets Initiatives Business Objectives and Strategy Map Financial Increase Profitability Increase Revenue Reduce Costs Customer Internal Processes Organisational Capacity Professionalism - Commitment - Initiative - Team Work - Winning Mentality 10
A Different Approach Vision: Mission: Financial Internal Customer Learning
The Quickscore Application Software is not required to implement a Balanced Scorecard, but it does help. Furthermore a good software tool will allow user to: organise key metrics in a meaningful way display data and combinations of data provide management teams with a clear business overview allow users to input data easily and frequently Provide the means to drill down to the underlying data should the need arise to question a specific activity Intrafocus recommends the Spiderstrategies Quickscore product to those companies that want to take a structured approach to rolling out Balanced Scorecards
