More companies are starting to implement Balanced Scorecard (BSC).
Balanced Scorecard is still based on financial performance, but equally focuses on company’s intangible and intellectual assets. BSC as an efficient strategy implementation and management tool can provide an adequate overview of company’s current situation focused on future earnings potential.
By implementing Balanced Scorecard, the company’s long-term strategy is integrated with every day activities in the business. The implementation process creates greater awareness among managers and employees and directs on the synergy between objectives, initiatives, and overall strategy.
Undoubtedly, the goal of implementing BSC is an improved economic situation and/or increased shareholder value.
In many companies, vision and strategy are factually never realized. This is due to the companies are unable to operationalize the vision and strategy of the business. The BSC management tool is designed with the purpose to break down the vision and strategy in a way that ensures the realization of the vision and strategy.
The number of perspectives and points of measurement that a BSC should contain depends on the specifics of the organization. The areas of measurement (BSC perspectives), which are strategically important, include finance, customers, internal processes, and learning.
BSC can be used at all levels of the company, from the overall group level and down to the individual employee.
Summarizing, BSC is a visual place where the different perspectives and points of measurement are calculated. Additionally, it functions as a form of control panel for management. The strategy map supports Balanced Scorecard reflecting the relationship between the perspectives and points of measurement.
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