• Balanced Score Card

    The Balanced Scorecard (BSC) is a widely used strategic performance management tool for analyzing the proper alignment of the small operational activities with the company’s main vision, strategy and business objectives. By focusing not only on financial outcomes but also on the operational, marketing and developmental inputs to these, the Balanced Scorecard helps to provide a more comprehensive strategic analysis of a company.

    Design of a Balanced Scorecard is mainly about identifying small number of financial and non-financial parameters which can help to conduct strategic performance management. By checking all the small parameters and key points, we can easily identify their current performance and whether they are meeting the expectations or not. If there are any deviation from the expected results, Company managers have to focus more on those key parameters and have to come up with a solution for improved performance.

    The balanced scorecard suggests that we view the organization from four perspectives, and to develop metrics, collect data and analyze it relative to each of these perspectives

    • Financial Perspective – Indicates the financial parameters and financial measures on the context of “What do the investors and shareholders think of us?”
    • Customer – Indicates the main parameters from the customer perspective. It identifies the measures based on the question “What does the customer think about us?”
    • Internal Business Processes – Indicates the measures that answer the question “How to improve internal efficiency and profit margin?”
    • Learning and Growth – Indicates the measures that answer the question “Can we continue to learn and create growth for the company?”

    Benefits of Balanced Scorecard

    Balanced Score Card is mainly used for strategic performance management tool which helps to analyze the performance of for some key financial and operational activities. It offers the benefits

    • Translating the vision and long term objectives into smaller operational goals which can be achieved easily over the time
    • Increase focus on strategy and long term goal
    • Improve services offered to client and increases client satisfaction
    • Revisits the existing strategy through proper feedback and analysis; which enables periodic review and modification if necessary
    • Improve organizational performance by measuring affecting profitability of different KPIs
    • Improve learning and knowledge management inside the organization
    • Focus on the key drivers and key parameters to improve performance and increase growth
    • Prioritize Projects or tasks based on long term objectives

    One Sample Balanced Score card for one Financial Institution

    Balanced Score Card

    Planning a strategy is relatively easier than successfully implementing the same. Successful implementation of a strategy needs more attention and efforts to achieve the desired result.

    Business processes face lots of hurdles in terms of current issues, employee dissatisfaction, improper policies etc. All these hurdles can be overcome by efficient use of proper improvement and analysis methodology including “Balance Score Card”. Finally the successful implementation of performance management is done by the companies with very high level of maturity in using existing information and different strategic tools.

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