Introduction to the BSC
An organization's measurement system strongly affects the behavior of people both inside and outside the organization. If companies are to survive and prosper in information age competition, they must use measurement and management systems derived from their strategies and capabilities. Unfortunately many organizations advocate strategies about customer relationships, core competencies and measuring performance only with financial measures. Robert Kaplan and David Norton recognizing some of the weaknesses and vagueness of these traditional performance measurment approaches. They have deleveoped a Balanced Scorecard (BSC) model to tackle those issues. BSC approach provides a clear prescription as to what companies should measure in
BSC introduced four different perspectives from which a company's activity can be evaluated and measured:1. It provides feedback around both the internal business processes and external outcomes in order to continuously improve strategic performance and results. System can be measures by real-time availability of accurate, critical customer and internal process information to employees on the front lines of decision making and actions. BSC concept supports strategic planning and implementation by federating the actions of all parts of an organization around a common understanding of its goals, and by facilitating the assessment and upgrade of strategy. Internal processes have the greatest impact on customer satisfaction and achieving an organization's financial objectives. It retains financial measurement as critical summary of managerial and business performance, moreover it highlights a more general and integrateed set of measurement that link ccustomers, internal process, employee, and system performance to long-term financial success. Companies need to replace any specific or narrow focus with a comprehensive view in which strategy is critical to the management systems. Those measures are constructed that aid target-setting and performance measurement in areas critical to the strategies. BSC provide the organizations with a comprehensive framework that translates vision and strategy into action. But each represents only one element in the network of management activities and processes that must be performed to generate superior, sustainable performance. order to 'balance' the financial perspective. Financial perspective How do we perceive our shareholders? Financial objectives typically relate to profitability measure, for instance operating income, ROCE, economic value-added. Each of these perspectives is important and can play a role in creating value in organizations.
Common topics in this essay:
Scorecard BSC,
Business Process,
Introduction BSC,
David Norton,
internal process,
organizational procedures,
critical customer,
comprehensive view,
financial objectives,
customer satisfaction,
financial perspective,
measurement critical,
internal business,
management systems,
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