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Balanced Scorecard

Balanced Scorecard. IT portfolio management - IT portfolio management vs. balanced scorecard.

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Balanced Scorecard

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  1. Balanced Scorecard https://store.theartofservice.com/the-balanced-scorecard-toolkit.html

  2. IT portfolio management - IT portfolio management vs. balanced scorecard • The biggest advantage of IT portfolio management is the agility of the investment adjustments. While balanced scorecards also emphasize the use of vision and strategy in any investment decision, oversight and control of operation budgets is not the goal. IT portfolio management allows organizations to adjust the investments based upon the feedback mechanism built into the IT portfolio management. https://store.theartofservice.com/the-balanced-scorecard-toolkit.html

  3. Balanced Scorecard • The 'balanced scorecard' ('BSC') is a strategy performance management tool - a semi-standard structured report, supported by design methods and automation tools, that can be used by managers to keep track of the execution of activities by the staff within their control and to monitor the consequences arising from these actions.[http://www.2gc.eu/survey 2GC Balanced Scorecard Usage Survey] https://store.theartofservice.com/the-balanced-scorecard-toolkit.html

  4. Balanced Scorecard - Characteristics • The balanced scorecard also gives light to the company's vision and mission https://store.theartofservice.com/the-balanced-scorecard-toolkit.html

  5. Balanced Scorecard - Characteristics • As a model of performance, the balanced scorecard is effective in that it articulates the links between leading inputs (human and physical), processes, and lagging outcomes and focuses on the importance of managing these components to achieve the organization's strategic priorities.Abernethy, M.A., Horne, M.H., Lillis, A.M., Malina, M.A. and Selto, F.H., 2005, A multi-method approach to building causal performance maps from expert knowledge p. 136. https://store.theartofservice.com/the-balanced-scorecard-toolkit.html

  6. Balanced Scorecard - Characteristics • Clearly these categories were not so relevant to non-profits or units within complex organizations (which might have high degrees of internal specialization), and much of the early literature on balanced scorecard focused on suggestions of alternative 'perspectives' that might have more relevance to these groups. https://store.theartofservice.com/the-balanced-scorecard-toolkit.html

  7. Balanced Scorecard - Characteristics • 'Communicating and Controlling Strategy: An Empirical Study of the Effectiveness of the Balanced Scorecard.', Journal of Management Accounting Research, Vol https://store.theartofservice.com/the-balanced-scorecard-toolkit.html

  8. Balanced Scorecard - History • 1993 In 1996, they published the book The Balanced Scorecard.The Balanced Scorecard: Translating Strategy into Action, Harvard Business School Press, Boston (1996) These articles and the first book spread knowledge of the concept of balanced scorecard widely, and has led to Kaplan and Norton being seen as the creators of the concept. https://store.theartofservice.com/the-balanced-scorecard-toolkit.html

  9. Balanced Scorecard - History • However it should be noted that none of these influences is explicitly linked to original descriptions of balanced scorecard by Schneiderman, Maisel, or Kaplan Norton. https://store.theartofservice.com/the-balanced-scorecard-toolkit.html

  10. Balanced Scorecard - History • Their second book, The Strategy Focused Organization, echoed work by others (particularly in ScandinaviaPerformance Drivers: A practical guide to using the Balanced Scorecard, Nils-Goran Olve, JanRoy, Magnus Wetter https://store.theartofservice.com/the-balanced-scorecard-toolkit.html

  11. Balanced Scorecard - Design • Design of a balanced scorecard ultimately is about the identification of a small number of financial and non-financial measures and attaching targets to them, so that when they are reviewed it is possible to determine whether current performance 'meets expectations' https://store.theartofservice.com/the-balanced-scorecard-toolkit.html

  12. Balanced Scorecard - Design • The original thinking behind a balanced scorecard was for it to be focused on information relating to the implementation of a strategy, and, perhaps unsurprisingly, over time there has been a blurring of the boundaries between conventional strategic planning and control activities and those required to design a Balanced Scorecard. This is illustrated well by the four steps required to design a balanced scorecard included in 'Kaplan Norton's' writing on the subject in the late 1990s: https://store.theartofservice.com/the-balanced-scorecard-toolkit.html

  13. Balanced Scorecard - Design • In particular, it is common for people to refer to a strategic linkage model or strategy map as being a balanced scorecard. https://store.theartofservice.com/the-balanced-scorecard-toolkit.html

  14. Balanced Scorecard - Design • Although it helps focus managers' attention on strategic issues and the management of the implementation of strategy, it is important to remember that the Balanced Scorecard itself has no role in the formation of strategy. In fact, balanced scorecards can comfortably co-exist with strategic planning systems and other tools. https://store.theartofservice.com/the-balanced-scorecard-toolkit.html

  15. Balanced Scorecard - Original design method • Although less common, these early-style balanced scorecards are still designed and used today. https://store.theartofservice.com/the-balanced-scorecard-toolkit.html

  16. Balanced Scorecard - Original design method • In short, early-style balanced scorecards are hard to design in a way that builds confidence that they are well designed. Because of this, many are abandoned soon after completion.Epstein M J and Manzoni J F (1997). ‘The Balanced Scorecard Tableau de Bord: A Global Perspective on Translating Strategy into Action’, INSEAD Working Paper 97/63/AC/SM https://store.theartofservice.com/the-balanced-scorecard-toolkit.html

  17. Balanced Scorecard - Improved design methods • [http://2gc.eu/files/resources/2GC-WP-Dev3rdGenBSC-090311.pdf The Development of the Balanced Scorecard as a Strategic Management Tool.] Performance Measurement Association 2002 approach adopted for balanced scorecard since its introduction. https://store.theartofservice.com/the-balanced-scorecard-toolkit.html

  18. Balanced Scorecard - Improved design methods • Several design issues still remain with this enhanced approach to balanced scorecard design, but it has been much more successful than the design approach it superseded. https://store.theartofservice.com/the-balanced-scorecard-toolkit.html

  19. Balanced Scorecard - Improved design methods • the results based management method proposed by the UN in 2002) represent a tangibly different design approach to those that went before, and have been proposed as representing a 3rd generation design method for balanced scorecard. https://store.theartofservice.com/the-balanced-scorecard-toolkit.html

  20. Balanced Scorecard - Improved design methods • NGO's and government departments have found the 3rd generation methods embedded in results based management more useful than 1st or 2nd generation design methods).[http://2gc.eu/files/resources/2GC-CP-BSCRBM-090216.pdf Gavin Lawrie, Dirk Kalff and Henrik Andersen (2005), Balanced Scorecard and Results- Based Management - Convergent Performance Management Systems, Proceedings of 3rd Annual Conference on Performance Measurement and Management Control, The European Institute for Advanced Studies in Management (EIASM), Nice, France] https://store.theartofservice.com/the-balanced-scorecard-toolkit.html

  21. Balanced Scorecard - Improved design methods • Developing a Territory Balanced Scorecard approach to manage projects for local development: Two case studies https://store.theartofservice.com/the-balanced-scorecard-toolkit.html

  22. Balanced Scorecard - Popularity • In 1997, Kurtzman found that 64 percent of the companies questioned were measuring performance from a number of perspectives in a similar way to the balanced scorecard. Balanced scorecards have been implemented by government agencies, military units, business units and corporations as a whole, non-profit organisations, and schools. https://store.theartofservice.com/the-balanced-scorecard-toolkit.html

  23. Balanced Scorecard - Popularity • Why Balanced Scorecards fail, Journal of Strategic Performance Measurement, January, Special Edition 6 Managers did not trust, and so failed to engage with and use, these measure suites created by people lacking knowledge of the organisation and management responsibility. https://store.theartofservice.com/the-balanced-scorecard-toolkit.html

  24. Balanced Scorecard - Variants, alternatives and criticisms • 69 Issue 1, p18, Charles Hannabarger, Frederick Buchman, and Peter Economy (2007) Balanced Scorecard Strategy for Dummies Wiley Publishing, Inc https://store.theartofservice.com/the-balanced-scorecard-toolkit.html

  25. Balanced Scorecard - Variants, alternatives and criticisms • (1999 - English translation, 1st published in Swedish 1997); Performance Drivers: A practical guide to using the Balanced Scorecard, Wiley, UK.) constitute the 2nd Generation of Balanced Scorecard design; and designs that augment the strategy map / strategic linkage model with a separate document describing the long-term outcomes sought from the strategy (the destination statement idea) comprise the 3rd generation balanced scorecard design. https://store.theartofservice.com/the-balanced-scorecard-toolkit.html

  26. Balanced Scorecard - Criticism • (2000), The balance on the Balanced Scorecard - a critical analysis of some of its assumptions, Management Accounting Research, 11, pp https://store.theartofservice.com/the-balanced-scorecard-toolkit.html

  27. Balanced Scorecard - Criticism • Typically, however, the unanswered question relates to things outside the scope of balanced scorecard itself (such as developing strategies).e.g https://store.theartofservice.com/the-balanced-scorecard-toolkit.html

  28. Balanced Scorecard - Criticism • More modern design approaches such as 3rd Generation Balanced Scorecard and the UN's Results Based Management methods explicitly consider the interests of wider stakeholder groups, and perhaps address this issue in its entirety.[http://2gc.eu/files/resources/2GC-CP-BSCRBM-090216.pdf Gavin Lawrie, Dirk Kalff and Henrik Andersen (2005), Balanced Scorecard and Results- Based Management - Convergent Performance Management Systems, Proceedings of 3rd Annual Conference on Performance Measurement and Management Control, The European Institute for Advanced Studies in Management (EIASM), Nice, France ] https://store.theartofservice.com/the-balanced-scorecard-toolkit.html

  29. Balanced Scorecard - Criticism • The Balanced Scorecard: A Necessary Good or an Unnecessary Evil? European Management Journal, Vol.17, No.5, Malina, M.A., Selto, F.H., (2001), Communicating and Controlling Strategy: An Empirical Study of the Effectiveness of the Balanced Scorecard, Journal of Management Accounting Research, Vol https://store.theartofservice.com/the-balanced-scorecard-toolkit.html

  30. Balanced Scorecard - Balanced Scorecard used for incentive based pay • A common use of balanced scorecard is to support the payments of incentives to individuals, even though it was not designed for this purpose and is not particularly suited to it.[http://v6dev.2gc.org/pdf/2GC-FAQ01-090216.pdf FAQ Answer: What is the Balanced Scorecard?] https://store.theartofservice.com/the-balanced-scorecard-toolkit.html

  31. Balanced Scorecard - The four perspectives • These 'prompt questions' illustrate that Kaplan and Norton were thinking about the needs of small to medium sized commercial organizations in the USA (the target demographic for the Harvard Business Review) when choosing these topic areas. They are not very helpful to other kinds of organizations, and much of what has been written on balanced scorecard since has, in one way or another, focused on the identification of alternative headings more suited to a broader range of organizations. https://store.theartofservice.com/the-balanced-scorecard-toolkit.html

  32. Balanced Scorecard - Measures • The balanced scorecard is ultimately about choosing measures and targets https://store.theartofservice.com/the-balanced-scorecard-toolkit.html

  33. Balanced Scorecard - Software tools • It is important to recognize that the balanced scorecard by definition is not a complex thing - typically no more than about 20 measures spread across a mix of financial and non-financial topics, and easily reported manually (on paper, or using simple office software). https://store.theartofservice.com/the-balanced-scorecard-toolkit.html

  34. Balanced Scorecard - Software tools • The processes of collecting, reporting, and distributing balanced scorecard information can be labor intensive and prone to procedural problems (for example, getting all relevant people to return the information required by the required date). The simplest mechanism to use is to delegate these activities to an individual, and many Balanced Scorecards are reported via ad-hoc methods based around email, phone calls and office software. https://store.theartofservice.com/the-balanced-scorecard-toolkit.html

  35. Balanced Scorecard - Software tools • In more complex organizations, where there are multiple balanced scorecards to report and/or a need for co-ordination of results between balanced scorecards (for example, if one level of reports relies on information collected and reported at a lower level) the use of individual reporters is problematic. Where these conditions apply, organizations use balanced scorecard reporting software to automate the production and distribution of these reports. https://store.theartofservice.com/the-balanced-scorecard-toolkit.html

  36. Balanced Scorecard - Software tools • Recent surveys2GC Limited, 2GC Balanced Scorecard Usage Surveys 2009, 2010, 2011, 2012, 2013 [http://www.2gc.eu/survey] have consistently found that roughly one third of organizations used office software to report their balanced scorecard, one third used software developed specifically for their own use, and one third used one of the many commercial packages available. https://store.theartofservice.com/the-balanced-scorecard-toolkit.html

  37. Third generation balanced scorecard • In business performance management, a 'third-generation balanced scorecard' is a version of the traditional balanced scorecard, a structured report, supported by proven design methods and automated tools, that can be used by managers to keep track of the execution of activities by the staff within their control, and to monitor the consequences arising from these actions. https://store.theartofservice.com/the-balanced-scorecard-toolkit.html

  38. Third generation balanced scorecard • The third-generation version was developed in the late 1990s to address design problems inherent to earlier generations It is distinguished by the components making up the balanced scorecard and the design process used to develop these components. https://store.theartofservice.com/the-balanced-scorecard-toolkit.html

  39. Third generation balanced scorecard - Components of a third-generation balanced scorecard • A third-generation balanced scorecard has four main components: https://store.theartofservice.com/the-balanced-scorecard-toolkit.html

  40. Third generation balanced scorecard - Components of a third-generation balanced scorecard • *A destination statement. This is a one or two page description of the organisation at a defined point in the future, typically three to five years away, assuming the current strategy has been successfully implemented. The descriptions of the successful future are segmented into Balanced scorecard#Improved design methods|perspectives for example financial Stakeholder (corporate)|stakeholder expectations, customer external relationships, processes activities, organisation culture https://store.theartofservice.com/the-balanced-scorecard-toolkit.html

  41. Third generation balanced scorecard - Design process for a third-generation balanced scorecard • The managers themselves, not external experts, make all decisions about the balanced scorecard content https://store.theartofservice.com/the-balanced-scorecard-toolkit.html

  42. Third generation balanced scorecard - Design process for a third-generation balanced scorecard • The main apparent improvements with this third generation of balanced scorecard relate to the greater relevance of the strategic Objective (goal)|objectives, because objectives are selected in the context of the organisation’s longer-term strategic goals, using a destination statement, and the greater “ownership” of the objectives by managers, because objectives are selected and defined by the responsible managers themselves. https://store.theartofservice.com/the-balanced-scorecard-toolkit.html

  43. For More Information, Visit: • https://store.theartofservice.com/the-balanced-scorecard-toolkit.html The Art of Service https://store.theartofservice.com

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