While designing and developing dashboards for the client many of us might have come across the term Balanced Scorecard. Balanced Scorecard is a managerial instrument to translate the mission and vision of a company into measurable KPIs which could be tracked.
The performance management measures arrived at through the Balanced Scorecard methodology helps organizations track its over all improvement; these measures when made to achieve their targets translates into the whole organization achieving its mission goals and objectives.
Though, historically organizations had been tracking their performance against various yardsticks, Kaplan and Norton, two Harvard professors, are credited with lying the foundations of the modern Balanced Scorecard principle.
The BSC method as suggested by Kaplan and Norton helps to implement the performance management measures corresponding to a company's vision and strategy from four perspectives:
- Financial - Metrics to track the financial health of the company
- Internal Business Process - Metrics designed to track the internal business of a company and understand how well it is running.
- Learning and Growth - Metrics related to employee training and corporate self improvement programs
- Customer - metrics to track the level of customer satisfaction achieved by the company.
Before starting with the process of developing Balance Scorecards the organization must know the following things:
- it's mission statement
- its strategy / vision statement
- its financial status
- its internal business process
- the customer feedback / sentiment about the service or product provided by it
- expertise level of the employee