Balanced scorecards definition

04/10/2009

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Balanced scorecards strive to present an immediately comprehensible picture of a complete organizational strategy. This approach recognizes that the different aspects of a business all influence each other. A Balanced Scorecard examines performance from several critical perspectives. Typically, a Balanced Scorecard depicts four different perspectives:

  • Financial perspective   Financial metrics portray the economic results of previous business decisions and actions. Financial metrics generally lag behind actions, and therefore might not necessarily reflect the business as it is run today. However, financial metrics often determine whether a particular strategy is successful.
  • Internal Process perspective   The operational perspective reflects the internal business processes that support the strategy. They might include processes related to financial collections, safety in manufacturing, or product development. Typically, customers might not notice these processes directly, but business must excel at these processes to succeed.
  • Customer perspective   The customer perspective includes sales, because sales focuses on how the customers perceive the business. Because customer perception is affected by many business activities, this perspective is often a good general performance indicator. For example, it is affected by such things a product quality, delivery reliability, help-desk responsiveness and competency, and how the customer perceives the company. If your customers perceive your performance negatively, you might have to make adjustments in other perspectives.
  • Learning and Growth perspective   The learning and growth perspective covers the human infrastructure of the organization. It addresses performance indicators that concern employees, systems, and organizational procedures. Metrics in this perspective frequently highlight topics such as employee skills, work satisfaction, systems that employees use to perform their jobs, and organizational procedures.

 

Using the Performance Point Services allow us to benefit all this perspectives with a relative low cost effort.

For more information http://www.microsoft.com/bi/

Bye,

Ronen

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