Business Process

Business Process

Customer Perspective

The balanced scorecard (BSC) is an organizational measurement and management system that links strategy to financial and nonfinancial objectives. The BSC measures organizational performance across four perspectives: financial, customer, internal process, and learning and growth. Executives translate the organization's vision and strategy into linked objectives and measures in the four balanced scorecard perspectives (Kaplan, 2001).

he customer perspective typically includes several generic measures—customer satisfaction, customer retention, new customer acquisition, and market and account share in targeted segments—of the successful outcomes from a well-formulated and implemented strategy. It should also include value proposition measures. Typical customer perspective measures include patient satisfaction surveys, referrals by physicians, number of patient complaints, and presence on preferred provider lists.

he customer perspective points out the means for developing customer and marked preferences and identifies dimensions of the product or service that may meet the value proposition of target customers. The process perspective is a value chain involving questions about production, sales, and distribution facilities. Last, the learning and growth perspective is concerned more generally with organizational capabilities such as infrastructure and intangible assets.

The causality claimed in BSC has been much studied, and there is evidence that customer satisfaction, market share, customer loyalty, and profitability correlate (see, for example, Davis and Albright's 2004 study). However, causality is not only a solution but also a problem. Loyal customers are not always more profitable than disloyal ones, as noted by Reinartz and Kumar in 2000, and sometimes no systematic relation between BSC usage and financial performance can be found, as noted by Ittner and colleagues in 2003. It can be claimed that the four factors are too generic to allow precise correlations between them, and that they lack the detail necessary to make specific recommendations in the specific firm, and therefore the statistical studies may not capture the ...