Presentation on Balanced Scorecard

Presentation on Balanced Scorecard

Introduction

This paper intends to explore the use of balanced scorecard in making business decisions. The major focus is on working on the task assigned by my boss, which is to prepare a presentation document about Balanced score card and hoe the company SAC may adopt it. In addition to this, the core elements are discussed to have deep insight, such as the process of using the Balanced Score card and its benefits. Further, recommendations are made in the report in terms of adopting the balanced scorecard strategy in the company and the way it may improve the business performance.

Discussion

Balanced Score Card - Definition

The balanced score card is a management of strategic planning system, which is widely being used in organizations so that they could align their operational activities with their vision and mission. Further, it is also by government entities and other non profitable organizations. Moreover, Balanced score card also contributes in improving internal and external communications and further monitor the organizational performance that is not aligned with the goal (balancedscorecard.org).

Traditional concepts of evaluating the effectiveness of the company are based on the measurement and monitoring of purely financial indicators, which carry information about events that have already happened, and do not reflect the long-term investment opportunities and the state of relations with clients. Balanced Scorecard (BSC), supporting the measurement of financial performance, provides management of non-financial indicators that reflect the movement of the company to create its future value through investment in staff, optimization of business processes and technology, relationships with customers and suppliers. This broader view of management provides an objective picture of the company's analysis of opportunities for internal and external development and competitiveness.

Balanced Scorecard (BSC) defines four strategic areas, reflecting the outlook on the company:

As estimated by the Company's shareholders (financial perspective)

As estimated by the company customers (customer perspective)

What processes will provide a competitive advantage (the prospect of internal business processes)

Whether program innovation, development, motivation and growth (the prospect of learning and development)

Using Balanced Score Card

The dimensions of the BSC will be determined individually for each purpose and the organization. They include financial perspective, the customer perspective, the process perspective, and the potential employee perspective. On the basis of the strategy the shareholders and other stakeholders are also taken into account (eg, employees, suppliers). They are termed as critical success factors (CSFs) in calculating with Key Performance Indicators (KPI), which is a performance measurement system (scorecard). The variables represent the degree of fulfillment of the strategic objectives. In a continuous process and goals achievement are checked and controlled by corrective measures.

Constitutive element of a balanced scorecard is the cause and effect diagram. By the cause-effect relationships, the company's strategy with the customer's perspective is this. With the process logic and the reconnected measures at staff level the logic of dependencies leads almost automatically through all four desired view.

The dependencies can be determined easily by all affected targets and success drivers (objects) ...