The document discusses the balanced scorecard, which is a strategic planning and management tool used to measure organizational performance beyond traditional financial measures. It provides a balanced view of an enterprise through four dimensions: learning and growth, internal business processes, customers, and financial performance. Each dimension contains specific metrics - learning and growth focuses on employee development, business processes evaluate operational efficiency and customer satisfaction, customers assess needs met and experience, and financial examines profitability. The balanced scorecard can be applied at various levels within an organization to align strategic goals.
2. WHAT IS THIS BALANCE SCORECARD?
BSC is used to manage enterprise performance through
the four dimensions that provide value to the enterprise;
Learning and growth, internal business processes,
customers and financial.
Simple example :
Bob’s company started a new business unit for their Data Centre business and
would like to know how the business is doing during the half yearly performance
review. How would Bob achieve this?
Balanced Scorecard is a Progress Report of an Enterprise
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3. WHAT DIMENSIONS ARE CONSIDERED IN BSC?
This strategic planning and management tool is used to set
targets for measuring the organisational performance in
future state. BSCs are outcome focused and provide a
balanced view of the enterprise by looking at four dimensions
Learning & growth
Business Process
Customer
Financial
B A A C A D E M Y 3
4. WHAT DIMENSIONS ARE CONSIDERED IN BSC?
Learning & growth : The Learning and Growth dimension
includes measures regarding employee training and
learning, product and service innovation, and corporate
culture
Metrics: use of training funds, mentoring, knowledge sharing, and
technology improvements.
Business Process: The Business Process dimension
includes metrics that indicate how well the enterprise is
operating and if their products meet customer needs.
Metrics: How well the enterprise is operating and if their products
meet customer needs
B A A C A D E M Y 4
5. WHAT DIMENSIONS ARE CONSIDERED IN BSC?
Customer : The Customer dimension includes metrics on
customer focus, satisfaction and delivery of value.
Metrics: How well customer needs are met, how satisfied they are
with products and services, whether the delivery of those products
and services meet their quality expectations, and their overall
experience with the enterprise.
Financial :The Financial dimension identifies what is
financially necessary to realize the strategy.
Metrics: Financial measures indicate profitability, revenue growth,
and added economic value.
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6. MEASURES & INDICATORS
Lagging Indicators : Provide results of actions already
taken. Objectives tend to have lagging indicators
Leading Indicators : Provide information about future
performance, leading indicators can provide more real-time
performance information
B A A C A D E M Y 6
7. BABOK 3.0 DEFINITION
The balanced scorecard is a strategic planning and
management tool used to measure organizational
performance beyond the traditional financial measures. It is
outcome focused and provides a balanced view of an
enterprise by implementing the strategic plan as an active
framework of objectives and performance measures.
Balanced business scorecards can be used at multiple levels
within an organization. This includes at an enterprise-wide
level (macro level), departmental or function level, and even at
the level of a project or initiative.
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9. B A A C A D E M Y 9
USAGE CONSIDERATIONS
Strengths
Facilitates holistic and balanced planning and thinking.
Short-, medium-, and long-term goals can be harmonized into programs with
incremental success measures
Strategic, tactical, and operational teams are more easily aligned in their work
Encourages forward thinking and competitiveness
Limitations
A lack of a clear strategy makes aligning the dimensions difficult.
Can be seen as the single tool for strategic planning rather than just one tool to
be used in a suite of strategic planning tools
Can be misinterpreted as a replacement for strategic planning, execution, and
measurement.
10. KNOWLEDGE TEST
Which dimension of the balanced scorecard would
contain measures pertaining to top line revenue growth
and overall profitability for the current fiscal year?
A) Learning and growth
B) Business process
C) Financial
D) Customer
B A A C A D E M Y 10
11. KNOWLEDGE TEST
Which dimension of the balanced scorecard would
contain measures pertaining to top line revenue growth
and overall profitability for the current fiscal year?
A) Learning and growth
B) Business process
C) Financial
D) Customer
B A A C A D E M Y 11
12. KNOWLEDGE TEST
What dimension of the scorecard would you focus
upon to ascertain how well the enterprise is operating
and if their products meet customer needs?
A) Learning and growth
B) Business process
C) Financial
D) Customer
B A A C A D E M Y 12
13. KNOWLEDGE TEST
What dimension of the scorecard would you focus
upon to ascertain how well the enterprise is operating
and if their products meet customer needs?
A) Learning and growth
B) Business process
C) Financial
D) Customer
B A A C A D E M Y 13
14. FEW IMPORTANT POINTS TO MEMORISE
The financial dimension focuses on profitability, revenue growth,
and monetary measures
The learning and growth dimension focuses upon employee
training and learning, product and service innovation, and
corporate culture
The customer dimension includes metrics on customer focus,
satisfaction and delivery of value
The business process dimension includes measures on operational
processes and if those processes produce customer value
The balanced scorecard includes tangible objectives, specific
measures, and targeted outcomes derived from an organization's
vision and strategy
Used at multiple levels within an organisation
B A A C A D E M Y 14
15. THANK YOU
B A A C A D E M Y 15
Durga Prasad CBAP® CSM®