BALANCED

SCORECARD
1990, KAPLAN & NORTON
 BALANCED SCORECARD (BSC)
 It is a conceptual framework tool for
performance management.
 Enabling an organization in clarifying its vision
and strategy, thus effectively translating them
into action.
 This approach provides feedback around both
the internal processes and external outcomes.
 It is focusing on four indicators:
 Customer Perspective
 Internal-Business Processes
 Learning and Growth
 Financials
 CONCEPT OF BSC
 It retains traditional financial measures
 But financial measures tell the story of past
events, for industrial age companies for which
investments in long-term capabilities and
customer relationships were not critical for
success.
 These financial measures are inadequate, for
guiding and evaluating the journey that
information age companies must make to
create future value through investment in
customers, suppliers, employees, processes,
technology, and innovation.
 APPROACH TO BSC

 It is an effort to improve business

processes, motivate and educate
employees, and enhance the
information systems, while
monitoring the project’s progress
toward the organization’s strategic
goals.
 INDICATORS OF BSC
 Customer Satisfaction, the approach analyzes
the organization’s ability to provide quality
goods and services and their effective delivery.
 financial perspective represents the clear long-
range targets.
 internal business processes provides data
regarding the internal business results against
its measures, in order to lead to the success of
the above two mentioned perspectives
 learning and growth- fourth perspective aims
to align all of the above toward an overall
organization’s success.
 FOUR PERSPECTIVES
 Financial: encourages the identification of a few
relevant high-level financial measures, that can
help inform the answer to the question "How do we
look to shareholders?"
 Customer: encourages the identification of
measures that answer the question "How do
customers see us?"
 Internal Business Processes: encourages the
identification of measures that answer the question
"What must we excel at?"
 Learning and Growth: encourages the identification
of measures that answer the question "Can we
continue to improve and create value?".
 USING THE BALANCED
SCORECARD TO
TRANSFORM NOVA SCORTIA
CONSULTING
WHAT IS A BALANCED SCORECARD?

BSC is a measurement tool

• It allows the organization to assess progress
in implementing strategy
• It allows the organization to benchmark its
progress against great practices outside and
inside the organization, and over time
• It provides a diagnostic framework for
tracking relationships and impact among
strategies
WHAT KINDS OF CAPITAL CREATE
ORGANIZATIONAL VALUE?
• Physical Capital
• Financial Capital
………… traditionally what you see on the
balance sheet

Here’s what you don’t see on the

balance sheet ……………………
WHAT KINDS OF CAPITAL CREATE
ORGANIZATIONAL VALUE?
• Human Capital – the collective skills,
knowledge, attitudes and behavior of the
people in your organization
• Information Capital – the resources and
processes in place that ensure effective use
of the human capital
• Organizational Capital – the values, working
relationships and cultural norms at work in
the organization