Implementing Balanced Scorecards in XXXXX Council
This report examines how the Balanced Scorecard could be implemented in XXXXX Council, and what the benefits and problems of implementing it would be. The report also outlines what complimentary processes could be implemented to support the Balanced Scorecard. Explicit use is made of the lessons learned from the Implementation of the Balanced Scorecard at Halifax PLC.
Recommendations
The Balanced Scorecard has the potential to provide numerous benefits to XXXXX Council although the Implementation of the Balanced Scorecard would be complex and would face several difficulties.
The Council should pilot the BSC in one service area and then assess its suitability to roll out to the rest of the Council. If the BSC is implemented it should be reviewed on a regular basis to ensure it remains fit for purpose.
2.0 The Balanced Scorecard
The Balanced Scorecard (BSC) was developed by Kaplan and Norton as a performance management tool and was intended to assist organizations look beyond financially weighted Performance Management Systems. Their underlying premise was ‘what you measure is what you get’. (Fenton–O’Creevy, 2003, pp 14-7).
The intention of the BSC was to include other indicators that contribute towards strategic success into the organizations performance management system. Kaplan and Norton saw the over reliance of financial indicators as too simplistic a view of organization performance.
By including financial and non-financial indicators, organizations can manage the inter-relationships between activities more effectively. Kaplan et al explained that the performance indicators included in the BSC needed to be linked to strategic goals (Fenton–O’Creevy, 2003, pp 14-6). This ensures activities are aligned with strategic goals and helps employees see how they ‘fit in to the bigger picture’.
Norton and Kaplan advised that four different perspectives should be included in the BSC. These perspectives are, innovation and learning, internal processes, the customer and the financial perspective. Norton and Kaplan advised these perspectives should be modified based on the needs of the organization
Halifax articulated the relationship between the different segments of the scorecard well in their implementation of the balanced scorecard i.e. the Z approach ‘the right people (innovation and learning), doing the right things (processes) making the customer happy (customer perspective) generating income (financial perspective).
Fig 1.0 illustrates how the relationship between the perspectives and how they should align with strategic goals.
The balanced scored card has proved popular in the private sector because it helps an organization focus on some of the critical success factors which lead to financial performance.
With the goals of 2010 in mind, it is important for the AHA to be able to measure the actions of their employees and ensure the alignment of their behaviors with the strategic goals of the association. The Balance Score Card developed below serves as universal tool to do just that, but also sends a message to leaders and employees across the association that this is the new strategic direction the association will be moving, and this is it will be mapped and measured to ensure we reach our goals for 2010.
The Balanced Scorecard is a business strategic planning system used by management to make decisions based on information provided about the business from four different perspectives. The first of the four perspectives is the financial perspective. Which means that we evaluate our business and conduct research from the shareholders perspective. Next is the internal business perspective, which is an internal evaluation of what the business must be good at to excel. Next is the innovation and learning perspective which is an evaluation of the firm’s ability to continue to improve and create value. The final perspective is the customer perspective, which is looking at the business activities from the customers
This part of the assignment will discuss balanced scorecard that has been implemented by UK National Health Service (NHS), how it has influenced and impacted upon the performance measures of this organisation.
measures" (Ball, Harbor, Moore, Verlaan-Cole, 2003). The balanced scorecard is organized into four perspectives: financial, customer,internal processes and learning and growth" (Ball, 2003).
Tapinos, E., Dyson, R.G. & Meadows, M. (2005). The impact of performance measurement in strategic planning. International Journal of Productivity and Performance Management, 54(5/6), 370-384.
Balanced scorecards are a tool a nurse leader can use in strategic planning to assess how the organization is meeting its strategic goals and objectives. It allows for a well-rounded analysis of four different metrics: fiscal measures, customers, processes and learning and growth (Marquis & Huston, 2015). The intention of a balanced scorecard is to help “organizations set strategic goals, allocate resources, set priorities for process tasks (operations), and evaluate progress and strategy effectiveness” (Sare & Ogilvie, 2010, p. 158). Appendix A outlines the balanced scorecard for this planned change.
In the mid 1980s, and into the 1990s, business leaders realized that a renewed focus on quality was required to continue to compete in an expanding global market. (NIST, 2010) Consequently, several strategic frameworks were developed for managing, and measuring organizational performance. Among them were the Malcomb Baldrige National Quality Award, which was created by and act of congress and signed into law by the President in 1987, and The Balanced Scorecard, which is a performance management tool that was born out of research conducted in the late 1980s and early 1990s by Robert S. Kaplan, and David P. Norton published in 1996 (Kaplan, 1996). Initially the renewed emphasis on quality management systems was a reaction to the LEAN approach
(2014). Strategic performance management systems: impact on business results. Journal Of Computer Information Systems, 54(3), 25-33.
This perspective is concerned with the exploitation of emerging IT capabilities to impact new products and services (business scope), influence the key attributes of strategy (distinctive competencies) and develop new forms of relationships (business governance).
The Balanced Scorecard was developed out of a belief that traditional ways of thinking that relied primarily on financial accounting measures were becoming obsolete. As the developers explained, so as to appreciate sustainable growth and organizational success in the future, an organization should:
A Balanced Scorecard can be defined as a “performance management tool which began as a concept for measuring whether the smaller-scale operational activities of a company are aligned with its larger-scale objectives in terms of vision and strategy” (Wikipedia 2009, ¶ 1). Scents & Things will need to develop a balanced scorecard that will assist in meeting and help define the company’s values, mission, vision, and SWOT analysis. The balance scorecard is made up of four perspectives; financial, customer, learning and growing, and internal process. This paper will define each of the four perspectives objectives, performance measures, targets, and initiatives. The paper will also show how the perspectives relate to Scents & Things vision, mission, values, and SWOTT analysis.
The balanced scorecard was introduced by Robert Kaplan, a professor at Harvard University, and David Norton in 1990. The concept was later adopted for a study on new methods to measure performance involving multiple organizations. The balanced scorecard enables organizations to measure performance by providing balance to the financial perspective. Organizations used to measure performance by measuring only the financial measurements and this did not reflect the true performance of the organization. The BSC methodology includes information about the operational measures which gives the management a clearer picture that makes it easier for organizations to plan for short and long term goals.
Life is all about setting goals and trying to achieve them. The same theory also applies in the managerial industry. The accomplishment of desired results in a business is called performance. One of the major concerns of the top managers of a firm is the actual performance of the firm so its measurement is unavoidable.
The first aspect of the balanced scorecard is the financial perspective, which is responsible for answering the following questions: “To succeed financially, how should we appear to our shareholders?” Our finance objective for Google is to increase net revenue. Google’s revenue has shown a steady growth over the years. Google’ s revenue in 2011 was 37,905,000 and in 2012 it was 50,175,000. In one year, Google manage to exceed its 2011 revenue by 12,270,000. Google, is currently in their fourth quarter of 2013. Each quarter’s revenue in 2013 is noticeably greater than the quarters in 2012. In the third quarter of 2013, Google generated total revenues of 14,893,000, compared to 2012 third quarter of 13,304,000
At the same time a balance score card intergraded with Accounting Information System allows the companies to collect rightfull information, analyse the data and make evidence based decisions. (Marr, 2010).