Business Process Management (Process) (Grade 7.3)

BPM 2
What is a Balance Scorecard?

 Developed by (Robert) Kaplan & (David) Norton: ‘Are the originators of the Balanced Score
Card: a strategic management tool that links a company's current actions with its long-term
goals”.
 Popular business tool which aligns different dimensions of business strategy
 Creates a strong link between financial goals and other parts of the company strategy
 Developed to include ‘metrics’ to check that company objectives are being met



What is the goal of the BSC?  To measure and provide feedback to organization




Advantages of the Balance Scorecard

 Broader view of business performance
 Links performance measurements to long-term (mission & vision)
 Involves everyone in the business
 Highly flexible



Drawbacks of the Balanced Scorecard

 Danger of too many KPIs
 Need to have balance between the four perspectives
 Senior management may still be too concerned with financial performance
 Needs to be updated regularly to be useful

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