Things to consider before implementing BSC
One of the greatest disadvantages of performance management was that this system paid attention to financial indicators only. Obsession with financial figure’s distracted business managers from such issues as relation to customers, optimization of internal processes in the company, analysis of employee performance, employee satisfaction, organization climate and many other important issues. It is very difficult to make correct plans and predictions as to the future situation in the market and development of the company. Financial indicators are the focus and the goal of the other factors that directly influence performance of a company.
Emergence of balanced scorecard system revived performance management by the inclusion of three other perspectives. Thus, the traditional set of categories consists of financial, customer, internal processes, learning and growth perspectives. These four perspectives aim to cover all processes is and things happening inside and outside the company and influencing co performance in the direct or indirect way.
The four BSC perspectives
Why is it important to measure business? In the modern business world stagnation means death. In the business stop developing it will be sown wiped out by competitors. But in order to develop one should know the plans. Operating a business without strategic plan is like running at night with your eyes closed. But it is especially important to link a strategy to the operational management. This is what Balanced Scorecard is especially good at.
So, what are the most important stages of BSC implementation? First and foremost, it is very important to find out whether or not the company is ready to implement balanced scorecard. It should be noted that BSC implementation is a lengthy process which requires considerable monetary and human resource investments. So, if a company does not have the personnel which will implement and work with balanced scorecard it is useless to start the entire process.
Implementation stages of BSC
When the decision to implement BSC is made the company should select key performance indicators to be evaluated. This will help measure progress and efficiency of strategic goals implementation. There should be a certain number of key performance indicators that each management of operational level. Balanced scorecard organizes these measures into a strategic map or strategy tree which visualizes company strategic goals and makes them easy to understand.
It is imperative to decide in what way the information will be collected, submit it, analyzed and in what way response actions will be taken. Only in such a way balanced scorecard will optimize performance of a company and approach it to strategic goals.
