Business Analysis Toolkit

Every business comes to a serious question that a certain time of its development.  This question is “What is next?” This means that the company should know what it will do in future and in what direction it will move?  There are many factors influencing well being of the company, both inside the company and outside.  Markets are volatile, and any changes in the market conditions should necessarily result in changes inside the company, of course if the company wants to be successful.  Strategic vision helps the company allocate Financial Resources in an efficient way.  As a rule, strategic goals cover global projects.  Earning a certain amount of money may not necessarily be a strategic goal.  For example, gaining and a larger market share or proper positioning of the company in the market may be considered typical examples of strategic goals.

Balanced Scorecard cycle

Any company should control and monitor the process of implementing strategic goals.  If the company management looks only at financial indicators it doesn’t get the full view.  Financial success he’s gained through effective production and operational management.  That’s why there are special systems to measure business performance and link strategic and operational management.

Balanced scorecard is known as one of the most effective systems that connects strategic goals with operational management, evaluates business performance and key performance indicators, visualizes strategic goals and creates strategy maps.  Balanced scorecard is an effective tool that helps company management and personnel better understand strategic goals.  However, there is often and misconception that balanced scorecard is a magic tool that can turn any business into a successful company.  This is not so.

When a company needs BSC

It is very important to understand whether not the company needs balanced scorecard.  There are several factors pointing to the necessity of using balanced scorecard, namely:

1. The company doesn’t have a comprehensive strategy
2. The company management does not the dissipating strategic planning of is a poor understanding of strategic plans
3. There is no operational control in the company
4. There is a poor communication system between departments of the company or between companies belonging to one holding

Of course this is not the full list of these factors vividly demonstrate that the company needs balanced scorecard.  It should be noted that implementation of balanced scorecard is an expensive and lengthy process.  So, any mistake may cause the entire system fail which will make balanced scorecard be useless pile of documents, datasheets, maps and graphs.