Professional Documents
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Earlier measurements focused mainly on financial measures The balanced scorecard is a strategic management system (not only a measurement system)
Internal assessment, improvement and reporting system Key is the link to the strategic plan
The balanced scorecard retains traditional financial measures. But financial measures tell the story of past events, an adequate story for industrial age companies for which investments in long-term capabilities and customer relationships were not critical for success. These financial measures are inadequate, however, 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 Kaplan & Norton innovation.
Business Planning
Integration of functions so that budgets support long term goals
Perspectives
The balanced scorecard suggests that we view the organization from four perspectives:
The learning growth perspective The business process perspective The customer perspective The financial perspective
Develop metrics, collect data and analyze relative to each of these perspectives
Financial Perspective
Indicates if the transformation of strategy leads to economic success Define the financial performance that the strategy is to achieve
Revenue growth Cost reduction
Cost reduction from energy efficiency
Movements in the metrics must be analyzed to identify their causes Causes that produce positive (negative) changes must be sustained or enhanced (eliminated)