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Custodio, Pearl Joyce B.

March 10, 2017

How to use the Balanced Scorecard

The Balanced Scorecard is a concept helping you translate strategy into action. the Balanced Scorecard starts from the company vision and strategies, from here critical
success factors are defined. Measures are constructed that aid target setting and performance measurement in areas critical to the strategies.

Implementation of the scorecard generally begins at the corporate level, but is usefull at all levels of an organization. The scorecard is not only an executive information system
for corporate management but should form the basis for promoting behavioural change in the organisation to conform with the vision and strategy. Often this means pushing the
scorecard methodology down through the organisation.

1. The Customer Perspective

Recent management philosophy has shown an increasing realization of the importance of customer focus and customer satisfaction in any business. These are leading
indicators: if customers are not satisfied, they will eventually find other suppliers that will meet their needs. Poor performance from this perspective is thus a leading indicator of
future decline, even though the current financial picture may look good. In developing metrics for satisfaction, customers should be analyzed in terms of kinds of customers and
the kinds of processes for which we are providing a product or service to those customer groups.

2. The Financial Perspective

As with the traditional methodologies, measuring need financial data. But the point is that the current emphasis on financials leads to the "unbalanced" situation with regard to
other perspectives. Timely and accurate funding data will always be a priority, and managers will do whatever necessary to provide it. In fact, often there is more than enough
handling and processing of financial data. There is perhaps a need to include additional financial-related data, such as risk assessment and cost-benefit data, in this category.

3. Processes Perspective

This perspective refers to internal business processes.


Metrics based on this perspective allow the
managers to know how well their business is
running, and whether its Create a Balanced Scorecard: products and services
conform to customer requirements and fulfills the
mission. These metrics have to be carefully
designed by those who You have to identify a vision. Where is the organization going? know these processes most
intimately; with missions being unique this definition
can not entirely be developed by outside
consultants. In addition to By identifying strategies you tell how you will get there. the strategic management
process, two kinds of business processes may be
identified: 1) mission- oriented processes, and 2)
support processes. Define perspectives, which means you have to ask what do we have to do well in each Mission-oriented processes
are business-related perspective. special functions, and many
unique problems are encountered in these
processes. The support processes are more
repetitive in nature, and Identify the Critical Success Factors - when enough is enough, and when not. hence easier to measure and
benchmark using generic metrics.

Thereafter ask how do we measure that everything is going the expected way?
4. The Innovation Perspective

Now it is necessary think of the evaluation of your Scorecard. Consider how do secure
This perspective includes that the right things are measured. employee training and
corporate cultural attitudes related to both individual and
corporate self- improvement. In the current
climate of rapid Based on this work you should create action plans and plan reporting and operation of technological change, it is
becoming necessary for the Scorecard. knowledge workers to be in a
continuous learning mode. The importance of learning
and growth has to be considered. A knowledge-
worker organization often How will the Balanced Scorecard be managed? Which persons should have reports and find themselves unable to
hire new technical workers what should they look like? and at the same time is
showing a decline in training of existing
employees. This is a leading indicator of 'brain
drain' that must be reversed. People are the
only repository of knowledge - they are the
main resource. Metrics can be put into place to
guide managers in focusing training funds
where they can help the most. In any case, learning and growth constitute the essential foundation for success of any knowledge-worker organization.

Project management has been in the management culture for decades, and thousands of managers are routinely capable of amazingly complex achievements. People trained
only in project management may have difficulty in figuring out how to accomplish the Balanced Scorecard, simply because it is such a different kind of management paradigm.
And many project managers may have never seen or cosidered any other way to get things done.

Often there is a long-established tradition of on-the-job training and experience for young people to learn and be mentored by experienced project managers. Many guidebooks,
manuals, software programs, and other means have been devised to aid the project manager. One of the key practical difficulties is to figure out how to get the process started
in the first place. If this is not a project, where does one begin? What kind of plan is appropriate for deployment of the balanced scorecard system? Until we have reached that
point where balancing scorecards is just the way and a proper knowledge base is build - we have to learn from others.

If we want to ride a rotating merry-go-round, we had better not attempt to just hop on. We will probably get hurt - and won't get on. The situation is similar with the Balanced
Scorecard. To get on the merry-go-round, we have to accelerate in the same direction for awhile, then hop on when our speed equals that of the circular floor. In other words,
there needs to be a ramp-up phase, where everyone "comes up to speed." This includes training or retraining of project managers, and probably focused deployment of pilot
efforts before attempting to cover an entire large agency. Sustained, patient leadership will be needed before the payoff is attained.
Custodio, Pearl Joyce B. March 10, 2017

Responsible persons and actions plans to reach the measure targets are defined. You can easily create a Scorecard, but to create a manageable scorecard is a completely
different thing!
Custodio, Pearl Joyce B. March 10, 2017