BALANCED SCORECARD

The Balanced Scorecard is a measure of

the key elements of a companys
strategy, ranging from continuous
improvement and partnerships, to team
work and global scale.

Organisations design their unique
balanced scorecard based upon their
unique constraints. A companys
performance depends on how it
measures its performance.
Managers cannot afford to rely on either
financial or operational measures
exclusively.

No single measure provides a clear
performance target focusing on the
critical areas of a business. Thus there is
a need for balanced representation of
both financial and operational measures.
Kaplan and Norton have devised a balanced
scorecard- a set of measures that give top
managers a quick but comprehensive view of
the business.
The balanced scorecard consists of
a)financial measures that measure the actions
already taken.
b)The scorecard also contains operational
measures such as customer satisfaction,
internal processes and the organization's
innovation and improvement activities.
The balanced scorecard can be
compared with dials and indicators in an
airline cockpit.
Pilots need detailed information of
many aspects of flight for navigating and
flying an airplane.
These information is necessary to get an idea of the
current and predicted environment..
Relying on a single measure can be fatal.

Just like a pilot, a manager should be able to view
performance in several areas at the same time.

Using a balanced scorecard, managers can look at
the business in terms of four dimensions. The
balanced scorecard answers four basic questions-


1. Customer: How do customers see us?










2. I nternal Business Process: What must we excel at ?

GOALS MEASURES
Technology capability Manufacturing geometry vs.
competition
Manufacturing excellence Cycle time/ unit cost/yield
Design productivity Efficiencies
New product introduction Actual introduction schedule
vs. plan
3.Learning and Growth : How can we improve and
create value ?






GOALS MEASURES
Technology
leadership
Time to develop next generation
Manufacturing
learning
Process time to maturity
Product focus Percent of products that equals 80%
sales
Time to market New product introduction vs.
competition
4.Financial : To succeed financially, how should we
appear to our shareholders?



GOALS MEASURES
Survive Cash flow
Succeed Quarterly sales
growth and operating
income by division
Prosper Increased market
share and ROI
Many firms use balanced scorecard as a
strategy tool
1. It brings many elements of a companys
strategy in a single report.
2. It helps to minimize sub optimization.

The balanced scorecard is appropriate for
organizations of today to be on track and
move confidently into the future. The
scorecard keeps strategy and vision at the
center