Scorecard business plan

One of the big challenges faced in the design of Balanced Scorecard-based performance management systems is deciding what activities and outcomes to monitor. By providing a simple visual representation of the strategic objectives to be focused on, along with additional visual cues in the form of the perspectives and causal arrows, the strategy map has been found useful in enabling discussion within a management team about what objectives to choose, and subsequently to support discussion of the actual performance achieved. Kaplan and David P.

Scorecard business plan

In addition to measuring current performance in financial terms, the Balanced Scorecard evaluates the firm's efforts for future improvement using process, customer, and learning and growth metrics.

The term "scorecard" signifies quantified performance measures and "balanced" signifies that the system is balanced between: As intangible assets constitute an ever-increasing proportion of a company's market value, there is an increase in the need for measures that better report such assets as loyal customers, proprietary processes, and highly-skilled staff.

Consider the case of a company that is not profitable but that has a very large customer base. Such a firm could be an attractive takeover target simply because the acquiring firm wants access to those customers.

It is not uncommon for a company to take over a competitor with the plan to discontinue the competing product line and convert the customer base to its own products and services.

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The balance sheets of such takeover targets do not reflect the value of the customers who nonetheless are worth something to the acquiring firm. Clearly, additional measures are needed for such intangibles. Scorecard Measures are Limited in Number The Balanced Scorecard is more than a collection of measures used to identify problems.

It is a system that integrates a firm's strategy with a purposely limited number of key metrics.

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Simply adding new metrics to the financial ones could result in hundreds of measures and would create information overload. To avoid this problem, the Balanced Scorecard focuses on four major areas of performance and a limited number of metrics within those areas.

The objectives within the four perspectives are carefully selected and are firm specific. To avoid information overload, the total number of measures should be limited to somewhere between 15 and 20, or three to four measures for each of the four perspectives.

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These measures are selected as the ones deemed to be critical in achieving breakthrough competitive performance; they essentially define what is meant by "performance".

A Chain of Cause-and-Effect Relationships Before the Balanced Scorecard, some companies already used a collection of both financial and non-financial measures of critical performance indicators.

However, a well-designed Balanced Scorecard is different from such a system in that the four BSC perspectives form a chain of cause-and-effect relationships.

For example, learning and growth lead to better business processes that result in higher customer loyalty and thus a higher return on capital employed ROCE. Effectively, the cause-and-effect relationships illustrate the hypothesis behind the organization's strategy. The measures reflect a chain of performance drivers that determine the effectiveness of the strategy implementation.

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Objectives, Measures, Targets, and Initiatives Within each of the Balanced Scorecard financial, customer, internal process, and learning perspectives, the firm must define the following: Strategic objectives - what the strategy is to achieve in that perspective. Measures - how progress for that particular objective will be measured.

Targets - the target value sought for each measure. Initiatives - what will be done to facilitate the reaching of the target. The following sections provide examples of some objectives and measures for the four perspectives. Financial Perspective The financial perspective addresses the question of how shareholders view the firm and which financial goals are desired from the shareholder's perspective.

The specific goals depend on the company's stage in the business life cycle. Growth stage - goal is growth, such as revenue growth rate Sustain stage - goal is profitability, such ROE, ROCE, and EVA Harvest stage - goal is cash flow and reduction in capital requirements The following table outlines some examples of financial metrics:Searchable, research-based tools and resources to help employers develop or expand a workplace health promotion program that supports their employees’ physical, mental, .

Cascading a balanced scorecard means to translate the corporate-wide scorecard (referred to as Tier 1) down to first business units, support units or departments (Tier 2) and then teams or individuals (Tier 3).

The end result should be focus across all levels of the organization that is consistent.

Methodology

The Balanced Scorecard was developed in the early s by two guys at the Harvard Business School: Robert Kaplan and David Norton.

The key problem that Kaplan and Norton identified in the business of the day was that many companies tended to manage their businesses based solely on . A strategy map is a diagram that is used to document the primary strategic goals being pursued by an organization or management caninariojana.com is an element of the documentation associated with the Balanced Scorecard, and in particular is characteristic of the second generation of Balanced Scorecard designs that first appeared during the caninariojana.com first diagrams of this type appeared in the early.

Methodology. When we initially released our scorecard in November , we examined the body-worn camera policies from 25 local police departments. Score card templates are a reflection of the actual position of business entity, business proposal, medical report, business plan, and many other things.

A scorecard template has to be detailed but crisp i .

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