Balanced Scorecard

What is a Balanced Scorecard?

Definition

A balanced scorecard (BSC) is a strategic planning and management metric used by organizations to effectively communicate their goals and targets, organize staff daily work, place priority on all projects, products, and services, and measure/monitor all progress made toward achieving their targets.

Understanding a Balanced Scorecard

The balanced scorecard is aimed at measuring four strategic parts of an organization: business processes, learning and growth, finance, and customers. This gives organizations an advantage to easily spot business performance challenges and plan new developments that would benefit the organization by simply tracking future scorecards.

The idea of using a balanced scorecard in the planning and management of an organization stems from the place of seeking new strategic ways that can be added to traditional financial measures to have a more balanced performance perspective. Balanced scorecards have very well evolved past the use of simple perspectives to a more all-inclusive system for strategic management. By using a balanced scorecard, organizations will be able to use a more disciplined framework that allows it connect the various components of planning and management strategy; that is, there will be a tangible connection the projects and programs that are being worked on, the measurement used to track success, the targets the organization wants to achieve, the mission and vision of the organization, and the organization’s strategies.

The purpose of balanced scorecards is to provide an organization with useful feedback (information/data) that can be used to make better decisions in the affairs of the organization.