Balance Scorecard Kaplan

A-Vic

We were told to research this for when we go back to college i have loads of information but really struggling to understand what it means????

Has anyone anyone looked at this and can explane it in laymans terms?

Thanks in advance



Vic

mini_schnauzer

What unit do you need to reseach this for?

A quick internet look says it is a strategic performance management tool; a semi-standard structured report supported by proven design methods and automation tools can be used by managers to keep track of the execution of activities by staff within their control and monitor the consequences arising from these actions.

A-Vic

i have the following information but its not going in:-

Balanced Scorecard Basics
The balanced scorecard is a strategic planning and management system that is used extensively in business and industry, government, and nonprofit organizations worldwide to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals. It was originated by Drs. Robert Kaplan (Harvard Business School) and David Norton as a performance measurement framework that added strategic non-financial performance measures to traditional financial metrics to give managers and executives a more 'balanced' view of organizational performance. While the phrase balanced scorecard was coined in the early 1990s, the roots of the this type of approach are deep, and include the pioneering work of General Electric on performance measurement reporting in the 1950’s and the work of French process engineers (who created the Tableau de Bord – literally, a "dashboard" of performance measures) in the early part of the 20th century.
The balanced scorecard has evolved from its early use as a simple performance measurement framework to a full strategic planning and management system. The “new” balanced scorecard transforms an organization’s strategic plan from an attractive but passive document into the "marching orders" for the organization on a daily basis. It provides a framework that not only provides performance measurements, but helps planners identify what should be done and measured. It enables executives to truly execute their strategies.
This new approach to strategic management was first detailed in a series of articles and books by Drs. Kaplan and Norton. Recognizing some of the weaknesses and vagueness of previous management approaches, the balanced scorecard approach provides a clear prescription as to what companies should measure in order to 'balance' the financial perspective. The balanced scorecard is a management system (not only a measurement system) that enables organizations to clarify their vision and strategy and translate them into action. It provides feedback around both the internal business processes and external outcomes in order to continuously improve strategic performance and results. When fully deployed, the balanced scorecard transforms strategic planning from an academic exercise into the nerve center of an enterprise.
Kaplan and Norton describe the innovation of the balanced scorecard as follows:
"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 innovation."



Adapted from The Balanced Scorecard by Kaplan & Norton
Perspectives
The balanced scorecard suggests that we view the organization from four perspectives, and to develop metrics, collect data and analyze it relative to each of these perspectives:
The Learning & Growth Perspective
This perspective includes employee training and corporate cultural attitudes related to both individual and corporate self-improvement. In a knowledge-worker organization, people -- the only repository of knowledge -- are the main resource. In the current climate of rapid technological change, it is becoming necessary for knowledge workers to be in a continuous learning mode. 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.
Kaplan and Norton emphasize that 'learning' is more than 'training'; it also includes things like mentors and tutors within the organization, as well as that ease of communication among workers that allows them to readily get help on a problem when it is needed. It also includes technological tools; what the Baldrige criteria call "high performance work systems."
The Business Process 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 products and services conform to customer requirements (the mission). These metrics have to be carefully designed by those who know these processes most intimately; with our unique missions these are not something that can be developed by outside consultants.
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.
The Financial Perspective
Kaplan and Norton do not disregard the traditional need for financial data. 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. With the implementation of a corporate database, it is hoped that more of the processing can be centralized and automated. But the point is that the current emphasis on financials leads to the "unbalanced" situation with regard to other perspectives. There is perhaps a need to include additional financial-related data, such as risk assessment and cost-benefit data, in this category.
Strategy Mapping
Strategy maps are communication tools used to tell a story of how value is created for the organization. They show a logical, step-by-step connection between strategic objectives (shown as ovals on the map) in the form of a cause-and-effect chain. Generally speaking, improving performance in the objectives found in the Learning & Growth perspective (the bottom row) enables the organization to improve its Internal Process perspective Objectives (the next row up), which in turn enables the organization to create desirable results in the Customer and Financial perspectives (the top two rows).
Balanced Scorecard Software
The balanced scorecard is not a piece of software. Unfortunately, many people believe that implementing software amounts to implementing a balanced scorecard. Once a scorecard has been developed and implemented, however, performance management software can be used to get the right performance information to the right people at the right time. Automation adds structure and discipline to implementing the Balanced Scorecard system, helps transform disparate corporate data into information and knowledge, and helps communicate performance information. The Balanced Scorecard Institute formally recommends the

jilt

A-Vic wrote: »

We were told to research this for when we go back to college i have loads of information but really struggling to understand what it means????

Has anyone anyone looked at this and can explane it in laymans terms?

Thanks in advance



Vic

Which module did your tutor say you needed this for?

A-Vic

jilt wrote: »

Which module did your tutor say you needed this for?

Its for ratio analysis but overloaded with information and losing the plot (as ever)

jilt

A-Vic wrote: »

Its for ratio analysis but overloaded with information and losing the plot (as ever)

:ohmy:

A-Vic

jilt wrote: »

:ohmy:

i could be totally off the mark tho jill dont panic lol (well not like i am now) lol

Miss_HJ

A-Vic wrote: »

Its for ratio analysis but overloaded with information and losing the plot (as ever)

We didnt cover it in great detail and our tutor said very unlikely to come up in exam - This was for DFS? just that you have to know it briefly not the full ins and outs

I wouldnt worry to much, worst case u loose a few marks cos u cant answer 1 question on it, there is far more important things to remeber that can gain you lots of marks in exams

hope this helps!

A-Vic

Miss_HJ wrote: »

We didnt cover it in great detail and our tutor said very unlikely to come up in exam - This was for DFS? just that you have to know it briefly not the full ins and outs

I wouldnt worry to much, worst case u loose a few marks cos u cant answer 1 question on it, there is far more important things to remeber that can gain you lots of marks in exams

hope this helps!

No its for MAC but your right but for understanding id like to know - plus i would imagine i will come across this at a later date and need to understand it for further studies

Miss_HJ

A-Vic wrote: »

No its for MAC but your right but for understanding id like to know - plus i would imagine i will come across this at a later date and need to understand it for further studies

lol it mite have actually bn MAC for me too, same lecturer and a confused mind.

I havent used it since! and have pribably forgt nething i new on it anyway!! does the Kaplan book not have a chapter on it? i also remember no previous exam papers had questions on it either when we looked

A-Vic

Miss_HJ wrote: »

lol it mite have actually bn MAC for me too, same lecturer and a confused mind.

I havent used it since! and have pribably forgt nething i new on it anyway!! does the Kaplan book not have a chapter on it? i also remember no previous exam papers had questions on it either when we looked

lol just had a halriuos convo with my manager regarding this she was like yeah this came up in an exam 2 or 3 papers back and waffled on about it. well considering she has one paper left on ACCA and am doing MAC you can imagine the convo was pretty one sided