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."
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."
2 comments:
hi Rajat
To add to ur article, balance scorecard technique was developed by Norton & Kaplan in 1990's. It normally creates a balance between financial, marketing, learning and internal processes. But thats not all, we can add as many dimensions to it as we think are apt. It acts as a MIS tool for the top managment. Also it focusses on balance between long term and short term results. This technique is nowadays inbuilt part of any major six sigma deployment in any company. if anybody wants the original article written by the creators of this tool then mail me at prabal@blogomania.in i will fwd the soft copy of it to u.
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