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Balanced Scorecard

Identify and Improve strategic management performance metrics

Traditional performance management tools only focus on financial outcomes and often fail to consider other important factors such as loyal customers or skilled staff. A more balanced approach is to consider non-financial performance measures in relation to Company Strategy. For example, customers might be prepared to pay more for goods and services produced from an environmentally friendly company. A Balanced Scorecard (Strategy and Leadership, Kaplan and Norton, 2004) gives equal weight to four different perspectives. In a single diagram you can record key financial and non-financial goals, with links to meaningful benchmarks and performance measures. The Scorecard acts as a communication and measurement tool to address strategic planning.

Balanced scorecard - the four perspectives:

  • Financial
  • Customer
  • Internal Business Process
  • Learning and Growth

Each perspective must consider these items:

  • Strategic Objectives (growth, profitability, customer satisfaction, process excellence)
  • Measures (revenue growth, return on equity, number of complaints, yield)
  • Targets
  • Initiatives

For example:

Business Analysis tool, the Balanced Scorecard in Sparx Systems Enterprise Architect

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