Developing Software Within A Hypercompetitive Market

The Balanced Scorecard (BSC) is a powerful diagnostic tool which provides managers with a vision and strategy of the organization to completely value the performance of the organization(Roussas & Mccaskill 2015). BSC integrates financial measures with several crucial factors to create a long or short term plan(Huang 2009). This system emphasizes ‘leading and lagging indicators, internal performance perspectives, and quantitative and qualitative objectives’(Roussas & Mccaskill 2015). BSC works by four perspectives:

Balanced scorecard is a methodological tool that businesses use to get a measure by which someone can determine whether the set goals have been met or exceeded. It adds non-financial metrics to traditional financial metrics to give a well-rounded view of the performance in an organization. Balanced scorecards also help organizations to predict their success in meeting their overall strategic goals.

The balanced scorecard influences the development of an effective performance management structure that seeks to increase the level of performance while enhancing the monitoring process of the organizational tasks. The program influences the identification of the lacking areas within the organization that remains instrumental in

The goal of this essay is to focus on theory and implementation of the Balanced Scorecard system. Because of the structured generic approach of the methodology, the Balanced Scorecard has gained its popularity as means of evaluating performance and reporting quantitative performance results. 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 (The Balanced Scorecard Institute, 2014). The Balanced Scorecard is the most prevalent and adopted of the several strategic performance tools since the early 1990s. In addition, the derivatives of the Balanced Scorecard such as Performance Prism and Results Based Management have also gained prominence in the field of strategic performance management and improvement. The Balanced Scorecard commenced as a performance management tool that incorporated strategic non-financial performance measures to the conventional financial indicators in order to provide managers and company executives with a somewhat “balanced” view of the aspect of organizational performance.

The balanced scorecard (BSC) is an extensively used performance measurement tool introduced to take the strategy and vision of the business into real action from four perspectives: financial, customers, internally progress and learning and grow. (Kaplan and Norton, 1996) From all these four perspectives, it can be seen that this measurement tool is different from others because it concentrates on both financial and operational information rather than only financial figures which make the tool provide a more comprehensive of the business to shareholders and customers. In these years, BSC has developed from the performance measurement tool to a strategic management system. ( Kaplan and Norton, 1996, p 37) However, this essay aims at introducing the balanced scorecard as a performance measurement from its origins, why business needs it, how it can be utilized, how the business can get benefits from adopting this measurement tool and what potential problems and limits it has.

To bridge the gap between strategy and action, organizations use the Balanced Scorecard, BSC. This tool aligns business activities to the organization’s strategy and vision thereby boosting the internal and external communications as well as monitoring its performance against strategic objectives by incorporating financial and non-financial elements from various perspectives into a single framework. Therefore, the BSC is essential in steering an organization to focus on its most relevant areas that push the organization to success by clarifying performance in relation to the business strategy. An organization can thus use BSC to achieve customer satisfaction through innovation thereby strengthening its financial position, achieve a competitive advantage and retain clients.

“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.”

This essay examines how balanced scorecard is developed and acts as an increasingly important factor in balancing strategic objectives and measure/KPIs tools used in businesses, industry, organizations and government to integrated and aligned business vision and strategy of the organization. The balanced scorecard has changed from simple performance measurement tool to performance strategy, strategic planning and to management system that fit into current rapid change in business environment. However, this essay will only illustrate specifically in performance measurement framework using balanced scorecard and mainly focus on advantages it’s contributed to business activities. The limitation and criticism of balanced scorecard as a

The balanced scorecard is a strategic planning and management system which is helpful 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.

The Financial perspective shows that financial measurements are important, however, financial information shouldn’t have such heavy emphasis that other perspectives are disregarded (Value). The Customer perspective is understanding the importance of consumer satisfaction of the business and focuses on the long-term projection of the company (Value). The Business processes perspective details internal information, like how the business is running and if the

Internal processes that lead to high financial goals for example quality and product reliability, speed in fulfilling customer needs and also speed in response to customer complaints and these elements will have an impact on the service to customers. According to Arifinfo June 2, 2011, the internal processes include improving the quality and reliability products lowering the number of products that fail, increase speed of service developing innovation process and develop production capacity hence performance management is enhanced. Again organizations can cover internal operational goals and outlines the key processes necessary to deliver the customer objectives.

Balance scorecard can communicate the nonfinancial measures into the strategic management via four perspectives which include financial; customer; internal business processes; learning and growth. These four perspectives are in cause-and-effect basis where the acquired of necessary learning and growth can improve the internal business processes and then achieve customers’ satisfaction and finally accomplish the desired financial goal or objective. The construction of strategy maps are top down, begin with the goal or objective and then the means that direct to the destination. Financial perspective generally includes increase of shareholder value or economic value. This can be done through revenue growth and productivity where revenue growth involves expending new products, new markets and new customers or enhance sales to current consumers. Productivity strategy involves lowering cost or improves assets utilization effectiveness. Customer perspective consists of customer-value proposition that differentiate companies through operational excellence, customer intimacy excellence and product leadership. Internal processes perspective can be identified after the identification of financial and customer perspective. This perspective includes internal business

The ‘Balanced Score Card’ is a strategic performance management system that allows an organization to translate its Vision, Mission, Values and Strategies by providing a new framework, one that tells the story of the organisation’s strategy through the

The balanced scorecard supplements the traditional financial perspective with performance measurement criteria from three other perspectives- customer, internal business processes and learning and growth. Looking at each of the four aspects of the

Other than ABC, balanced scorecard is also design for the change of the management accounting. According to Olve and Sjèostrand (2002) a balanced scorecard is a format for describing activities of an organisation through a number of measures for four perspectives: financial, customer, internal process