Outline by Henry Stoll
Master of Accountancy Program
University of South Florida, Fall 2000
"Like an airplane’s control panel, an automated Balanced Scorecard helps managers steer their business by providing a comprehensive picture of performance. It builds that picture with financial and nonfinancial measurements such as customer loyalty, quality, revenue, and employee knowledge. An accurate view of these factors enables management to measure overall performance rather than focusing on short-term, bottom-line results."
Balanced Scorecard vs. an Executive Information System
Vendors are trying to market an enterprise system for delivering a Balanced Scorecard, but it’s actually just an Executive Information System providing a graphical representation of key high-level performance indicators.
|Balanced Scorecard||Executive Information System|
|Fluid. Constantly changing based on how people meet their goals.||Mostly hard-coded. Requires significant maintenance.|
|Focus on both leading and lagging indicators.||Focus primarily on lagging (financials) indicators.|
|Use networks to allow information to be distributed to everyone in a company. A system for the masses.||Focus on moving information from a mainframe to individual PCs. A system for a few.|
The Automated Balanced Scorecard
Software solutions must be aligned with the Balanced Scorecard methodology.
Business Intelligence - Translates quantitative data into a Balanced Scorecard summary that shows the goals that the company is and is not achieving.
Text processing - Incorporates feedback and explanations to provide qualitative assessment capabilities.
The Internet - Makes the system accessible to anyone anywhere.
|Product profitability||Market segmentation||Training||Portfolio management|
|P&L Reporting||Customer profitability||HR||Distribution|
|Risk management||Retention management||Technology||Process control|
Enterprise wide deployment to thousands of users.
Need for organizational scorecards down to individual scorecards.
Automated assessment and feedback loops.
Client/server and web deployable.
Easy to use.
Use wizard technology to make and modify personal scorecards.
Quantitative and Qualitative Analysis.
Automatic signaling and alert for management (smart technology)
Adding groups, users, applications a user can access, scorecards a user can access, and defaults for each user.
Security is essential.
Balanced Scorecard systems need to be highly integrated with:
Online Transaction Processing Systems
Enterprise Resource Planning Systems
Kaplan, R. S. and D. P. Norton. 1992. The balanced scorecard - Measures that drive performance. Harvard Business Review (January/February): 71-79. (Summary).
Kaplan, R. S. and D. P. Norton. 1993. Putting the balanced scorecard to work. Harvard Business Review (September-October): 134-147. (Summary).
Kaplan, R. S. and D. P. Norton. 1996. The Balanced Scorecard: Translating Strategy into Action Boston: Harvard Business School Press. (Summary).
Kaplan, R. S. and D. P. Norton. 1996. Using the balanced scorecard as a strategic management system. Harvard Business Review (January-February): 75-85. (Summary).
Kaplan, R. S. and D. P. Norton. 1997. Why does business need a balanced scorecard? Journal of Cost Management (May/June): 5-10. (Summary).
Kaplan, R. S. and D. P. Norton. 2000. Having trouble with your strategy? Then map it. Harvard Business Review (September-October): 167-176. (Summary).
Kaplan, R. S. and D. P. Norton. 2001. The Strategy-Focused Organization: How Balanced Scorecard Companies Thrive in the New Business Environment. Harvard Business School Press. (Summary).
Kaplan, R. S. and D. P. Norton. 2001. Transforming the balanced scorecard from performance measurement to strategic management: Part I. Accounting Horizons (March): 87-104. (Summary).
Kaplan, R. S. and D. P. Norton. 2001. Transforming the balanced scorecard from performance measurement to strategic management: Part II. Accounting Horizons (June): 147-160. (Summary).
Kaplan, R. S. and D. P. Norton. 2004. Measuring the strategic readiness of intangible assets. Harvard Business Review (February): 52-63. (Summary).
Lyons, B., A. Gumbus and D. E. Bellhouse. 2003. Aligning capital investment decisions with the balanced scorecard. Journal of Cost Management (March/April): 34-38. (Summary).
Martinsons, M., R. Davison and D. Tse. 1999. The balanced scorecard: A foundation for the strategic management of information systems. Decision Support Systems (25): 71-88. (Summary).
Norreklit, H. 2003. The balanced scorecard: What is the score? A rhetorical analysis of the balanced scorecard. Accounting, Organizations and Society 28(6): 591-619. (Summary).
Paladino, B. 2007. 5 key principles of corporate performance management: How do Balanced Scorecard Hall of Fame, Malcolm Baldrige, Sterling, Fortune 100, APQC, and Forbes award winners drive value? Strategic Finance (June): 39-45. (Note).
Schonberger, R. J. 2008. Lean performance management (Metrics don't add up). Cost Management (January/February): 5-10. (Note: Schonberger criticizes the KPI or scorecard approach from the lean enterprise perspective. Summary).