The balanced scorecard (BCS) is a management strategy that measures performance in areas such as customer satisfaction, financial management, business processes, and learning and growth. It was introduced by Dr. Robert Kaplan and Dr. David Norton to provide a more realistic view of an organization’s overall performance. CRM, business process management, and modernization efforts are also included in the BCS strategy.
In business, a balanced scorecard (BCS) is a management strategy that applies to areas of customer satisfaction, financial management, existing business processes, and learning and growth efforts for an organization. Scorecard results are used as indicators to align business activities with the organization’s strategy. This approach attempts to improve internal and external communications, while monitoring overall organizational performance against its strategic objectives.
The balanced scorecard strategy was first introduced by Dr. Robert Kaplan and by Dr. David Norton as a way to measure performance, which added three additional measures of performance to an organization’s traditional financial metrics. This framework is designed to provide executives with a more realistic view of an organization’s overall performance. Although financial information gives the status of an organization, it is usually historical in nature. The balanced scorecard equally weighs future performance indicators, such as customer satisfaction and modernization efforts, in an attempt to gauge the true state of an organization.
Customer Relationship Management (CRM) is a process included in the balanced scorecard framework. CRM was designed to help a business identify and target an organization’s best customers. This process attempts to improve customer satisfaction and reduce marketing time by identifying a company’s most profitable customers.
The most profitable customers typically receive the highest level of service. Most of the big corporate organizations use CRM techniques in their call centers. This software presents information to the call center analyst before he picks up the phone, allowing him to market products based on customer profile information.
Business process management is another fundamental element of BCS. Key metrics are built into the balanced scorecard framework, based on existing business processes. These metrics provide managers with information to assist in evaluating the effectiveness of products and services based on customer feedback. Some simple examples of business process management might include order completion time and hold time for customers with call centers. By measuring and improving an organization’s existing business processes, future gains can be realized more realistically.
One of the most unique areas of the BCS strategy is future modernization efforts based on workforce learning and growth. The learning and growth area of a company is important to monitor as it defines the future of the organization. Within the balanced scorecard, this facet includes employee professional training and corporate objectives related to individual and corporate modernization improvements. Due to the rapidly changing technological environment, it is important for organizations to monitor the capabilities of today’s workforce
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