The balanced scorecard or balance score card is a strategic performance measurement model which is developed by robert kaplan and david norton. Addressing both strategy and service delivery models this paper describes the overall approach to using strategy maps in the public sector, based upon 4th generation balanced scorecard thinking. A strategy map defines corporate direction and aligns internal processes, strategic objectives, initiatives, key performance indicator kpi. A strategy map is a diagram that describes how a company or organisation can create value by linking strategic objectives in a cause and effect relationship based on the four balanced scorecard perspectives. Using the balanced scorecard as a strategic management system. Its this focus on both highlevel strategy and lowlevel measures that sets the balanced scorecard apart from other performance management methodologies. A balanced scorecard shows a series of causeandeffect relationships that show how a. Scorecard with a mind map online signup with a free account for immediate access to 23 scorecard templates.
Scorecard kpis ideally should be derived from a strategy map rather than being just a list of importa nt measures that the execut ives ha ve requested to be reported. The purpose of this paper is to examine the balanced scorecard bsc adoption experience amongst organisations in connection with the strategy map design. Throughout the entire process of building and implementing a balanced. Definition and concept an approach to the provision of information to the management to assist with. The balanced scorecard is an organizational performance management methodology used to to translate an organizations mission and vision into actual operational actions strategic planning. There are many benefits to automating your balanced scorecard, but the ability see your strategy map light up with real performance colors may be the biggest. Though this scorecard is used to monitor all the activities, another main purpose that it fulfills is that it even keeps a check whether all the organizational. Since then, strategy map became a buzzword, a synonym of any visual representation of strategy. If you want some examples in your industry, download one of our free ebooks.
Its objective is to translate an organizations mission and vision into actual operational actions strategic planning. Conceptual foundations of the balanced scorecard 3. The paper uses the following structure for organizing the origin and subsequent development of the balanced scorecard. Proponents of the balanced scorecard bsc emphasize that the bsc translates strategy into action, but that strategy maps are a crucial mean to sustainable change. The term strategy map has its origin in the balanced scorecard bsc concept of the mid1990s.
The name balanced scorecard comes from the idea of looking at strategic measures in addition to traditional financial measures to get a more balanced view of performance. Norton s everal years ago, we introduced the concept of a balanced scorecard for motivating and measuring business unit performance. Anytown hospital has just finished a twoday retreat where they revised and updated their mission and vision statements and drafted a strategic plan. Now the people who first developed the balanced scorecard, robert s. Measures livability score program satisfaction score per service utilization business and licenses per income tourism revenue controllable asset value strategic projects. Totally free strategy map balanced scorecard kpi software. Thus, as a contribution to our work, we build a strategy map for ericsson. The balanced scorecard tracks all the important elements of a companys strategyfrom continuous improvement and partnerships to teamwork and global scale. Dpi in order to achieve the objective of becoming an international organization or world class company.
It has the ability to show the connections between all four perspectives in a onepage picture. Below, well discuss the most popular approach to strategy map design based on. May 03, 2014 the balanced scorecard or balance score card is a strategic performance measurement model which is developed by robert kaplan and david norton. Using the balanced scorecard as a strategic management. How to develop a balanced scorecard into a strategy map. Strategyfocused organizations use the balance scorecard to place strategy at the center of their management processes. Their combination is a navigational tool to guide the organisation to execute the strategy formulated by the executive team.
The balanced scorecard tracks all the important elements of a companys strategyfrom continuous improvement and partnerships to teamwork and. Explore and explain how the balanced scorecard is implemented into a strategy map. Pdf the impact of the strategy maps on balanced scorecard. Norton, strategy maps boston, harvard business school press, 2004 robert s. Your static strategy map becomes a live performance dashboard. The balanced scorecard measures your companys performance from four perspectives financial, customer, internal. Balanced scorecard basics balanced scorecard institute. Niven, balanced scorecard stepbystep for government and nonprofit agencies, 2nd ed. This website has a strong totally free educational focus on strategy maps and balanced scorecards. Uses strategic performance measures and targets to measure progress. By translating their strategy into the logical architecture of a strategy map and. Functional silos arise and become a major barrier to strategy implementation since most organizations have great difficulty communicating and coordinating across these specialty functions. The balanced scorecard is the closest management tool to a crystal ball as you will find. Provide trusted information and services through integrated ia capabilities to enable mission accomplishment.
Strategy maps combine with balanced scorecards to provide a new framework for describing and implementing strategy. With that in mind, lets dive right in to an example of what a balanced scorecard looks like in practice. Despite the best intentions of those at the top, lofty statements about becoming best in class, the. Welcome to our strategy map balanced scorecard software website. The balanced scorecard makes a unique contribution by describing strategy in a consistent and insightful way. Balanced scorecard, organizations create a common understandable point of. The balanced scorecard, strategy maps and dashboards. The purpose of this paper is to empirically investigate, from a balanced scorecard strategy map bssm perspective, the types of. The strategy map allows companies to describe the links between intangible assets and value creation so all aspects of strategy can be implemented in a manner that ensures sus. In addition, it can help provide information on the chosen strategy more. The business goal on the strategy map has all the details and is ready for execution. Align the daytoday work that everyone is doing with strategy. And orally presenting the map is one of the best ways to communicate an organizations strategy. Balanced scorecard example the following is an example of how one might develop a balanced scorecard.
That is where the strategy map and its derived balanced scorecard fit in. A full balanced scorecard example including 6 templates. Pdf strategy map dan rancangan balanced scorecard pt. These practical tips, gleaned from the authors experience with hundreds of these presentations, can help even the most hesitant bsc leader become an expert in. Article pdf available in journal of business strategy. Building strategy maps and scorecard in utilities euci.
Some balanced scorecard software packages allow you to build your strategy map directly in the software. Using survey data from managers of 91 italian organisations the paper seeks to verify whether. One increasingly popular framework to combine these qualities is the balanced scorecard. Understanding balanced scorecards and strategy maps.
A strategy map is typically constructed with a set of 15 to 25 causally linked strategic objectives. Pdf causal linkages between supply chain management. Norton, alignment boston, harvard business school press, 2006 paul r. Norton, have created a powerful new tool based on their ongoing research. The us army was one of the first major organisations to put the balanced scorecard into practice with a degree of success that placed the scorecards concepts at the heart of the us. Despite the best intentions of those at the top, lofty. According to kaplan and norton, a strategy map is a logical comprehensive architecture for describing strategy. Strategy map balanced scorecard does not offer a free trial. A balanced scorecard approach to strategic planning. At its simplest the strategy map describes how an organisation plans to deliver its strategic goals expressed as a onepage systems diagram. The balanced scorecard as a performance management tool.
The balanced scorecard strategy map information assurance domain, global information grid mission gig ia mission. By using a strategy mapa powerful new tool built on the balanced scorecard. Balanced scorecard working for the us military the us army was one of the first users of the balanced scorecard and still uses it today, all round the world. Balanced scorecard, strategy mapping has been the subject of recent books, articles and discussions. Commentary transforming the balanced scorecard from.
The concept of balanced scorecard has evolved beyond the simple use of perspectives and it is now a holistic system for managing strategy. By translating their strategy into the logical architecture of a strategy map and balanced scorecard, organizations create a common understandable point of reference for all their units and employees. Integration of balanced scorecard bsc, strategy map, and fuzzy. The us army was one of the first major organisations to put the balanced scorecard into practice with a degree of success that placed the scorecard s concepts at the heart of the us. Cascading the balanced scorecard to build organizational alignment. Like a laser beam, strategy now has a clear path to everyone in the organization. It provides the foundation for designing a balanced scorecard that is the cornerstone of a strategic management system. The information included is fictional and is provided to simply demonstrate the process. Upward airlines reading a balanced scorecard strategy map.
Part ii 149 their own bodies of knowledge, language, and culture. Charles jones will present a case study on moving from a companys discussion on strategy to leveraging the balanced scorecard to effectively map how the elements of your strategy work together to achieve strategic goals. This video provides an example of a balanced scorecard with strategy maps. The simple act of describing strategy via strategy maps and scorecards is an enormous breakthrough. Measures livability score program satisfaction score per service utilization business and licenses per income tourism revenue controllable asset value strategic projects on thne and budget index of program results shared systems time changes audit score of communication recruitment effectveness. This initial paper suggests a strategic management framework based on the balanced scorecard bsc 6,7 and the strategy map 8,9 to. This discourse has greatly raised practitioner awareness. This research aims to compile and designing strategy map and balanced scorecard on pt. The balanced scorecard as a performance management tool for. One increasingly popular framework to combine these qualities is the balanced scorecard bsc, and specifically the more recent incarnation, the strategy map. Strategic management, balanced scorecard, strategy maps, innovation.
It provides a roadmap on where to focus energies, priorities, and resources. Measure and monitor progress towards strategic targets. A balanced scorecard strategy map is a onepage visual depiction of an organizations scorecard. Government strategic planning and management system example strategic objectives and strategy map measures targets initiatives constituent stakeholder livability satisfaction score 90% this year green space program new business startup program. Transforming the balanced scorecard from performance m easurement to strategic management.
Purpose today, supply chain design and management constitute a major source of competitive advantage for firms. The balanced scorecard strategy map is an unparalleled tool for communicating strategy. Linking the balanced scorecard to strategy robert s. Strategy maps and balanced scorecards constitute the measurement technology for managing in a knowledgebased economy.