Balanced scorecards (BSC) Balanced scorecard
The methodology of Balanced scorecards (Balanced scorecard) belongs to area of strategic controlling. On its basis the strategic (long-term) objectives and indicators are developed, mechanisms of control of accomplishment of strategy of the enterprise are implemented.
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The balanced scorecard (SSP, engl. balanced scorecard, BSC) – the instrument of strategic management by effectiveness, partially standardized reporting form allowing managers to monitor execution of tasks by employees and also effects of execution or non-execution. A system is supplied with ad hoc methods of design and automation.
The Balanced Scorecard (BS) provides purposeful monitoring of activity of the enterprise, allows to predict and anticipate emergence of problems, organically combines levels of strategic and operational management, controls the most essential financial and non-financial performance of activity (KPI) of the enterprise.
Using analogy to a rocket, one may say, that the system of distant targeting (an analog of BSC) provides management of a ballistic missile on initial section of a trajectory when the rocket does not see the purpose, and "knows" only its coordinates. On final section of a trajectory when the management system locks on a target, the mechanisms of tracking and exact targeting (analog of operational controlling) providing exact aiming of a rocket turn on. The same way, in an enterprise management system functions of strategic controlling on the basis of the BSC methods and the operational controlling based on budgeting and management of a number of various indicators of operational level are differentiated.
How the Balanced scorecards (BSC) system is created?
The essence of distinctions of the concept of BSC from the principles of creation of a system of operational controlling is that BSC represents model of strategy of the company, and the system of operational controlling – model of the enterprise. The model of the enterprise includes a number of projections. The level of managerial culture is higher, the this model is "richer", the it is more than projections and variables are in sight of company management.
The system of operational controlling contains a large number of various indicators as it should provide completeness of management information. On the contrary, in the BSC system the number of indicators is strictly limited. There is a rule of thumb: "Twenty it is enough!". Its sense that strategy defines priorities of activity of the company therefore strategic objectives cannot be much.
Indicators of operational controlling serve for management of operating activities of the enterprise while indicators of BSC intend for the investment management, i.e. business development.
In practice, misunderstanding of these distinctions leads to the fact that projects of creation of the BSC system stick in attempts to cover all aspects of activity of the company "strategic" indicators. It is extremely widespread error.
Example of the measured indicators
- Marketing: The lead cost, Cost of involvement of the client, the Number of the attracted clients
- Loyalty: % recoverability of clients, rating of the secret buyer
- Revenue: Revenue, Average bill, Number of checks, Marginal analysis of dishes
- Fudkost: Cost of products, Price inflation
- Personnel: Turnover of personnel, Salary, Development of personnel
- Lease: Traffic of shopping centers, Cost of lease is 1 sq.m.
- Finance: Profit and loss, Cash flow
Read Also
- Controlling
- Budgeting
- Planning and budgeting
- Key performance indicators (KPI)
- Balanced scorecards (BSC) Balanced scorecard
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