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The Balanced Scorecard is a strategically focused performance management system. It defines in detail what management means by performance whether an organization is achieving their desired results against set goals. The Balanced Scorecard translates Mission and Vision Statements into a comprehensive set of objectives and performance measures that can be quantified and appraised

The Harvard Business Review stated that Balanced Scorecard was one of the most important management concepts of the last 75 years. The Balanced Scorecard concept was created by Robert Kaplan and David Norton, who coined the term in a 1992 Harvard Business Review article.

Kaplan and Norton describe the innovation of the balanced scorecard as follows:

"The balanced scorecard retains traditional financial measures. But financial measures tell the story of past events, an adequate story for industrial age companies for which investments in long-term capabilities and customer relationships were not critical for success. These financial measures are inadequate, however, for guiding and evaluating the journey that information age companies must make to create future value through investment in customers, suppliers, employees, processes, technology, and innovation."
See an expanded version of the Kaplan & Norton conceptual framework for translatings organisation's strategic objectives into a set of performance indicators in 4 perspectives

The Balanced Scorecard looks at performance from four perspectives rather than a single and traditional bottom line financial measure. Kaplan and Norton recognized that enterprise or corporate performance is not one-dimensional, that there are multiple contributors that were categorized as:

  • Financial perspective - the focus is on the bottom line results achieved
  • Customer perspective - the focus is on customer needs and satisfaction
  • Internal Business perspective - the focus on the effectiveness of key internal processes
  • Organization Learning & Growth perspective - the focus is on how the organization invests in and supports its human resources
The Balanced Scorecard ultimately provides an approach which integrates an organization's strategic business objectives or goals with a "balanced" set of performance measures. This set of measures functions as a basis for the monitoring of planned achievements/outcomes (Lag Indicators) and also indicators for future performance of the organization (Lead Indicators).

Adopting the Balanced Scorecard approach within an organization can positively yield the following benefits:

  • Aligning performance measures with business strategies
  • Clear communication of strategy to all levels of the organization
  • A platform for monitoring achievement of overall strategic plans
  • A foundation for individual performance planning and evaluation
  • Provides a balance between short-term financial performance and long-term growth opportunities

Cetheus' RPM Balanced Scorecard is a robust and integrated enterprise-wide performance measurement and management solution that enables the effective measurement of what matters most, organizational health.

RPM Scorecard provides decision-makers with the tools to better understand the key drivers affecting a company's performance.

With RPM Scorecard, you will be able to identify if your company is meeting its strategic long-term goals, discover opportunities for process improvement, and recognize performance problems before they have a financial impact.

With an economically viable investment and effortless implementation, Cetheus' Enterprise Scorecard provides a quick return on your performance measurement investment and creates more proactive strategy formulations for more effective results.

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