Balanced Scorecard Applications

Written by Serena Berger
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The concept of the balanced scorecard was developed in the early 1990s as a tool to provide management teams with a complete view of the company's performance. Software applications were soon developed that assist in evaluating a firm's performance by combining financial and non-financial measures. These early software applications later evolved to form the foundation for the integrated management tools that are used today.

Early Balanced Scorecard Applications

In 1998, the creators of the balanced scorecard system, Drs. Robert Kaplan and David Norton, founded the Balanced Scorecard Collaborative to promote the use of the balanced scorecard. The collaborative also established standards for balanced scorecard applications. The intent of these guidelines was to ensure that software developers would move beyond reporting tools and incorporate applications that could enact change within a company.

Some of the second-generation applications include interactive strategy maps that are linked directly to performance measures. Executives using these tools have the ability to look at the overall direction of the company, and can then drill down to look at specific metrics. This allows managers to determine with ease where additional resources would best be allocated. Moreover, they can make these allocations at very specific levels rather than earmarking funds for a vague initiative.

The third generation of applications makes the link between the balanced scorecard and organizational change even more explicit. The underlying principle is that you can use software applications to indicate where and how you can put your overall strategy into concrete operational terms. These applications are intended to focus the organization's thinking on strategy and finding ways to integrate strategy and the company's mission into the daily work of each employee.

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