Balanced Scorecard Implementation

Written by Serena Berger
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You may be inclined to think that the balanced scorecard is just the latest fad in a long line of management trends, which will pass within a few years and be quickly forgotten. Already, however, the balanced scorecard has shown a rare sticking ability. The balanced scorecard provides an integrated framework that can provide guidance in many executive decisions and is sure to be useful well into the future. As a result of its flexibility, balanced scorecard management has been implemented by several types of organizations around the world, and their successes are encouraging others to adopt this comprehensive financial planning methodology.

Government Use of the Balanced Scorecard

In the case of publicly traded companies, the company must ultimately answer to its shareholders because it is their money being used. Similarly, the government is beholden to its taxpayers, who are demanding a greater degree of accountability in the use of their tax dollars. Many offices within the government are required by law to use performance-based scoring measures. In addition, budgeting is done based on high-level strategic decisions. Implementing a balanced scorecard seamlessly blends these strategic initiatives with performance metrics to identify areas that need to change.

Nonprofit organizations are the most focused of all--they operate solely to achieve their mission statements. They are, however, highly accountable for the use of funds they receive from the government and private sector donations. As a result, many nonprofit groups have implemented balanced scorecards to align day to day operations with their goals and provide flexible and comprehensive reporting to the government and the public when necessary.

Training seminars and consultants can provide your company with the information necessary to implement a balanced scorecard system. This involves identifying your goals (both financial and non-financial) and developing a set of performance measures that will allow you to assess if your actions are working toward these goals. Using balanced scorecards provides you with information that can be used to revise your actions for the future to help your company grow and meet its mission and financial goals.

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