Start Developing Your Balanced Scorecards
Do you have a well formulated Strategy? Leading companies use a variety of approaches to Strategy, the Balanced Scorecard being among the most widely known and deployed.
While the SAP Strategy Management (SAP SSM) tool fully supports the Balanced Scorecard approach to strategy and is one of the few tools certified by Kaplan-Norton, the inventors of the Balanced Scorecard, as well as numerous others, the real effort remains the definition and acceptance of the BSC framework among the organizational units before, during, and after the implementation of the BSC.
Getting Strategy Right Requires a Balance
To help you align your Strategy, Objectives and Initiatives, please download the template on the right.
- This template can be used to develop an enterprise wide Balanced Scorecard.
- This will help you leverage our SAP BSC SSM Best Practice Expertise.
- It is based on a variety of global project experiences
This template provides a robust method to tie complex objectives and initiatives together which can be used in your enterprise Strategy Management deployment. We can help you develop a complete enterprise wide Strategy Management approach.
What is a Balanced Scorecard
The Balanced Scorecard is a strategic management tool which allows you to tie your quantified vision back to your Perspectives, Objectives and Initiatives as well as associated Key Performance Indicators (KPIs). It is then deployed across organizational units so that each organizational unit has both a clear mission that it has bought into, as well as a global vision of what the Company's strategy is.
This approach allows each organizational unit to make the required trade-offs among the various activities that they might make, all of which are typically constrained by both budget and manpower resources.
Competitive Analysis Plays a Key Role in Strategy Formulation
There are numerous approaches to competitive analysis, each of which has it own pluses and minuses. Porter's Five Forces, for example, a very popular, well regarded approach. However, it does take considerable time and effort to get useful information from it, and usually will require some investment in 3rd partner information sources, of which there are many of varying qualitiesd available in the market.
Are There Balanced Scorecard Templates Available
As the BSC approach to Strategy Management is well established, there are already a large number of Industry Specific and Strategy specific templates available. This is not to say you should just rely on them to build out your BSC. If you do, though you may save some time and effort, you will give up the learning and development the organization will gain from developing their own BSC.
It is therefore a smarter approach to start with a template but not to rely on it totally.
How Do I Use the Balanced Scored For Strategic Management
Your BSC, once developed, can provide a roadmap which you can follow in your day-to-day operations. However, you will need to ensure you have a Strategic Management steering committee that is consistently monitoring your progress against the plan.
This is why it is imperative to have the right Strategy Management Software along with a robust datawarehouse to ensure your operation is able to actually execute against the plan while making adjustments based on feedback.
How Do I Learn More About My Value Stream
In order to change your business processes, you will need to understand them and be able to measure them. That is why you will need to perform Value Stream Analysis to develop a comprehensive picture of how your processes are supposed to work as well as how you should measure them.
The Biggest Challenges With Accelerating Implementation
Without doubt, the biggest challenge any BSC effort will face is achieving organizational alignment. For very large, multi-national organizations, who may have 100s to 1000s of business entities, in entirely unrelated lines of business, it will simply take a lot of coordination effort to achieve this alignment.
Along with the challenge of organizational alignment, will be the challenge of getting agreement on the quantified vision. What is a quantified vision? At its core, it is usually something along the lines of we want to increase annual revenue from X to Y, or 1 billion to 1.3 billion. It is the 300,000,000 million increase that is the part of the vision that has to be broken out in detail and which each business unit has to 'buy in to'.
What is the Execution Premium@
The Execution Premium@, a term that comes to us from Professor's Robert S. Kaplan and David P. Norton, who founded Kaplan-Norton, is an acknowledgement that developing a BSC is of little value unless businesses are able and willing to execute against the plan.
Companies that can not only design an effective, competitively differentiating strategy as well as execute it flawlessly, while adjusting to the market in real time, can dominate their market and obtain an outsize profit premium and ensure their long term survivability.
Thus, a BSC project has to be performed by strategy experts, who help ensure the company stays the course for the long term, while providing Strategic Management consulting.
What Are Some Of The Common Myths About The BSC Maturity Model
One of the most common myths about the BSC is that it is still developing, which could not be further from the truth. There are a large number of firms operating around the globe in virtually every industry who have successfully implemented the Balanced Scorecard.
This is at least partially the reason there are already templates you can use to get started with your BSC project. It also means there is an established methodology for the design, implementation and on-going management of a BSC.