What is Balanced Scorecard?
A balanced scorecard is a metric tool which is popularly used by various businesses to streamline their activities with the vision or goal of the organization. It is based on performance. It has been proved highly effective in setting and tracking main objectives of the organisation.
It makes an analysis of the performance of an organisation on four different parameters i.e. customer analysis aimed at:
- Customer satisfaction: Various metrics include customer ranking survey, pricing index, market share, etc.
- Financial performance: Various metrics which are calculated include: return on capital employed, cash flow, the profitability of the project, forecast etc.
- Internal analysis: The metrics used are success rate, safety incident index, project performance index etc.
- Efficiency: It is measured by revenues from new services, revenue generated by each employee etc.
It is a technique which divides the mission statement of the organisation into small and well-defined goals and also helps the company to gauge the performance in line with overall goals and objectives as stated in the mission statement.