An approach to management integrating both financial and non-financial performance measures into a comprehensive framework developed by Professors Kaplan and Norton.
The Balanced Scorecard (BSC) is a strategic planning and management system used by organizations to align business activities with the vision and strategy of the organization. It enhances internal and external communications and monitors organizational performance against strategic goals.
Business Performance Management (BPM) is a framework of metrics that enables companies to analyze and ensure they meet their key performance indicators. This guide explains BPM, its applications, and related concepts.
Customer perspective in a balanced scorecard focuses on the target customers and market segments that an organization aims to serve. It measures how well the company performs from the viewpoint of customers.
The financial perspective focuses on how businesses can meet their goals in terms of profitability, growth, and shareholder value. It is one of the key facets of the Balanced Scorecard framework.
The internal business-process perspective is a part of the balanced scorecard framework, focusing on the internal operations that enable companies to deliver value to customers and shareholders. This perspective examines the efficiency and effectiveness of internal processes and seeks to improve them continually.
Lagging measures are performance metrics that reflect past outcomes and provide insights into how well business strategies and operations have performed historically.
Leading measures are predictive indicators that precede an outcome or result, typically used to forecast future performance and guide decision-making processes. These metrics enable organizations to take proactive actions to achieve desired results.
The Learning and Growth Perspective of the Balanced Scorecard focuses on the intangible assets like human capital, information capital, and organizational capital that drive continuous improvement and growth in an organization’s strategy.
Performance measurement involves developing indicators to assess progress towards predefined goals and reviewing performance against these measures. It can be applied to an entire organization or specific departments, branches, or individuals, utilizing both financial and non-financial measures.
