The Balanced Scorecard is a strategic planning and management framework that helps organizations translate their vision and strategy into action. It provides managers with a comprehensive framework to translate an organization's vision and strategy into a coherent set of performance measures. The Balanced Scorecard identifies financial and non-financial metrics across four key perspectives - financial, customer, internal business processes, and learning and growth. It allows organizations to clarify and update strategy, communicate strategy throughout, and align goals and initiatives for strategic learning and improvement.

3. M.Rizwan
Shahzad Fasial
UzmaFazal
Nasira Aslam

4. A Measurement
System?
A Management
System?
A communication
Tool?

5. The Balanced Scorecard is a management
tool that provides stakeholders with a
comprehensive measure of how the
organization is progressing towards the
achievement of its strategic goals.

6.  Traditional financial reports look backward
 Reflect only the past: spending incurred and revenues earned
 Do not measure creation or destruction of future economic value
 The Balanced Scorecard identifies the factors that create long-term
economic value in an organization, for example:
 Customer Focus: satisfy, retain and acquire customers in targeted
segments
 Business Processes: deliver the value proposition to targeted
customers
Customers
 innovative products and services
 high-quality, flexible, and responsive operating processes
 excellent post-sales support
Processes People
 Organizational Learning & Growth:
 develop skilled, motivated employees;
 provide access to strategic information
 align individuals and teams to business unit objectives

7.  Translate mission, vision, strategy
 Provide the framework
 Measure four perspective
 Customer relation
 Financial
 Internal services process
 Learning innovation and growth

8. Long-Term
Shareholder Value
Improve Increase Expand Revenue Enhance
Finance Cost Structure Asset Utilization Opportunities Customer Value
Customer Price Quality Availability Selection Functionality Service Partnership Brand
Operation management Customer Management Innovation Management Social & Regulatory
Internal - Supply - Selection - Opportunities Identification - Environment
Process - Production - Acquisition - R&D Portfolio - Safety and Health
- Distribution - Retention - Design & Develop - Employment
- Risk Management - Growth - Launch - Community
Human Capital
Information Capital Organization Capital
- Skills - Systems
Learning - Culture
- Training - Databases
& Growth - Leadership
- Knowledge - Networks - Alignment
- Teamwork

9.  Translate strategy into:
 Objective
 Measurement
 Targets
 Initiative

11. • Change The Revenue Growth Strategy The Productivity Strategy
“Improve stability by broadeni ng the sources of rev enue fro m “Improve operating efficiency by s hifting c ustomers to more cost-
current customers” effective channels of distribution”
Formulate and communicate a
Improve
Returns Financial
Perspective
Improve
Broaden Operating

Revenue Efficiency
Mix
Increase Increase
Customer Customer Customer
Confidenc e in Satisfaction Perspective
Our Financi al Through Superi or
Advice Execution
new strategy for a more
Internal
Perspective
Understand Develop Cross-Sel l Shift to Provide
Mini mize
Customer New the Product Appropriate Rapid
Problems
Segments Products Line Channel Response
Increase
Employee
Productivity Learning
Perspective
competitive environment
Develop Access to Align
Strategic Strategic Personal
Skills Information Goals
• Growth
 Increase revenues, not just cut
costs and enhance productivity
• Implement
 From the 10 to the 10,000. Every
employee implements the new
growth strategy in their day-to-
day operations

13.  Clarifyingthe vision
 Gaining consensus
Example????????
Metro bank

14. Uzma Fazal 228

16. At the highest level, the Balanced Scorecard is a framework
that helps organizations to translate strategy into operational
objectives that drive both behavior and performance.
The BSC is a structured approach to performance
measurement and performance management that links the
organization’s strategic thinking to the activities necessary to
achieve desired results
The BSC is a vehicle for communicating an organization’s
strategic direction and for measuring achievements towards
these predetermined objectives
The BSC clearly establishes linkage between strategic
objectives, the measures for determining progress, the
stretch targets established, and the focused initiatives needed
to move the organization forward to meet those
organizational goals

17. Three layers of management
Top management
Middle management
First line management

18.  Advantages of Communicating and linking
 Easy information flow
 Better understanding of company long term
strategic goal
 Build a stronger commitment to achieve those
goals

19. STRATEGIC IMPLEMENTATION: BALANCED SCORECARD
Score card users generally engage in three activities
Communicating and educating
Setting goals
 Three levels of information
 Corporate objectives , measures and targets
 Leaves room for translating The corporate targets into
targets for each business unit
 The company asks both individual and teams to articulate
which of their own objectives would be consistent with
the business unit and corporate objectives
Linking rewards to performance measures
E.g An oil company uses the scorecard as the basis of
calculating incentive compensation.
Source: “Using the Balanced Scorecard as a Strategic Management System”, Kaplan and Norton, HBR, Jan-Feb 1996.

20.  Lets managers communicate their strategy up and down
the organisation and links it to departmental and
individual objectives
 Traditionally departments are evaluated by their financial
performance and individual incentives are tied to short
term financial goals
 The scorecard gives managers a way of ensuring that all
levels of the organisation understand the long term
strategy.

21.  Attractive and powerful linkages carries risk
 Assigning weights to each objective

22. Syed Shahzad Faisal Bukhari
224

24.  Long run planning
 Short run planning

26. Every organization have
separate procedures and
organizational unit for
strategic planning and for
resource allocation and
budgeting

27. Resource allocation and
budgeting process run by the
finance staff set financial target
for revenues , expenses , profit
and investment for next fiscal
year

28. Financially & Non Financially
measurement of the
organization is called balanced
scorecard

29.  Creating a balanced scorecard forces
companies to integrate there strategic
planning and budgeting processes that helps
to ensure that there budget support there
strategies
 Scorecard user select measure of progress
from all set targets
 The organizations determine which action
will drive them toward their targets

30. Style Company…..

31. Nasira Aslam 220

32.  Give capacity about strategic learning
 Existing
feedback and review process focus
on companies budgeted financial goal
 Withbalance scorecard company can monitor
short –term results
 Enable companies to modified strategies

33.  single loop learning process
 Double loop learning process

34. 1. Articulate the company shared vision
2. Supply essential strategic feedback system
3. Scorecard facilitates strategy review that
essential to strategic learning

35.  Company found significant correlation
between
 employ morals ,a measure in learning and
growth perspectives, and customer
satisfaction
 Correlated with payment of invoices
 Correlation between employ moral and
employ suggestions

36. Balanced score card can be used to:
- clarify and update strategy
- communicate strategy throughout the company
- align unit and individual goals with the strategy
- link strategic objectives to long term targets & annual budgets
- identify and align strategic initiatives
- conduct periodic performance reviews to learn about and
improve strategy
GEN0190n.ppt 36

37. Thanks to Allah
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