Business professionals lack essential information about real-life metrics and information on how to build a Balanced Scorecard, which supports weights and scores, which allows calculating the performance values. This whitepaper is a Balanced Scorecard design toolkit, which contains some "how-to" ideas.
Balanced Scorecard Design Toolkit Whitepaper Page 1 AKS-Labs Distribution: You may distribute the Balanced Scorecard Design Toolkit original version of the whitepaper in its unmodified form via any means. But you should not charge or requesting Balanced Scorecard is a well-known concept and it's easy to find helpful donations for any such copies. articles about what this concept is. Balanced Scorecard projections and perspectives are also talked about much. Balanced Scorecard Design Toolkit contains "how-to"
ideas for Balanced Scorecard Business professionals lack essential information about real-life metrics and
methodology. information on how to build actual scorecard, which supports weights and scores, which allows calculating the performance values. This whitepaper is a Balanced Scorecard design toolkit, which contains some "how-to" ideas. Measuring business performance with Balanced Scorecard concept Balanced Scorecard concept is about measure and control. . The first step is to determine the goal of Balanced Scorecard: it should help to measure and control the performance of business unit; Balanced Scorecard helps to . The next step is to assign a target performance values and develop a measure performance and plan to archive the target results; share business goals. . The final step is controlling the performance, re-thinking business and separate business processes; Balanced Scorecard must be a document packed with performance information. That's why it is the best way to share management and business goal ideas with colleagues. Balanced Scorecard Toolkit: Perspectives and Metrics Robert Kaplan and David Norton in early 1990's suggested performance measurement perspectives: Four must-use perspectives to . Financial Perspective describe any business unit. . Customer Perspective Always need to start with . Internal Processes Perspective these metric groups. . Employee Learning and Growth Perspective These perspectives are must-use basic groups. Even if it's necessary to describe the business unit that is not involved in sales, financial perspective must be taken in account. Using these four perspectives is a guaranty that all aspects of business will be considered carefully. AKS-Labs ? 2501 Blue Ridge Road www.strategy2act.com AKS-Labs Whitepaper Suite 150 ? Raleigh ? NC ? 27607 toolkit@strategy2act.com Balanced Scorecard Design Toolkit Whitepaper Page 2 AKS-Labs Balanced Scorecard Toolkit: Weights and Scores Any scorecard support system should represent perspectives and metrics, providing them with adequate importance estimations and scores. The Balanced Scorecard may be represented as follows below: [P1] (Weight-1) ?? . The Balanced Scorecard should [P2] (Weight-2) be represented as a set of ?? Metric-2.1 (Weight-2.1; Score-2.1) metrics, weights and scores. ?? Metric-2.2 (Weight-2.2; Score.2-2) ?? Metric-2.3 (Weight-2.3; Score.2-3) ?? . [P3] (Weight-3) ?? . [P4] (Weight-4) ?? . Can there be a sub-metric for Metirc-2.1? It's up to Balanced Scorecard developer, but Balanced Scorecard is as effective as it is simple and easy to overview. Balanced Scorecard Toolkit: Calculations How to calculate the performance value using a given values of metrics' importance and user assigned scores. The Balanced Scorecard showed above may be represented as: [P1] (W0,1) Steps to calculate performance ?? . using a given values of metric [P2] (W0,2) importance and user's scores. ?? M 2,j (W2,j; S2,j), where j=1..number_of_metrics [P3] (W0,3) ?? . [P4] (W0,4) ?? . The total performance value will be calculated in three steps: 1. Normalization of the score to absolute score values; 2. Normalization of the weight to absolute weight values; 3. Calculation the total performance values; Normalization and performance calculation Normalization is necessary for further calculations. Assume, the initial weight and score values were given on scale [0..10], where 0 is for the "minimal AKS-Labs ? 2501 Blue Ridge Road www.strategy2act.com AKS-Labs Whitepaper Suite 150 ? Raleigh ? NC ? 27607 toolkit@strategy2act.com Balanced Scorecard Design Toolkit Whitepaper Page 3 AKS-Labs importance" and 10 is for the "maximum importance". The same scale is used for score values - 0 might be for 0% progress and 1 might be fo... [download for more]