what is a balanced scorecard bsc 
the term balanced scorecard bsc refers to a strategic management performance metric used to identify and improve various internal business functions and their resulting external outcomes 1 used to measure and provide feedback to organizations balanced scorecards are common among companies in the united states the united kingdom japan and europe data collection is crucial to providing quantitative results as managers and executives gather and interpret the information company personnel can use this information to make better decisions for the future of their organizations investopedia michela buttignolunderstanding balanced scorecards bscs accounting academic dr robert kaplan and business executive and theorist dr david norton first introduced the balanced scorecard the harvard business review first published it in the 1992 article the balanced scorecard measures that drive performance both kaplan and norton worked on a year long project involving 12 top performing companies their study took previous performance measures and adapted them to include nonfinancial information 2companies can easily identify factors hindering business performance and outline strategic changes tracked by future scorecards bscs were originally meant for for profit companies but were later adapted for nonprofit organizations and government agencies it is meant to measure the intellectual capital of a company such as training skills knowledge and any other proprietary information that gives it a competitive advantage in the market the balanced scorecard model reinforces good behavior in an organization by isolating four separate areas that need to be analyzed these four areas also called legs involve 2the bsc is used to gather important information such as objectives measurements initiatives and goals that result from these four primary functions of a business companies can easily identify factors that hinder business performance and outline strategic changes tracked by future scorecards 2the scorecard can provide information about the firm as a whole when viewing company objectives an organization may use the balanced scorecard model to implement strategy mapping to see where value is added within an organization a company may also use a bsc to develop strategic initiatives and strategic objectives 2 this can be done by assigning tasks and projects to different areas of the company in order to boost financial and operational efficiencies thus improving the company s bottom line characteristics of the balanced scorecard model bsc information is collected and analyzed from four aspects of a business 1these four legs encompass the vision and strategy of an organization and require active management to analyze the data collected the balanced scorecard analyzes is often referred to as a management tool rather than a measurement tool because of its application by a company s key personnel benefits of a balanced scorecard bsc there are many benefits to using a balanced scorecard for instance the bsc allows businesses to pool together information and data into a single report rather than having to deal with multiple tools this allows management to save time money and resources when they need to execute reviews to improve procedures and operations scorecards provide management with valuable insight into their firm s service and quality in addition to its financial track record by measuring all of these metrics executives are able to train employees and other stakeholders and provide them with guidance and support this allows them to communicate their goals and priorities in order to meet their future goals another key benefit of bscs is how it helps companies reduce their reliance on inefficiencies in their processes this is referred to as suboptimization this often results in reduced productivity or output which can lead to higher costs lower revenue and a breakdown in company brand names and their reputations 2examples of a balanced scorecard bsc corporations can use their own internal versions of bscs for example banks often contact customers and conduct surveys to gauge how well they do in their customer service these surveys include rating recent banking visits with questions ranging from wait times interactions with bank staff and overall satisfaction they may also ask customers to make suggestions for improvement bank managers can use this information to help retrain staff if there are problems with service or to identify any issues customers have with products procedures and services in other cases companies may use external firms to develop reports for them for instance the j d power survey is one of the most common examples of a balanced scorecard 2 this firm provides data insights and advisory services to help companies identify problems in their operations and make improvements for the future j d power does this through surveys in various industries including the financial services and automotive industries results are compiled and reported back to the hiring firm 3balanced scorecard bsc faqs