2.5 Designing and Building Scorecards

Home / Services / Strategic Services / Designing and Building Balanced Scorecards

Designing and Building Balanced Scorecards

Designing and building Balanced Scorecards is one of the strategic services we offer to our clients at BEAM Consulting. A Balanced Scorecard is a framework used to manage, implement, and translate strategy to achieve organizational goals. These scorecards are used to manage performance in organizations and consist of four main perspectives: Financial, Customer, Internal Processes, and Learning and Growth. The Balanced Scorecard helps organizations in decision-making and provides a comprehensive view of organizational performance, highlighting areas for improvement. Below is our methodology for implementing Balanced Scorecards, which also represents the sub-services we provide.

Schedule a consultation

Design Content:

A diagram containing strategic objectives, highlighting the organization’s priorities distributed across the four perspectives.

Design Explanations:

Illustrates the cause-and-effect relationships between perspectives and strategic objectives.

Value Realization:

Shows how the organization achieves the desired value provided to customers.

Measurable:

Easy to track and verify independently

Adequate:

Provides sufficient information about performance

Economical:

Not costly to implement

Relevant:

Related to the measured subject

Clear:

Free from ambiguity

CREAM criteria
for designing performance indicators:

Designing Indicators Based on CREAM Criteria: Reflecting strategic objectives, with the goal of driving performance measurement and monitoring performance evolution. These indicators include both Leading and Lagging indicators.

Financial Perspective Indicators such as:

Return on Investment (ROI).
Net Profit.
Gross Profit Margin.
Annual Revenue Growth Rate.

Customer Perspective Indicators such as:

Customer Satisfaction Index (CSI)
Net Promoter Score (NPS)
Customer Retention Rate
Customer Request Response Time
Complaint Rate.

Internal Processes Perspective Indicators such as:

Process Cycle Time
Error Rate
Productivity Rate
Resource Utilization Rate.

Learning and Growth Perspective Indicators such as:

Percentage of Trained Employees
Employee Retention Rate
Innovation Rate
Employee Satisfaction Rate
Skill Improvement Rate.

The cascading of strategic objectives onto administrative units involves both vertical and horizontal cascading to ensure alignment. This is done based on the contribution of each administrative unit, defining their objectives as follows:

Direct

Contributory

Operational (specific to the administrative unit)

This involves cascading objectives, targets, and initiatives to achieve the organization’s strategic objectives. Consequently, each administrative unit’s strategy plan is designed, illustrating the relationships with the main objectives.