Bsc And Applied Research

The objective of this document is to explain the Balanced Scorecard clearly and concisely and how to implement it correctly. It discussed the Balanced Scorecard's origins, attributes and what it accomplishes for an enterprise. The BSC methodology has been widely adopted throughout the world. In fact, an estimates that "at least 40% of Fortune 1000 companies will implement a new management philosophy - The Balanced Scorecard - by the year 2001". The growing popularity of this tool demonstrates that it is vital for managers to expand their analysis perspective.Today's business managers can be likened to enterprise physicians who monitor the vital signs of their enterprise. The document expounds upon this illustration to explain the attributes of the Balanced Scorecard.The advent of the Information Age has hastened change within the enterprise. In the minds of many, information has become its most important asset. Hence, information analysis must be equated with enterprise life support. However, in a vacuum, such analysis provides little strategic direction. In the 1950s, Peter F. Drucker set a precedent, which revolutionized the management discipline. He integrated a strategic element into enterprise performance analysis with his methodology, 'Management by Objective'. This system metamorphosed an enterprise's mission statement and strategy into quantifiable measures, specifically in the areas of human resources, financial, productivity and innovation. Management by Objective set a trend, which led to the invention of a variety of business performance management and business process reengineering methodologies. Practices such as benchmarking, total quality management (TQM), activity-based costing, performance management - and finally, the Balanced Scorecard - have experienced a groom during theexecutive. In 1992 the inventor of the Balanced Scorecard, Drs. Robert Kaplan and David Norton, debuted their methodology in the Harvard Business Review. Then, in 1996, released The Balanced Scorecard -Translating Strategy into Action. Financial metrics typically tell how an enterprise has performed, but give rather little indication as to how it will perform. A true Balanced Scorecard must include metrics that provide both historical and future insights. Thus, an enterprise scorecard must be comprised of both leading and lagging indicators. Leading indicators are measures, which drive performance, whereas lagging indicators are actually results of enterprise performance. The balanced scorecard suggests that we view the enterprise from four perspectives:The Learning and Growth Perspective The Internal Process Perspective The Customer Perspective The Financial Perspective The Balanced Scorecard is a comprehensive, top-down view of enterprise's performance with a strong focus on vision and strategy. To develop an effective scorecard, one must begin with the enterprise's vision (i.e., mission). Next, managers must decide which strategy (ies) will lead to successful goal attainment. This strategy is translated into specific tactical performance-driving activities. Finally, metrics are established for each activity. These become the enterprise performance measures.