The term “BSC” is becoming more and more popular and is an extremely effective method in corporate governance. The effectiveness of BSC has helped it quickly be applied by thousands of businesses, government agencies, and non-profit organizations around the world, including Vietnam. So do you know what BSC is? Let's find out with Giaiphapdonggoi.net now!
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1. What is BSC?
BSC stands for "Balanced Scorecard" - a balanced scorecard is a business framework used to monitor and manage an organization's strategy.
What is BSC?
The BSC framework is based on a balance between leading and lagging metrics, which can respectively be seen as the driving force and outcome of your company goals. When used within the Balanced Scorecard framework, these key metrics tell you whether you're achieving your goals and whether you're on track to accomplish your goals in the future. are not.
With the Balanced Scorecard, you have the ability to:
Describe your strategy.
Measure your strategy.
Track the actions you're taking to improve your results.
Origin: In 1992, Dr. David P. Norton and Robert S. Kaplan have started a working group to examine the challenge of reporting only on financial measures. In for-profit organizations, financial measures provide a late report (i.e. they tell you what happened last month, quarter, or year), but they cannot look ahead. They want to look specifically at what metrics that can look over time and act as leading metrics might look like and how that might affect the organization's strategy.
2. Lingo 101 . Scoreboard
Lingo Scoreboard 101
If you're building a Balanced Scorecard, you'll often hear the words "objective," "measure," "initiative (or project)" (initiative (or project)). ) and “action item”. Here is a quick cheat sheet to explain all they mean.
You have a high-level goal in mind, that's your goal.
The metrics say, "How do I know that I'm reaching the goal?" (In other words, they let you see if you're reaching your goals.)
Initiatives are devised to answer the question “What actions am I taking to accomplish the goal?” In theory, these are the places where you're spending money or putting effort into improving your performance.
Action items help delegate small tasks that will allow you to complete your initiatives.
Remember that you can have many initiatives focused on improving measures and achieving your goals. And if your projects aren't helping you improve in these areas, you may need to rethink your overall strategy.
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3. Simple analysis of BSC . frames
During the creation of the BSC, Norton and Kaplan realized that an organization must first start with goals that can be broken down into four distinct, uniquely connected perspectives:
Simple analysis of BSC . frames
Financial Goals - "What financial goals do we have that will impact our organization?"
Client Goals - "What is important to our customers, how will this affect our financial situation?"
Process objective - "What do we need to do well internally to meet our client's goals that will affect our financial position?"
People (or learning and growth) goals - "What skills, culture, and capabilities do we need in our organization to execute the process that makes customers happy and ultimately impacts our financial status?"
Over time, the concept of a strategy map was created. Strategy Map The Balanced Scorecard is a one-page visual description of an organization's scorecard. It is capable of showing the relationships between all four views in a one-page picture.
4. How is BSC commonly used?
How is BSC commonly used?
Most commonly used in three ways:
First, to bring an organization's strategy to life. The people in the company can then use this strategy to make company-wide decisions.
Second, to communicate the strategy throughout the organization. This is where the strategy map is very important. Organizations print it and include it in inter-office communications, include it in their intranets, communicate with business partners, publish it on their websites, and more.
Finally, to monitor strategic performance. This is usually done through monthly, quarterly and annual reports.
The Balanced Scorecard has proven to be applicable across all industries - for-profit, nonprofit, government, healthcare, etc.
- and for organizations of all sizes.
Typically, it is used by leadership teams at the executive level of the organization or at the divisional or departmental level. One of the keys to an effective scorecard is leadership. It may seem obvious at first, but it's easy to get excited about the concept of earning points, as it's relatively simple to implement and move forward with no real support and understanding from your side. leadership team you need.
The reason this can be such a struggle is that to make BSC work in your organization you have to change the way you currently manage. You will have to stop weekly KPI reports or weekly leadership meetings and integrate any strategic management tactics into your scorecard. Of course, if your leadership team doesn't like the concept, they won't be obligated to change their approach to strategy and management.
Giaiphapdonggoi.net provides a definition and answers to the question of what the BSC balanced scorecard is through the content of the above article. In the process of digital transformation of businesses, the application of more card balance points to business processes will help increase the effectiveness of the strategy.
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