Balanced Scorecard Tools: Capabilities, Benefits, Selection Criteria

Balanced Scorecard Tools for the Effective Implementation of Strategic Plans

When put to use properly, a balanced scorecard (BSC) equips companies of all kinds and sizes across different sectors and industries with the in-depth insight into how to best articulate and act upon their strategy. Breaking down a strategic vision into small actionable steps that are monitored on a daily basis, the BSC provides an organization with a clear direction towards achieving its set goals.

To ensure performance is on track and strategic plans are effectively implemented, enterprises need to constantly review and update their balanced scorecard as it evolves. Many of them do so with the help of a spreadsheet tool, presentation platform or business intelligence solution. However, these programs may not be the most sustainable option as they often prove either too limited, costly or time-consuming to use and upkeep.

To this end, experts argue that opting for a scorecard-specific application is the answer and choosing the best fit to manage your BSC makes the topic of this page. Below, we offer a series of guidelines in this respect which cover:

1. What is balanced scorecard software
2. Benefits of using dedicated scorecard software
3. How to choose the right software
4. Conclusion

1. What is balanced scorecard software

Balanced scorecard software represents any designated means that enables an organization to monitor and manage performance metrics and strategy implementation to accomplish future goals. There are many tools, such as scorecard templates, which can help you get you off the ground quickly, but you will need a more comprehensive solution to get you started AND keep you running. Dedicated balanced scorecard software does that, especially if you have to scale up or make changes. It helps you capture, develop and track the following:

• Strategy maps
• KPIs
• Related Initiatives
• Visualization of organizational structure
• Performance reports
• Dashboards
• Knowledge base access and access rights

2. Benefits of Using Balanced Scorecard Software

Apart from saving time and efforts, using a dedicated scorecard tool will allow you to:

• Emphasize visual data representation – specific-scorecard applications are designed for executive audiences, providing charts, graphs, reporting functions, and customization options that will enable you to add the degree of detail you want to your scorecard. They also often support root-cause analysis through a variety of drill-down capabilities, which will help you to create a compelling strategy map that everyone in your organization will understand.
• Integrate enterprise-wide data – gathering data from a variety of operational systems, balanced scorecard tools will help you process and update information faster through automated actions, control versions more effectively, and better structure your reports so your teams or executives can interpret them more easily.
• Facilitate collaboration – professional scorecard tools include alert subscriptions and a workflow engine to support information sharing, solution development, and progress tracking.
• Support all organizational levels – a quality balanced scorecard software ensures structure and access control, which lets you present relevant information to particular teams or individuals in accordance with the permissions they enjoy. In addition, it also makes it possible for data to roll up to or down through the organization.

3. How to Choose the Right Balanced Scorecard Software

To easily find the most appropriate balanced scorecard tool for your organization, you can use the following items as your selection criteria:

• Technical reliability – look for products where development and deployment are done according to the latest technology standards and through a web browser; if your options include web-based solutions, cross-browser compatibility is essential;
• Ease of use and functionality – choose a product that is ready-to-use, intuitive, functional and where data entry is possible through web interface, file upload (common data file types like Excel or MS Project), or automated with a database connection.
• Good strategy map design – any of the products considered should support the creation of strategy maps with drill-down capabilities. This means you will be able to start out from a blank format and then add text, numbers, images, shapes and graphs to generate a clear visual representation of your data.
• Cascaded scorecard drill-through function – seeing that the successful implementation of an organization’s strategy requires a roll-out from the top down to department, group, or even to the employee level, you should search for a product that accommodates multiple cascaded scorecards. This will help you navigate and easily access sub-scorecards or individual measure views in order to roll-up information from multiple scorecards into higher-level scorecards.
• Communication components – the software that you want to use should allow you to create comments on each level of the scorecard, be them general or period-specific. Alerts, such as notifications when your metrics need updating or approach their deadline, are essential in this respect.
• Status and % complete indicators – a good balanced scorecard tool lets you easily align objectives and activities and show their progress and status, thus indicating whether performance is on track or not.
• Customized/automated scoring and weighting of structure elements – with the chosen solution, you should be able to build your structure, enter your measure values, customize them based on color codes and then automatically update the scorecard when necessary.
• Initiative management functions – since a strategic plan relies on a series of initiatives to accomplish its underlying goals, you will need a product with modules to manage these actions such as the ability to create tasks and milestones and assign them to teams or individuals.
• Reporting and export capabilities – with balanced scorecard management depending on getting important information to the right people at the right time, the ideal tool helps you to pull data out of your scorecards in various formats for relevant reporting or briefing purposes.
• Integration with other tools – look for software that efficiently integrates with other data management platforms used in your organization; this way, you can ensure an easier and wider circulation of information processed through various sources.
• Training and customer support – a good software solution would be one that comes with knowledge resources to curb the learning curve and technical assistance in case users need help and fixes.

4. Conclusion

Choosing the proper scorecard software for your organization will enable you not only to create clear data representations, but also to lay the groundwork for:

• the effective execution of the strategic measures delineated by the balanced scorecard;
• the alignment of day-to-day operational activities with the company’s overall vision;
• the clear measurement of business performance;
• a continuous feedback mechanism to support improvement at the level of strategic performance and results.

If you need more data to support your choice, check out our blog post on the 5 best balanced scorecard software solutions .