updated on 03 June 2021
The project scorecard, or balanced scorecard, is one of the most crucial visual management tools, which allows managers to get a comprehensive understanding of their organization and turn their strategic vision into actionable and measurable steps.
We all know that how you measure organizational performance can make the difference between achieving your objectives on time or getting lost in the details of your strategy. For that reason, it is best to use a project scorecard to ensure that you’re on the right track.
In this article, we will take a look at what a project scorecard is, how it works and how you can create a project scorecard all on your own.
What is a project scorecard?
A project scorecard is a strategy management framework developed by Robert Kaplan and David Norton in the early 1990s to help organizations have a more balanced view of their performance, which goes beyond revenues, costs, and profits. In the past, businesses used to focus mainly on financial measures when it came to developing and managing their strategic plans. This offered them an incomplete picture of how their organization was actually performing.
Nowadays, organizations can use the project scorecard to bring balance and alignment between the high-level strategy and the low-level strategic measures, targets, and initiatives, making it easier to manage and track projects. This tool also helps managers clearly communicate the strategic objectives across the whole organization, along with the company’s mission and vision.
The balanced scorecard framework is based on both leading (drivers) and lagging (outcomes) indicators. While leading indicators help you look forward to the path that leads you towards achieving your goals, lagging indicators give you an overview of the current situation, allowing you to see how far you’ve got.
Together, these elements enable you to efficiently track and measure your performance and be better prepared to face the unforeseen challenges that the future may bring.
What is a project dashboard?
The project scorecard is closely linked with another essential project management tool, the project dashboard. Simply put, a project dashboard is a performance monitoring tool that shows you the key performance indicators (KPIs) relevant to your project’s success. These project metrics allow stakeholders to leverage real-time data when checking on a project’s overall performance and progress and uncovering potential problems.
The main difference between the balanced scorecard and the project dashboard is that the latter focuses on operational performance (short-term goals) while the former is mainly used to measure the performance of high-level, long-term objectives.
Nevertheless, a reliable project scorecard software will let you develop and manage both the project scorecard and the project data dashboard and empower you to create compelling visuals with the help of graphs, charts, and timelines (such as the Gantt chart).
What are the four perspectives of a project scorecard?
The balanced scorecard helps you evaluate the health of your organization by taking into account four main perspectives:
- Learning and Growth -The learning and growth perspective looks at how well knowledge is captured and implemented by your employees to create a real competitive advantage. This perspective also covers the organization’s ability to foster innovation through the use of modern technologies.
- Internal Business Processes - The next perspective focuses on your internal processes and how you can optimize them to uncover and remove bottlenecks, increase overall productivity and meet financial and customer-related goals.
- Customer -This perspective targets your customers’ perception of how your organization is performing compared to your competitors. Also, this perspective emphasizes what measures you should adopt to increase customer loyalty and satisfaction and build brand recognition and trust.
- Financial - Last but not least, this perspective concentrates on your financial performance. Although your company’s financial health represents a lagging indicator, it’s still essential to have a look at your return on investment, profit, budget, and cost-saving measures.
Each perspective focuses on a different part of your business and includes specific strategic goals relevant to the execution of your main organizational strategy. A strategy map like the one you can see above shows you exactly how these strategic objectives are related to each other using a cause-and-effect chain.
Moreover, the strategy map can include other crucial components of a project scorecard such as measures (KPIs), targets (specific milestones), and initiatives (the actions in which you invest resources to achieve an objective).
This visual representation also serves to illustrate the fact that these four perspectives are not independent of one another but rather they build upon each other. When you have a well-trained workforce and a strong knowledge-sharing culture, your company runs more smoothly, which, in turn, allows you to focus on how you can provide customers with better products and services. If your customers are satisfied, they will be more willing to buy from you.
How to build a project scorecard like a pro in 5 steps
There are two ways to go about building a balanced scorecard: either you choose to customize a pre-designed PowerPoint scorecard template or you start drawing everything from scratch. We stand for the first alternative as it allows you to effortlessly create impressive scorecard visuals in no time thanks to the user-friendly drag and drop features.
However, if you’re still determined to build your own template, here are 5 easy steps you can follow to create a basic project scorecard from start to finish:
- Identify the company’s vision and mission
The strategic plans that you will develop, track and maintain will have to relate to the core vision of your organization and your mission statement.
- Add the four perspectives
The four perspectives of the balanced scorecard ensure that you get a complete overview of your organizational performance.
- Choose the right strategic objectives
When choosing the strategic objectives for each perspective, you have to make sure that they are S.M.A.R.T. goals (specific, measurable, achievable, realistic, and time-specific) and that they support the company strategy that you have already developed.
- Outline the measures and targets for your objectives
Your scorecard should include a number of specific measures to track and targets to achieve for each of the objectives you’ve chosen at the previous step. These elements will provide you with a clear view of the project status and help you spot any possible delays.
- Create a strategy map
The strategy map is a diagram that illustrates the connections between your strategic objectives and enables you and your team members to see how short-term initiatives contribute to the organization’s broader high-level goals.
Use Office Timeline to create your own balanced scorecard
If you want to start using a project scorecard to measure business performance within your organization, it’s probably time you considered investing in a professional scorecard software automation tool that will allow you to easily create, track and manage memorable project visuals.
Office Timeline is here to help you turn complex project data into easy-to-follow, beautiful slides that customers and managers will simply love. Our desktop tool integrates smoothly in your PowerPoint app to add a wow factor to your usual executive presentation. Check out our gallery of scorecard templates if you need to get started quickly or join one of our free webinars to learn more tips and tricks.
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