Monday, September 19, 2011

Balanced Scorecard Design - Cause and Effect Ties Among Key Indicators in Strategy Maps

Balanced Scorecard or BSC system has achieved a marvelous popularity these days. And that's no wonder since it's a radical performance evaluation manual as well as a strategic management tool, which seems pretty much like a magical stick for many companies gear up their businesses. But the fact is, to get the most out of the BSC tool you got to be precise at the design and implementation phase. However, let's get straight to the cause and effect ties that lie between the key indicators. A very important thing here is how much you are successful in preserving the balance among the key indicators or aspects of operational activity. This is pretty much tied to strategic mapping. Oftentimes, companies are aimed at putting clear priorities or ties among various key success factors.

This will become clear if you take a look at a few examples. First of all, you have to focus on the urgency of the developments in the computer literacy. Likewise, consider whether the performance of client support service is influencing the rate of constant sales.

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Did you ever ask what could turn out to be profitable - especially in the long run? This question is tied directly with the improvements of your business processes and price reduction strategy. Along those lines, it could be pretty logical if you build or craft a special scheme reflecting the interrelationship among individual indicators of your strategy map. As for example, when customers stay satisfied with your current product quality or client support service, they are pretty much likely to turn into loyal ones for your company. Needless to say, this will translate into better profits. Moreover, it could turn out to be a straight to implement for achieving finance related strategic goals. Such scheme can also underline the importance of individual indicators. As for an instance, customer service within the regional branches of the bank is fully characterized by some indicators which developed on the basis of client satisfaction index, and audit results or on time submission of yearly reports in their head office.

There could be however two kinds of cause and effect ties here. The first kind includes the ties which are measurable and can also be evaluated or analyzed on the basis of the underlying experience or recently conducted research. These might be, for instance, influence of the improvements in individual computer literacy on the added value of your company, or the reaction of the clientele the offered services or support. However, the second category implies the supposed ties. As for an instance, it's possible that you anticipate that the boost in total chunk of the visitors in the company's web page.

This encourages the managers of the company to thoroughly investigate the novel business opportunities and to make investments within the IT sphere. There could be numerous various results related to such a choice, but absolutely no research would prove or dismiss such an assumption. It's possible that the consequences of the interrelations of the various KPI within the strategic mapping could be made on the basis of the experience or results of the specialized research. Nevertheless, some certainty might also remain. For finding the root of the cause and effect ties, you got to get to the root of the cause and effect relationships among the KPIs.

Balanced Scorecard Design - Cause and Effect Ties Among Key Indicators in Strategy Maps

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