Balanced Scorecard Case Study Infosys News

Definition: Balanced Scorecard is a performance-based metric tool which is used extensively by various businesses across sectors to align activities to the vision or the overall goal of the organization. The approach is very effective in setting, as well as tracking key objectives of the organisation.

Description: Balanced scorecard approach is a system that is designed to divide the company's mission statement into small, but well-defined goals. It helps the company to monitor the performance with respect to the overall goal and objectives set in the mission statement.

It analyses the performance of the organization in four different ways. The four key areas include customer analysis focused on customer satisfaction, financial performance, internal analysis, and learning and growth analysis.

Let's look at each one of them in detail:

Financial measure is most important to the company's shareholders as it gives a bird's-eye view about the company's profitability in few key ratios. Some basic performance metrics which are calculated include: return on capital employed (ROCE), cash flow, project profitability, sales backlog and profit forecast reliability.

Customer perspective includes metric used to measure customer satisfaction which is very important in maintaining a healthy business relationship. Although the metrics are business-specific, some of them include customer ranking survey, pricing index, customer satisfaction index, and market share.

Internal processes are focused on measuring the life cycle of the project launched, till its completion. The metrics could vary from business to business but some of them commonly used are - success rate, safety incident index, project performance index, and project closeout cycle.

Innovation and improvement focuses on driving improvement in all aspects of the business. It is a much wider term in terms of its application.

An organisation must always strive to create efficiency across all verticals. It includes metrics like - what percentage of revenues are coming from new services, revenue per employee, etc. All these metrics help in measuring the efficiency.

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