Balanced Scorecard
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Balanced scorecard
A balanced scorecard helps a business to achieve its goals while looking after the welfare of its employees at the same time. The word balance in this case simply means viewing from all perspectives. A balanced scorecard concentrates on the financial aspect of the business, the customers, the internal process and organizational capacity. How the balanced scorecard with help management to identify information requirements.
For an organization to effectively plan its operations there must be strategies in place to detect any risk and tackle any challenge. There are different ways that help an organization in acquiring information required to ensure that the organization is a success.
Financial records of an organization
Financial records are meant to determine where the company is heading in terms of success. There are different ways to monitor the financial state of the company (Cummings, 2002).
a) Profits
One of the main reasons why an organization strives to succeed is to make profits. An organization can use the profits it makes to know if the company is heading to the right direction. A company knows that it is not in a good state if the profit margin reduces. In such a case an organization is able to look into weaknesses or shortcomings that might be leading to reduced profits. When a company experiences an increase in the profits it knows that the business is headed to the right direction and from there it can increase the number of its employees or venture into production or sale of other products.
b) Cost
No matter how much a company makes in terms of profits as long as the costs are high the company will not enjoy the profits made. The company must look into its expenditures such as transport and damage cost. A company that deals with grocery for instance, must be prepared to meet any damage cost so as to improve customer’s trust considering most of the products might be delivered to the customers by the organization.
c) The customers
Customers play a big role in making a business succeed or fail. The best way for the company to maintain its trust to the customer is by maintaining a close relationship with the customers. Most customers are attracted by trust, quality services and goods of high quality (Robbons, 2013). Being an online company the company has one of the best platforms in making sure that it communicates with the customers continuously. Increase in the number of customer’s leads to increased profits which makes it easy for the company to fund its operations and run its affairs smoothly. Reduced number of customers helps a company to know they might be something that might not be okay somewhere. The company can decide to investigate on what is really not working in line with its strategies or amend the strategies that might not be working in favor of the company.
d) Internal process
Internal process refers to the activities and operations that take place in an organization. A company depends so much on the internal process, in making profits and satisfying customers. A company that fails in having an effective internal process incurs losses and this helps the organization to know if they should be a measure taken to save the organization
e) Organizational capacity
Organizations differ in a number of ways; there are organizations with a big capacity and organizations with low capacity in terms of production. An online grocery company is an organization with a big capacity due to its unlimited capacity as far as reaching a wide variety of customers is concerned. Internet has created one of the best selling and advertising platforms. However, there is more than just selling online for the online company. The employees must be qualified enough to strategize on ensuring that online marketing works for the advantage of the company. Unqualified personnel will lead to reduced sales and that will raise an alarm. The organization can use organizational capacity to determine on if there is a need to add more specialists or suck the employees who are not performing to the standard of the company.
IS system for management to use
In order to gain maximum benefits from the organization, management should be keen to exploit the capabilities which are present in the entity. Information systems gain their utmost importance in the event that data processing from organization inputs is exploited, for the sake of generating information useful for the management. The information system would recommend is the customer relationship management system, for each of the balance scorecard variables (Cummings, 2002). With good customer relations, it will be easier to implement the business intelligence systems and at the same time, be able to adequately synchronize the sales and marketing efforts in the company. The use of both the business intelligence information systems and the customer relationship information system will highly benefit the entity. The main aspect to be considered is the strategy which should in the long run be embraced to cater for the effectiveness and operational efficiency in the different functional units which make up the entity.
References
McKeon, M. (2014). The innovation book: how to manage ideas and execution for outstanding results. Harlow, England New York: Pearson.
Cummings, T. (2002). Organization Development and Change. New York: John Wiley and Sons.
Robbins, Stephen P. (2013). Essentials of Organizational Behavior, 12th Edition. Pearson Learning Solutions: Vital Book file.
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