What is KPI Balanced Scorecard or Balanced Score card

Balanced Scorecard was developed by Kaplan and Norton who created a system for evaluating business performance which seeks to complement the financial indicators used traditionally by combining non-financial indicators in order to achieve a balance between the performance of the organization and its permanence over time.

This is a strategic tool very useful as it seeks to have indicators that are related to each other instead of isolated indicators and independently defined for each area of the company.

KPI or Key Process Indicator refers to the indicators that make a difference in the organizationand should always be checked for operational stability.

kpi balanced scorecard

Do you know what’s KPI Balanced Scorecard

The KPI Balanced Scorecard is a management tool for management strategy. This gives managers an overview of the business as currently must monitor several indicators in many areas of the organization at the same time.

Balanced Scorecard perspectives

The Balanced Score card considers four perspectives: financial, customer, internal processes and organizational learning.

Financial Perspective:

Financial perspectives measures the value creation of the company incorporating the vision of the shareholders.

This requires defining objectives and indicators that include financial parameters such as profitability, growth and shareholder value.

Some indicators of this approach are:

  • Costs reduction.
  • Increased productivity.
  • Assets Manegement.
  • Return on capital.
  • Investment strategies.

Customer Perspective:

The KPI Balanced Scorecard create the respective goal of serving the customer. Then the company can know the present condition and status with respect to their customers. Its necesarilly to have these metrics and also if is possible to conduct a survey as we may be below the average of other competitors, this in order that management be better for their benefit and rise the rankings customers service.

In this perspective it seeks to respond to customer expectations. The compliance to the objetives of this approach will depend generate income and thus generating value reflected in the financial perspective.

Some indicators of this approach are:

  • Customer satisfaction.
  • Complaints resolved all complaints received.
  • New customers.

Internal Processes Perspective:

For Balanced Score card this perspective take the indicators associated with the key processes of the organization and which depends on customer satisfaction and shareholders are taken. Financial and customer perspective usually develops before developing internal processes.

It should raise the opportunities for continuous improvement in processes, meet customer expectations, reduce costs, increase efficiency of processes, among other strategies.

Some indicators are:

  • Costs of failure.
  • Rework costs.
  • Costs of waste.
  • Time process.

Organizational learning perspective:

The staff of an organization is responsible for the optimal development of the above prospects and any strategy proposed. A satisfied and trained staff will develop processes value to customers generating an increase in sales directly influencing the company´s finances.

Some indicators of this outlook are:

  • Organizational climate.
  • Productivity.
  • Indicies job abandonment.
  • Employee satisfaction.
  • Implementation of the training program.

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