Balanced scorecard makes strategy operational by translating it into performance measures. Operational orientation allows monitoring of the strategy via selected key performance indicators in a simple and easy way (status and change over time).

Balanced scorecard is a great tool to holistically track the execution of a strategy and understand the “causes – consequences”.

The balanced scorecard divides measures into the following interdependent perspectives – innovation, internal processes, customer and financial.

• • Balanced scorecard: Financial
    How is the success of the company seen by shareholders? The measures often relate to the creation of value, share price, market shares, growth rates, profitability margins and returns, liquidity, viability, cost reduction etc.
  • Balanced scorecard: Customers
    How is the company seen by its customers? The measures often relate to the customer needs (new market penetration, developing new products and services), customer satisfaction, customer loyalty etc.
  • Balanced scorecard: Internal processes
    How do people and processes perform? The measures often relate to the improvement of core competencies, improvement of technologies, production excellence, quality management, inventory management, motivating employees etc.
  • Balanced scorecard: Innovation
    What possibilities of development and learning do the employees have? The measures often relate to the key personnel, research and development, continuous improvements etc.

Balanced scorecard should consist out of well defined set of measures. Each one, should be attributed to one or more employees, responsible for its execution. Eventually it would allow better control over the implementation of the strategy and facilitate the elimination of bottlenecks.

Due to the integrity of the balanced scorecard framework, the measures defined provide compliance with the strategy and in no way encourage short-term activities that are harmful to the company in the long term.

In contrast to traditional thinking, the quantitative as well as qualitative measures are set in the balanced scorecard. Defining measures requires that one thinks about the possibility of updating and comparing the results, the degree of reliability, objectivity, appropriate responsible person, current state of the measures etc.

Strategy and the measures defined within the balanced scorecard framework are the base for preparation of other plans, such as marketing and sales plan, financial plan, and operational plan.

Interested in our support linked to strategy consulting ? Please contact us and we will be glad to prepare you an offer!

The post Balanced scorecard – strategic management tool appeared first on Consilue.

Benchmarking analysis is a business improvement tool that helps company achieving business excellence. By using the benchmark analysis we strive to philosophy of continuous improvements.

In combination with other strategic and business performance improvement tools it provides a good basis for strategic and operational decisions.

Benchmarking analysis is suitable for companies at all stages of growth. With this tool we compare revenue/unit, cost/unit, productivity/unit, quality/unit and other key indicators in an easy and reliable way.

Speaking from the operational point of view, benchmark analysis points out the business fields and areas where significant further improvements are possible. However, when we speak from the strategical point of view, the tool allows us to determine the best practices of the leading companies in the industry and broader, namely from companies with similar processes from other industries that could be applied on the subject company.

There are several types of benchmarking, depending on what do we compare and with whom:

Type: Strategic benchmarking analysis
Purpose: Enhancing the strategy
Description: Comparing long-term strategy that have enabled the success of the companies being analyzed – stress on core competencies, abilities to respond to changes in the environment, and R&D.

Type: Competitive benchmarking analysis
Purpose: Reducing the operational gaps
Description: Comparing the key performance indicators and identifying operational gaps.

Type: Business process and business function benchmarking
Purpose: Improving key business processes and functions
Description: Comparing the key processes and functions with best practices.

The input data for the benchmark analysis are most of the time gathered based on publicly available information, financial statements, questionnaires and in-depth interviews. The sources of information are internal as well as external.

Interested in these services? Please contact us and we will present you the cooperation and our offer!

The post Benchmarking analysis as a business booster tool appeared first on Consilue.