The Balanced Scorecard (BSC) is one of the most popular performance management tools for businesses. Businesses have long understood that relying exclusively on financial measures to determine success hampers long-term sustainability. The BSC, developed by Dr. Robert Kaplan of Harvard University and Dr. David Norton in the 1990s, goes one step beyond by incorporating three additional components namely Customer, Internal Business Processes and Learning & Growth to give a holistic and balanced view of an organization’s health and performance.
Many of you might already know that designing BSC for your enterprise entails the creation of a big-picture strategy for each function, coupled with concrete, actionable steps that emanate from them. These actionable steps or activities support the achievement of the key objectives, as indicated by the fulfillment of pre-established Key Performance Indicators (KPIs). Finally, the exercise culminates into an overall strategy map is which helps you establish the relationship matrix among all the four aspects of the BSC and gauge how they contribute to the growth of the organization in the long-term.
WHY IS BSC NEEDED?
The BSC has a lot of benefits to offer to modern organizations:
- It helps translate and articulate the company’s vision in a manner that’s easily understood by both employees and other key stakeholders.
- It enables processes by which the smaller, routine tasks in the form of projects and initiatives can be aligned with the overall business strategy.
- It enables you to understand the priorities in terms of customers, projects, services, products, and resources.
- It supports the strategic planning of the targeted performance measures to achieve the desired results.
ELEMENTS OF ENTERPRISE BALANCED SCORECARD
There are four major components of enterprise BSC:
- Learning and Growth or Organizational Capacity: The learning and growth component tracks how well an organization is able to assimilate and accumulate knowledge and informational resources in a manner that gives it a competitive edge.
- Internal Business Processes: This is a measure of how smoothly and efficiently the business is functioning from an operational perspective. More specifically, the internal business processes look at speed-to-market, analysis of bottlenecks and delays and control of wastage.
- Customer: The customer is one of the fundamental components of the BSC. The customer component looks at how satisfied customers are with the business’s products and services
- Financial/Stewardship: The financial component looks at the business performance in terms of growth targets, sales, expenditures, liquidity coverage, variances, and so on, and how well the financial resources are being utilized (as indicated by asset turnover ratios).
INTERESTING STATISTICS ON ENTERPRISE BALANCED SCORECARD
Since its inception, the Balance Scorecard has gained a reputation for being one of the most consistently popular and widely used performance management tools as reported by Bain & Company’s Annual Study of 2017.
2CG’s 2018 Balance Scorecard Usage Survey reports the following:
- 75% of respondents reported that their BSC was extremely or very useful.
- 79% of respondents confirm that the BSC continues to work primarily by influencing the actions and behaviours of managers and individuals.
- 96% of respondents indicated an intention to develop their Balanced Scorecard further in 2019.
CHALLENGES IN APPLYING BSC
Despite its proven utility and wide popularity, the BSC is riddled with implementation challenges. While the BSC is relatively easier to ideate and theorize, operationalizing it into real-life actions and bundling it with metrics to measure progress accurately is a major stumbling block, and often a tedious and frustrating process.
This is especially true when one alludes to the non-financial components of the BSC. While operational efficiency in internal processes can be measured, tracked and optimized in quantifiable terms to some extent, the other two components (customers and learning & growth) are especially cumbersome to model, monitor and evaluate.
The BSC also gets harder and harder to put into action as an enterprise scales up significantly, and delays in measurement and response mechanisms creep in. It is a complex framework that encapsulates multiple, disparate and multivariate metrics, which require meticulous data collection from within and outside the enterprise, cleaning, pre-processing, unification and analysis of the data, and creation of a smart insight grid that powers real-time decision analytics and progress optimization at scale. Further, much of the data generated in the context of the BSC is likely to be semi-structured or unstructured. Annotating this data in the right functional purview and extracting meaning from it to automate the on-demand generation of insights in natural language is the need of the hour for successful implementation of the BSC.
This is where MECBot comes in.
FROM BSC TO FORCE WITH MECBot
Our flagship product MECBot is the #1 Augmented Data Management Platform for Real-Time Analytics at Scale. MECBot puts your business first by adopting the Business Domain Entity-Model approach without any dependency on the underlying databases or the structure of the data. It comes bundled with a self-service, intuitive interface and takes care of all your data management and analytics requirement in a centralized manner, including scalable deployment.
MECBot is your one-stop destination for seamless implementation of the BSC, as envisaged by our 5-pronged approach to enterprise analytics: Financial, Operational, Research, Customer and Execution (FORCE). While the first four parameters are in common with the BSC, it is the fifth component (Execution) that sets us apart from Traditional Analytics.
Here, we share with you a brief snapshot of each of these five functions and how they are executed by MECBot.
Financial: MECBot’s smart data fabric correlates your enterprise’s financial trends with key economic resources & industry databases, enabling you to detect patterns intelligently and take corrective actions.
Here are the top 5 questions answered by MECBot on the financial health of your enterprise:
- Is your business generating profits in a sustained manner?
- Are your business assets being utilized efficiently?
- Is your business growth rate ahead of the industry curve?
- Are you able to streamline and minimize your enterprise costs?
- Is your business topline contributing meaningfully towards augmenting your market share?
Operational: At the heart of MECBot’s enterprise intelligence is its ability to streamline business operations through a data-driven approach. MECBot seamlessly blends with your enterprise workflows, hydrating itself with fresh insights. This creates a dynamic, smart insight grid that always runs in the background.
Here are the top 5 questions answered by MECBot on the operational success of your enterprise:
- Are you able to attain cost leadership through improved productivity, higher efficiency, and reduced cost-to-serve?
- How quickly are you able to adapt your processes to match ensuing changes in the external environment?
- How best can you improve the quality of your products and services, while reducing the time-to-market?
- Which are the bottleneck activities in your enterprise at present? Which are the technology bottlenecks you need to overcome?
- How can you improve the quality and volume of output created by your team, while retaining and nurturing talent at all levels?
Research: MECBot turbo-charges your data at all levels such that your organization becomes a learning machine, enabling you to delve deep into powerful decision analytics and actionable insights in real-time - all of this is centralized and made available to your team in a gated manner at enterprise scale.
Here are the top 5 ways in which MECBot helps you become a research-oriented organization and be in continuous learning mode:
- Access and unify disparate, siloed data sources in real time
- Implement centralized data management and processing
- Protect enterprise data with banking grade security and recovery protocols
- Bring about consistency, integration, and versatility in hybrid cloud environments
- Optimize data and IT investments, reduce sunk costs caused by technology and data obsolescence
Customer: Did you know? MECBot is your go-to tool for creating a highly differentiated customer experience that seamlessly translates into augmented topline for your business. Easy-to-deploy customer analytics tools like 360o profiling, look-alike analysis, CLV optimization, loyalty scoring, and intelligent segmentation can be carried out with just a few clicks.
Here are the top 5 ways in which MECBot helps you engage and retain your customers:
- Creating and distributing highly personalized communication and marketing campaigns
- Targeting the right product for the right customer
- Overcoming product usage challenges seamlessly
- Collating customer feedback from multiple company interfaces and acting on them promptly
- Maximizing brand loyalty and boosting customer lifetime value (CLV) manifold
Execution: With MECBot, a business model can be directly created by CXOs or Data Scientists or Data Analysts or all of them collaboratively. MECBot directly pulls the data from the configured sources and maps it to the specified Business Domain-Entity Model. Data engineers can configure MECBot with available sources and provide the details on interlinkages.
Here are the top 5 ways in which MECBot helps you in implementing the BSC at the pace of the enterprise:
- Provides advanced analytics modules that work out-of-the-box and allows you to build models like loyalty, churn and segmentation without dumping the file or moving the data around
- Keeps your analytics outcomes up-to-date by keeping the underlying view hydrated with the incoming data
- Allows you to create flattened data view for the chosen entities without writing any complex SQL joins
- Reuses existing views as well to get you started on the same day instead of waiting for months to get it up-and-running
- Deploys exploratory analysis and advanced analytics modules that are built on top of a smart enterprise graph that captures your business domain in the most comprehensive manner
With MECBot, there is no dependency on data team in terms of their skill set to deploy a solution or requirement to scale the data team as per demand. This reduces your technical debt drastically and allows you to scale-up and scale-down dynamically using MECBot instances on demand or based on the load on the system. We serve your current and future analytics requirement without independent of the underlying technology, data sources or data team. Our built-in free form search makes coding redundant - you can extract self-service insights on demand by posting query in simple English language to MECBot.
The following image summarizes how MECBot fosters augmented data management for your enterprise:
Interested to know more about how MECBot can help you implement the BSC and boost your RoI manifold with Augmented Data Management? Visit www.mecbot.ai. To know about the state-of-the-art technologies we use, check out our platform architecture here: https://formcept.com/platform/
Wish to take a deep dive into what MECBot can do for your business? Request a demo here: https://formcept.com/contact-us/