The Balanced Scorecard is a management framework that’s used to track strategic goals, KPIs, and projects. When used correctly, it accelerates and improves an organization’s ability to execute its strategy.
The catch is that managing a Balanced Scorecard is no easy task. When an organization starts this process, there’s usually a learning curve, and it’s better to initially manage your scorecard with “manual” programs like Excel or PowerPoint. But sooner or later, you’ll experience challenges that indicate it’s time to graduate to more sophisticated systems—like Balanced Scorecard software. The most common issues an organization faces when trying to manage a Balanced Scorecard without software include:
- Gathering data takes a lot of time because it’s owned by many people, scattered across the organization.
- Reporting for each element doesn’t happen on a regular (typically monthly and quarterly) cadence.
- Different people want to report in different formats.
- Data isn’t adapted for different reports and audiences.
ClearPoint solves all these problems. Our Balanced Scorecard software is built to help teams save time and effort as they work toward achieving their strategic goals. Our technology enables organizations to:
- Get everyone on the same page with a SaaS platform that acts as a central hub of information.
- Assign different ownership levels to multiple users.
- Automate monthly or quarterly reporting, from data imports to email reminders and report formatting.
- Receive alerts and notifications when information is updated.
- Create a variety of chart types and custom fields on pages.
- Generate summary reports and briefing books, which can be templated for different audiences and timeframes (e.g. send a report to the management team on the 1st of every month and a different report to the leadership team on the 15th).
If you’re suffering from the pains of using Excel and PowerPoint to manage your strategy, graduating to a Balanced Scorecard software is the best next step. Sign up for a tour of ClearPoint’s system and see all of our scorecard management features.
On the other hand, if you’re just getting started and need more information about how to create and manage a Balanced Scorecard, keep reading to learn more.
Balanced Scorecard Definition
The Balanced Scorecard (BSC) framework has been used and adapted over the last 20 years by thousands of organizations. Because of its flexibility, the BSC can be seen as a “framework of frameworks,” allowing organizations to manage the Balanced Scorecard with other strategic frameworks embedded. For example, you can have a BSC and also use Economic Value Added (EVA), Total Quality Management (TQM), Six Sigma, Lean, or other strategic management approaches.
The BSC is a comprehensive management framework—which is where its value lies. It helps you put your entire strategy in one place through finance, customer, internal, and people perspectives with objectives, measures, targets, and initiatives. But in order to get the most value from it, you have to actually use it as a management framework—not just as documentation for your “five year strategy plan.” The companies that get the most value from their scorecards track their objectives, measures, and projects on a monthly or quarterly basis—not just “every once in awhile” or every several years.
So this begs a question: What is the most appropriate way to actually track your scorecard on a regular basis? Most organizations use Excel, enterprise resource planning (ERP) software, or Balanced Scorecard software. Below, we’ll walk through the benefits and considerations of each—so you can pick the tracking method that is most appropriate for you.
Balanced Scorecard Tracking Options
Excel & PowerPoint
Most organizations start by tracking their scorecards in Excel and PowerPoint. For small organizations and those just beginning with a Balanced Scorecard, Excel can be a great tool. It can create quick tables and charts, and it is flexible for manipulation and quick changes.
And because most scorecards are presented and discussed with the leadership team in front of a projector, PowerPoint is an obvious option. It requires little to no learning for the person putting the presentation together.
The problem is, the benefits of Excel and PowerPoint are not long-lasting. Version control in Excel, for example, can be a nightmare to deal with. Consider this story:
“I built up quite a bit of Excel experience in my days as a consultant and VP of strategy in a manufacturing company. When I joined the company, they were running their entire production schedule from a single spreadsheet, which was stored on an open-permission file server. One hundred and forty employees had access to the file on any given day, and it was very common to have someone make unauthorized edits to the production schedule. This meant we would have no idea when a product needed to be built and shipped.”
Chintan Sutaria, Founder of VisionPDM
While this Excel disaster isn’t specific to scorecarding, it is indicative of what could happen if too many cooks are in the scorecard kitchen. Ensuring that each person in your organization is updating the most recent version of your scorecard is critical—so when your scorecard becomes more complex or robust, using Excel becomes almost impossible.
The final word: Excel is great when you’re getting started with your Balanced Scorecard, but you’ll have issues with scalability.
Enterprise Resource Planning (ERP) Software
If you work at a large organization, you likely have access to SAS, SAP, Oracle, or another piece of enterprise resource planning (ERP) software. If your organization has a dedicated software vendor, he will likely tell you, “We already have access to a Balanced Scorecard module through [said ERP solution]!”
The biggest issue with ERP solutions is the cost of integration and configuration.
In fact, you could easily spend $250,000-$500,000 configuring the ERP module to work for scorecard management—and could take 6-18 months to get up and running. Even if you are able to configure it correctly, changes and upkeep would need to be managed internally from your IT department—which, depending on their bandwidth, could be time consuming (and a big headache for them). For example, ERPs are not designed to track data and create appropriate reports in the same manner that your scorecard needs to be tracked—so your IT team would have to jerry-rig an extreme configuration. The IT team would also be on task for making updates on a regular basis.
The final word: Most organizations find the end result of an ERP/scorecard mashup is not worth the money or the time.
Balanced Scorecard Software: What To Look For
Between the two extremes of the unmanageable Excel and an expensive ERP scorecard is Balanced Scorecard software. A great scorecard software option is robust, highly configurable, and available at a manageable price point. And ideally, the software you choose should be able to communicate with both Excel and ERP applications via API or data loader tools.
To understand the value of scorecard software, it’s important to review (and discern between) the elements of scorecard management.
When you’re managing a scorecard, you need to start with your objectives, or goals. There are two ways you’ll know if you’re accomplishing those objectives: through measures and initiatives.
- Measures are typically tracked with quantitative data that can be plotted on a chart. (If you’re using Excel for your scorecard “software” today, you probably want the ability to create charts from your measure data.)
- Projects typically track start dates, end dates, percent complete, milestones, and more.
In an effective Balanced Scorecard, you’re reviewing both measures and projects for every objective, and then writing up your analysis about the results. This helps other team members understand what is going on with each particular goal.
Bring together all your metrics to analyze how your organization is doing with our Department Performance Dashboard.
Balanced Scorecard software provides value by giving you the ability to bring all of this together. With scorecard software, you can examine measures, data, calculations, and evaluations in order to drill down on projects (with start dates, end dates, percent complete, and milestones)—and then bring these things together at the objective level with qualitative information, RAG status indicators, etc. In other words, software gives you the ability to drill down to the appropriate details you need when examining a goal. You also need to have ownership and accountability of the elements in your scorecard, and typically this is native to a BSC application.
If you’re exploring scorecard software, take a look at ClearPoint. This comprehensive tour will tell you all about the features you want and need. But don’t just take our word for it—get free and instant access today so you can start managing your scorecard right away.
8 Steps To Ensure Your Scorecard Software Transition Won’t Be A Nightmare
Regardless of whether you’re excited or overwhelmed by considering a switch, we’ve worked with hundreds of organizations migrating from a scorecard software that didn’t suit their needs to one that did—and we have a few pointers on how to make that transition as smooth as possible. We suggest taking the following steps in the order they’re listed below.
- Analyze your current reporting process and software to identify pain points.
Odds are, you’re currently either using Excel or another reporting software, and you probably have a reporting process in place. Before the transition to a new system begins, we suggest mapping out your entire reporting process so you can identify the areas that need improvement and keeping those pain points in mind as you move forward. It’s critical to do this before you work with the onboarding team, because you need to be able to communicate with them effectively. If you don’t solve most of your pain points with new software, then why are you switching?
- Work with your onboarding team and software support team to map out your process.
Your onboarding team should consists of your internal software team, members of your strategy management office, and members of your new software support team. We suggest you share your reporting process with the new software onboarding team and stress your pain points from the exercise you just completed above. They can apply their expertise and provide some suggestions to set your switch up for success.
- Export the data from your old solution.
Next, you’ll want to learn how to quickly and efficiently get the data out of your old system. If your scorecard is currently in Excel, it will likely upload easily into your new software. But if you’re using another solution, take a closer look at the exporting options available. Exporting back into Excel or CSV will probably be your best bet, but check to see if your current solution offers data exportation through an API. You can use this to obtain a comprehensive report of all your information in that account. Exporting in any way is much better than cutting and pasting each individual KPI, and can save you immense amounts of time.
Execute On The Transition
- Upload your data into the new software.
Use the pointers and best practices laid out by the onboarding team, and add your data into your new solution. If you run into snags, make sure your new scorecard software support team can talk you through it.
- Build out your report templates.
If you get stuck in the report creation process, tag the software support team to show you how to create scorecards and reports that mirror those you’ve used (and liked) in the past. Additionally, they can help you create reports you may not have thought of yet and show you certain ways to format the data that might be helpful to you. We highly recommend utilizing your new scorecard software’s support database and knowledge library to get a jump-start on what is possible with the new software.
Training & Learning
- Train your trainers, then train your users.
Select members of your team will become experts in your new scorecard software tool, and now is the time to get them started. These individuals should get a handle on how the tool works and what it’s capable of. From there, these individuals can train your basic users in how it works and how it’ll fit into the reporting process they’re already accustomed to. You probably can get some training documents from your software support team and then customize them for your own use and training.
- Showcase your reports and processes to the leadership team.
After everyone’s trained, you’ll have your first monthly or quarterly report. Everything will, of course, go wonderfully because your setup and execution were flawless! You can then showcase the reports you’ve created to impress the leadership team.
- Celebrate success! But don’t stop progressing.
Be proud of what you’ve done—but don’t stop there. As any true reporting superhero knows, management reporting and scorecarding is a continual process, and you need to evolve and grow with it.
How To Manage Your Balanced Scorecard Online
If you’re worried about the intricacies of managing your Balanced Scorecard online tool, don’t be! In fact, a good system will take a great deal of stress away—not add it.
1. To begin online scorecard management, ensure the skeleton of your Balanced Scorecard is fully built.
This step includes creating and organizing your goals, KPIs, projects, and your strategy map. ClearPoint allows you to quickly build scorecards and dashboards that update themselves.
2. Once the Balanced Scorecard skeleton is in place, add the meat.
Ask the following questions during this process:
- How much data do I need?
- Who's accountable for this data?
- What’s the formula, evaluation, or calculation for this data?
- Where does the data come from?
- What is the cause-and-effect linkage between this data?
The answers to these questions will help you create a more detailed scorecard, determine accountability for the elements of that scorecard, and get the historic information necessary for your reports. Your reporting software should offer various custom layouts and styling that adjust to your custom reporting process—not the other way around.
3. Next, create a repeatable process for reporting that leverages the capabilities of the software.
To do this, you may want to use the following:
- Measure lists: A report that highlights the responsibilities of the marketing team, for example.
- Theme reports: Reports that show multiple business units and how they each support a particular department or line of business.
- Exception reports: These reports note any measures that are either exceptional or inferior, and thus deserve a closer look.
- Briefing books: Automatically-built, customized PDF reports are a great tool for briefing the leadership team.
ClearPoint makes report presentation simple with automated online Balanced Scorecard report capabilities, responsive design, and Excel and PowerPoint exports.
4. Manage the software.
You’ve put everything in the software and configured it to suit your needs, so now it’s time to consider the following steps:
- Define your reporting calendar. Note when things are due, who is responsible for each piece of data, and who updates the information.
- Update your measures and projects. You should be sure you’re selecting the right strategic measures and are consistently improving your project management process.
- Have your KPI and project owners update their information and add some analysis or evaluation. Note that goal owners won’t be able to assess progress with a high degree of confidence until they can compare how they’re doing with all projects and KPIs, so you may want to break goal update and analysis into two separate steps.
- With all pertinent information added to the software, consider the general story for the quarter—and then create the agenda and pre-briefs. You can’t focus on every issue and topic in your scorecard during your quarterly strategy review meeting, so hone in on the big issues that quarter. Are they in operations? Marketing? HR? Once you’ve determined that, start preparing for that particular issue or set of issues to be the center of your “reporting story” for that quarter.
- Once this story has been created, ensure you have the additional analysis needed. Make sure you go to the key measure or project owners for the quarter and let them know their data will be the center of attention, and to prepare for it. Ask them for additional analysis as well.
- Send out report information in advance of the meeting. Send a clear agenda in both hard copy and PDF form.
- In your meeting with the leadership team, display the report online (via the software). Ask a second person to make adjustments while you review information—anyone other than the facilitator. It can be annoying for meeting attendees to watch the presenter try to keep up with notes as well. Have a second person capture the edits or action items while you refresh your screen to show those results.
- Email action items to those who are accountable, and send all attendees the meeting minutes.
5. Consider the following best practices for ongoing Balanced Scorecard online management.
- Lock the reporting period after your quarterly meeting and move on to prepare for your next report.
- Archive your work when needed (either annually or when your strategy changes) and make scorecard adjustments so your strategy is always fresh.
- Document the process so someone else can smoothly take over management when you’re promoted! (This is a good idea—even if you plan to be in this role a long time.)
- Source your data automatically once you’re comfortable that the leadership team likes the way you’re presenting it. This will make the scorecard update process far easier for you—you can even send out automated email reminders to make it happen effortlessly. Learn more about how ClearPoint makes this process simple.
You’re probably concerned about how much time and money it will take to move your scorecard into reporting software to manage it online. If this sounds familiar, you’re not alone.
The reality is this: using a Balanced Scorecard online tool can save you time and effort during the reporting process. This is not one more random piece of software that won’t ever get used. This is a tool that you’re implementing to help yourself and your company manage its scorecard better, faster, and easier. You will be spending a fair amount of time in the software, but the reality is that you will be spending a lot less time organizing your scorecard as a whole. Thus, you will have much more free time to focus on the strategy itself.
Schedule time to talk to our team to learn more about the time that our Balanced Scorecard software can save you and your organization.