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There is a myth that Balanced Scorecard can be only made with the help of sophisticated software solutions. Well, this is true for large companies. However, small and mid sized businesses can create own scorecards and KPIs in MS Excel which is the kind of software everyone seems to use. Check additional information about create kpi in excel.

Is it possible to create the Balanced Scorecard without buying expensive software? The answer is definitely yes! Sure, big businesses have to invest money into development of Balanced Scorecard. When BSC is used in various departments and business units of a company that have their own goals, various scorecards should be coordinated in order to comply with general strategy of a company. However, it is possible to build scorecard and develop a series of effective key performance indicators using a popular application that everyone seems to know - MS Excel. In this article we will talk about how to create Balanced Scorecard in Excel.

First off, it is necessary to create categories. To begin with you can use traditional four categories of Balanced Scorecard: financial, customer, internal processes, learning and growth. For special instances company may use more than four categories. However, in this article will talk about the four categories of Balanced Scorecard. As known, each category consists of several key performance indicators. Their number should not exceed four or five, otherwise your balance scorecard will be overloaded with information and it will be difficult to find out what causes problems. Where to find key performance indicators? Well, there are lots of web sites online offering sets of key performance indicators for free. It is possible to use such indicators, however you should keep in mind that there is no universal set of KPIs that will work for your business. Every key performance indicator is individually selected. Something that works for the company that looks similar to yours may not work with you.

Having chosen key performance indicators it is time to make some adjustments. First of all you have to decide on measuring units (percents, dollars, scores etc), baseline (i.e. starting value of an indicator), maximum value and target value. Sure, it will be quite difficult to write all formulas, thus it makes sense to buy ready to use Excel spreadsheets with BSC projects. All you have to do is just to use your own indicators and set own values, baselines, targets etc. Excel is quite a powerful tool that is often underestimated. In fact, such Excel scorecard is a fully functional scorecard that servers its purposes. Sure, specialized software has a number of additional features that are quite helpful when working with BSC in a large company.

Performance for each indicator is calculated and then Excel calculates performance for a category, based on weights of the KPIs. Weight means importance of an indicator (for example number of contacts with customers is more important than failed calls to customers). Based on performance of the 4 BSC categories total performance is measured.

In such a way, you can create own scorecard in Excel either for free (but you have to write all the formulas by yourself) or with minor investments (you can buy Excel scorecard with formulas inside it). This is an excellent opportunity to test the power of BSC without spending huge money. BSC is a powerful and effective tool. Do not hesitate to try it.

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Balanced Scorecard Toolkit includes step-by-step manuals, documents, presentations, check lists designed to help business professionals with successful development and implementation of Balanced Scorecard. Learn more about BSC Toolkit.