Community Balanced Scorecard

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As known, BSC is widely used in commercial organizations. However, these days non profit, public and government organizations find BSC a useful performance optimization tool. In this article we will talk about community scorecards and their features. Check additional information about community balanced scorecard.

Traditionally Balanced Scorecard is used in commercial organizations. It is not a secret that the aim of every business is to make profits. Balanced Scorecard is a tool that helps put strategy into action and to measure own efforts on the way to reach adopted strategic goals. Creators of Balanced Scorecard, Norton and Kaplan, were the first to introduce nonfinancial indicators to the set of KPIs. This turned out to be a revolution in the world of strategic management. Nonfinancial indicators can tell much about what the company should expect to happen in future. Besides, Balanced Scorecard is a tool that helps in strategic planning, i.e. it visualizes strategy and helps put it into action.

In course of time chairmen of non profit organizations came to understand the real power of Balanced Scorecard. Although nonprofit organizations have no goals of making money they still pay much attention to finances. Noncommercial and public organizations do not earn money but use money donated by sponsors or taxpayers' money. Thus, government and community organizations have to make sure this money is used in the most effective and efficient way. In this context Balanced Scorecard is a universal tool that helps such organizations optimize performance. Let's view a couple of examples of how Balanced Scorecard can be used in community, nonprofit and public organizations.

Local governments take care of all problems that occur in cities and towns. These are such issues as public transportation, fixing of roads, streetlight problems, community services such as electricity or gas supply etc. For example, if a local government starts using Balanced Scorecard it can calculate expenses related to maintenance of 1 m of road, or one street light. This figure will help them understand how to decrease such costs, or offer a better service for the given money. Taxpayers want to make sure that the government efficiently spends their money. Balanced Scorecard can cover all critical success factors for government and nonprofit organizations.

For instance, a local government can measure number of emails answered during a certain period of time or number of city dwellers who are satisfied with the way their particular problem has been solved. Balanced Scorecard does not solve problems. It only helps understand the ways they can be solved. For example, if one employee from public relations department can not handle that many calls and answering emails, then probably he/she needs help or assistant.

Community Balanced Scorecard will not only help save costs but also improve performance. By setting the right strategic goals and efficient use of Balanced Scorecard, local governments and nonprofit organizations can achieve tremendous results. Schools, hospitals, libraries, police& firefighting services are among organizations that can certainly start using Balanced Scorecard. It should be noted that BSC helps people better understand their roles and their contributions to implementation of strategic goals. It also improves organization climate and teamwork which is very important in nonprofit organizations that often lack money.

Although traditional Balanced Scorecard system should be somewhat modified to be used in nonprofit sector, experience of such countries as Sweden and the U.S. proves that noncommercial Balanced Scorecard is as effective as its commercial counterpart.

If you are interested in community balanced scorecard, check this link to find out more about community balanced scorecard. Also, you can check other articles in Creating Best KPI category.

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