Phases and Perspectives of a Balanced Scorecard in Technology Company

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Balanced scorecard in a technology company is one of the most important tools in business focusing in IT oriented organizations. It has five phases of development and four main perspectives. Check additional information about balanced scorecard in technology company.

Usage of a balanced scorecard in a technology company rooted from Kaplan and Norton's balanced scorecard (BSC) that was developed during the 1990's. Due to the overwhelming growth of Information Technology companies, BSC was later enhanced in order to be applicable for various IT company functions.

Like in an ordinary scorecard, there are four perspectives in an IT BSC:

-User Orientation

-Operational Excellence

-Future Orientation

-Business Contribution

The User orientation perspective of a balanced scorecard in a technology company covers everything about the user evaluation of the IT, while the operational excellence focuses on the processes, strategies and applications that are implemented and employed in order to reach the main organizational goal. On the other hand, future orientation perspective tackles the resources needed such as human and technological resources for higher IT efficiency rate. The last, but not the least is the business contribution perspective in which the value and profits of the IT investments are being covered.

Since the balanced scorecard in a technology company serves as one of the most proven basis for the company's progress both internal and external, it is safe to say that developing an accurate and efficient one is vital. There are five levels into successfully building an IT BSC and the following levels will show how a balanced scorecard in a technology company is essential for business stabilization and expansion.

Level 1 : The Initial Phase

-In this phase, it shows that the IT department or organization is already aware that it still needs quite a handful of changes to implement. Usually, it has something to do with having more operations and systems development to do.

Level 2: The Repeatable Phase

-Now, the management is gradually learning how to utilize the balanced scorecard in a technology company. Little by little, they are starting to understand the data presented by the reports and the linkages between performance drivers and outcome measures, although they are still having a hard time defining strategic and operational processes.

Level 3: The Defined Phase

-Standardization, documentation and communication are all finally settled in this level, but not fully integrated. This is the time when all scorecard processes has been structured and linked into the business cycle process. Compliance has been declared but still inconsistent.

Level 4: The Managed Phase

-All processes, data analysis and operational strategies of the organization is fully integrated into the scorecard. Now, the balanced scorecard in a technology company is perfectly working, complete with a solid understanding of the performance drivers and outcome measures linkages. The results are being systematically reviewed and compliance percentage is high.

Level 5: The Optimized Phase

-The scorecard is often reviewed, updated and improved based on data analysis. The optimal usage of the balanced scorecard in a technology company is now highly efficient and is consistently acted upon by the management.

The growth of the scorecard depends upon the organization's maturity; hence, it becomes an external and internal mirror of an IT balanced scorecard. Being able to understand and fully integrate applications, structures and systematic processes in a balanced scorecard in technology company can be of great help when trying to analyze complex data, facts and figures without the trouble of going through everything one by one which helps organizations to achieve a more effective sense of company transparency.

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

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.