Aiming resources at success

By Tim Fielden, InfoWorld |  Software

Although not easy to adopt, a well-implemented BSC program can enormously benefit your company's bottom line. It can execute and align complex programs of change and can reveal the drivers necessary to maintain long-term competitive performance.

A BSC also will save you the substantial cost of redeveloping entire strategies from scratch because of a few faulty objectives. Although the BSC requires a periodic redefinition of goals to account for shifting market and operational factors, it will divide your master strategy into manageable business targets and will ferret out deficient objectives that must be reassessed.

Because a BSC is integrated in every level of an organization, it channnels all your efforts in the same direction. Although all companies have, or should have, a coherent business strategy, many departments and employees may actually be operating contrary to it. For instance, members of your application development group may be taking Java classes even though you are planning to outsource your Java development needs.

The sum of such inefficiencies can cost your company substantially. A BSC will integrate your goals with the daily functions of each employee and department, allowing you to maximize your resources and minimize useless or wasteful activities.

Robert Gold, a principal IT practice leader at the Balanced Scorecard Collaborative, explains that one of the most important steps in building a balanced scorecard is "gaining the commitment of senior IT management through formal training or workshops."

Indeed, a common cause for a failed or delayed scorecard is a lack of buy-in from senior management. Executive leadership is essential to a well-integrated strategic effort because objectives must originate at the top and cascade through the organization.

Once acceptance is complete, the next step is to develop a strategy and translate it into operational objectives with specific targets. With these metrics in place, your company can map and prioritize new and existing initiatives.

Although many IT departments operate according to independent key performance indicators and critical success factors, these objectives usually focus on internal IT targets alone. As Gold says, "These measures may be important in day-to-day operations, but they do little to connect IT to the stakeholder community." A BSC empowers IT workers to monitor enterprisewide strategies and pinpoint areas of substandard performance, which IT is often the first to notice.

Although it depends greatly on the size and complexity of an organization, a typical BSC implementation, handled by a small team of experts, will take somewhere between three and six months. Most companies will need the assistance of professional consultants during this process to help define targets and measurement systems.

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