When it comes to a technology company, one of the ways to keep it moving forward is the balanced scorecard approach. This is designed to make sure that the company focuses on all of the issues that are important to it, so it can continue to excel and not become mired in problems or concerns that will bog it down. Considered here is what a technology company can and should do in order to make sure it continues to be successful and balanced as it grows and develops.
¶ … Balanced Scorecard approach in an organizational situation
The Application of the Balanced Scorecard Approach in an Organizational Situation
A balanced scorecard is used to help ensure that a company is on the correct path and moving forward in a way that benefits it and its customers, as well as anyone else who has an interest in it, such as stakeholders or shareholders (Rohm & Malinoski, 2010; Kaplan & Norton, 1992). While some scorecards are only focused on the end result when it comes to what the numbers say, other scorecards deal with the strategy behind the numbers (Norreklit, 2000). These are the scorecards that are much more significant when it comes to technology companies, because they offer information about the how and why instead of just providing final numbers that are not going to provide strategic information (Rohm & Malinoski, 2010). It is not just about what a company is doing right, but how they are doing it right (Norreklit, 2000). This paper will address the difference between traditional scorecards and the more strategic way of creating one that will provide more significant information for companies that are looking for the best strategy for their company.
Analysis
Not understanding the how of the issue is much more of a downfall for technology companies, because they then have no strategy from which they can build and work (Rohm & Malinoski, 2010). By focusing only on the numbers that are produced by the company, that company misses out on information that could help them find ways to change and enhance those numbers in the future (Norreklit, 2000). Companies that focus on the strategies instead of just the numbers will be much better at finding ways to enhance their bottom line and move forward with their plans (Rohm & Malinoski, 2010). This is the main difference between the two types of balanced scorecards available to technology companies, but not every company understands the value of one scorecard over another.
In general, companies are used to addressing the bottom line (Rohm & Malinoski, 2010). When they get the traditional scorecard, it gives them a snapshot of what the company has been doing (Norreklit, 2000). They can see the information about how the company has performed, and if they see that there are issues with a particular area, that is the area that they can focus on in the future to see improvement (Norreklit, 2000). There is a down side to that traditional type of scorecard, though, in that it only tells the company the area where there is a problem. It does not tell the company why there is a problem in that particular part of the company (Rohm & Malinoski, 2010). While some companies may not see why that matters, the issue is that a company cannot correct something when it does not understand why there is a problem in that area (Kaplan & Norton, 1992).
Just assuming that making changes will be enough to correct a problem because the numbers are too low (or too high) in one area does nothing for the actual value of the company, and fails to take important and significant issues into account (Rohm & Malinoski, 2010). The company must know what changes to make, when to make them, and how they will reflect on other departments in the company (Rohm & Malinoski, 2010). With technology companies this is particularly significant, because the industry in which they work can change so quickly. That includes the window of time in which a product is viable (Rohm & Malinoski, 2010). Companies that only see that a product is failing when they look at the scorecard will not have a strategy ready to work toward other products, and that strategy is something that should have already been addressed (Rohm & Malinoski, 2010).
Another serious concern for technology companies is that other technology can appear on the scene and cause difficulties for the company and its current technology (Rohm & Malinoski, 2010). Because of that, something can change so fast and a company that is prepared for that change will be better off and more able to move forward quickly (Rohm & Malinoski, 2010). Other companies, where changes are slower, might not have this concern. However, it is very important to be aware of the type of company and the industry one is in, so the proper strategy can be employed (Kaplan & Norton, 1992). Companies that are focused on technology have to consider the speed at which new technology can appear, along with the life of the technological products they have created (Rohm & Malinoski, 2010). When they do this, they will be much more prepared for anything that could happen.
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