Balanced Scorecard Despite Organizations Having

Balanced Scorecard Despite organizations having Six Sigma, Activity-Based Management or Enterprise Performance Management (EPM) in place to actively monitor, analyze and evaluate their performance, there is still the need to have a Balanced Scorecard (BSC) methodology and reporting system in place. Balanced Scorecards provide essential insights into the direction of key performance indicators (KPIs) relative to strategies and plans over time (Hubbard, 2009).

Balanced Scorecards Critical Even when organizations have intensive levels of quality management programs at a strategic level, including the use of Six Sigma to ensure alignment of their many systems, processes and people to customer-centered needs, there is still the need to monitor performance over time. The Balanced Scorecard acts to measure and continually provide insights into how the strategies are contributing to the attainment of objectives, in addition to defining which areas are performing the best or worst over time (De Geuser, Mooraj, Oyon, 2009).

Far from being an either/or decision with regard to broader strategic initiatives, the use of balanced Scorecards acts more like a compass to ensure an organization is continually making progress in the right direction over time. The composition of a balanced Scorecard in terms of KPIs is often balanced between marketing, selling, operations, and service with senior management focusing on inventory turns and key operational measures that impact financial performance (Hubbard, 2009).

KPis are also benchmarked and measured over time to see if any additional insights can be learned from their trending. As can be seen from these many uses of Balanced Scorecards, they have a highly complimentary role to play in the development of a complete enterprise performance management system. Using Balanced Scorecards in Nonprofit Organizations Arguably the use of balanced scorecards in non-profit organizations is even more critical, as the funds used are often more tightly managed and more audited than funds in for-profit organizations.

There is also the need to make sure the funds are actually leading to the socially-driven and philanthropic goals being achieved as well. Where for-profit organizations commonly use balanced Scorecards for measuring their effectiveness relative to financial and operational goals, not-for-profit organizations need them even more to measure and report back on the progress to attaining greater social good (Weinstein, Bukovinsky, 2009).

Arguably the increased pressure on not-for-profits to show not just a return on their investment in terms of social welfare but also show the funds were spent judiciously and without waste accentuates, intensifies the need for tighter reporting. As a result, there is the need to ensure a very high level of transparency and accountability in now the funds and resources of a not-for-profit are used. For all of these factors and the need for auditability of not-for-profit organizations' financial statements and ongoing activities, balanced scorecards are indispensible.

The KPIs used by not-for-profits will also change over time as their goals change,.