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It's no longer just a dreamcompanywide performance indicators right on your desltop computer screen.
For all of their investments in multibillion-dollar technology information systems, most executives still run their companies with a management philosophy devised by Phoenician traders while the pyramids were still under construction. A system that looks backward instead of forward and disproportionately stresses quarterly financial performance at the expense of important indicators like workforce quality and customer satisfaction. A system that worked well in the cyclical Industrial Age but isn't suited to the fast, fluid Information Age.
The Balanced Scorecard is a management system that better reflects the modern business environment. Like an airplane's control panel, an automated Balanced Scorecard helps managers steer their business by providing a comprehensive picture of their performance. It builds that picture with financial and nonfinancial measurements such as customer loyalty, quality, revenue, and employee knowledge. An accurate view of these factors enables management to measure overall performance rather than focusing on short-term, bottom-line results.
The Balanced Scorecard provides a communication system that bridges the gap between goals set by high-level managers and the frontline workers whose performance is ultimately responsible for reaching them. It does this by linking performance results with the processes that drive them. By gathering and processing information from a company's existing computer systems, the Balanced Scorecard determines whether the company is meeting its goals and delivers a grade along with a qualitative assessment that everyone can view to see if the company is moving in the right direction.
BALANCED SCORECARD VS. EIS
With the increasing popularity of the Balanced Scorecard management approach, vendors are marketing a diverse spectrum of software solutions under the guise of an enterprise system for delivering a Balanced Scorecard to everyone's desktop. Unfortunately, the reality is that typically these are no more than an Executive Information System (EIS) application providing a graphical representation of some key high-level indicators.
Balanced Scorecards differ from traditional EIS solutions in that they are fluid and constantly changing based on how people meet their goals. EIS systems, on the other hand, contain much hard-coded information and require significant maintenance. They also typically focus on measuring lagging indicators (financials) while a Balanced Scorecard measures both leading and lagging indicators. In addition, EIS applications...