By Hannah Knott
Why is a Balanced Scorecard Important?
A Balanced Scorecard is helpful to businesses of all sizes and can be utilized by for-profit businesses, nonprofit organizations, and governmental agencies. As a strategic planning tool, it provides a performance metric to identify and improve various internal business functions and the resulting external outcomes. The idea was first introduced in 1992 and was adapted to include financial and non-financial information. Thus, the balanced scorecard is isolated into four areas: Learning and Growth, Business Processes, Finance, and Customers. See below for an expansion of items to consider with each area:
- It pulls data from these four areas into a single report saving management time, money, and resources when they review procedures.
- It also allows businesses to track their performance with more than solely financial data.
- An ability to recognize and reduce inefficiencies.