Balanced Scorecard software selection: making the right investment
When choosing the right Balanced Scorecard software for an organization, there are a few issues to be considered. Software set-up, design, configuration and technicality are some of the dimensions to be analyzed during the Balanced Scorecard software selection process.
Information security and execution costs are also elements of concern when it comes to an optimal Balanced Scorecard implementation.
Set-up and design considerations
1) Time and resources: When selecting the adequate Balanced Scorecard software for your organization, the time and resources required for a full implementation should be thoroughly examined.
2) Flexibility: There are various Balanced Scorecard designs that we can choose from. However, the flexibility of the design, adapted to pre-existing scorecard models practiced in the organizations, should be one of the criteria organizations base their selection on.
Using an already established infrastructure can lead to an economical optimization of systems and processes.
3) User interface: In the competition for making their portals user-attractive, Balanced Scorecard software providers may drift away from the simplicity of a realistic design. The adequate software must present information and data in manageable fractions, so as to facilitate learning.
4) Number of performance indicators: New Balanced Scorecard software technologies, allow for an unlimited number of KPIs to be entered, measured and tracked. This is not a bad feature at all.
Selecting a software that enables monitoring of large volumes of KPIs is an indicator of that software’s flexibility to house reporting from across all levels of an organization. However, practitioners must not get distracted from maintaining focus on the most relevant KPIs for the organization itself.
5) Functionality: Balanced Scorecard software vary in the manner they assemble constituent elements of a performance management system. Some software may focus on presentation tools such as Scorecards and Dashboards, while others may find it more important to link Key Performance Indicators to strategy maps.
Finding a software that best connects objectives to perspectives, KPIs to objectives and targets, and initiatives to targets should become a priority. Quickscore, for example, connects the Balanced Scorecard to Strategy Maps, Dashboards Individual Reports, an Action Planner and a Document Manager, within a comprehensive performance information system.
6) Owner allocation: The optimal Balanced Scorecard software will allow the user to assign owners to the KPIs they are responsible for.
7) Access to detailed information: A software that provides room for the description and definition of various KPIs is one option to be examined. The first thing a KPI owner will do, when analyzing data for its communication, is its definition and description.
8) Unit type availability: Key Performance Indicators are usually measured by different unit types such as: “#” for number, “%” for percentage, “$” for monetary value regardless of currency. The Balanced Scorecard software must provide use of these different unit types for KPI measurement.
9) Corresponding weights: Key Performance Indicators are tuned according to the needs of the organization. That’s why they are all important to the Balanced Scorecard.
However, it is not unusual for organizations to place, or shift, emphasis from one group of indicators to another, when adapting to changes in their business environment. An ideal Balanced Scorecard software will provide means of weighing key performance indicators relative to their importance.
10) Benchmarking and comparison: When evaluating performance, the most comprehensive way to do it, is not by measuring key performance indicators only relative to targets, but also by comparing with previous results, and benchmarking to results of the same indicators in other organizations active in the same industry or functional area.
A Balanced Scorecard software that allows KPI comparison and benchmarking to be achieved is one to be considered for implementation.
11) Threshold achievement indicators: Even though we are more than familiar with the traffic light representation of target threshold achievements, the decision of acquiring a Balanced Scorecard software should be based on its ability to provide easy-to-understand threshold status indicators.
12) Automatic link to e-mail: In order for them to be improved, Balanced Scorecard results must be communicated. A suitable Balanced Scorecard software automatically connects to e-mail, communicating results and encouraging staff to participate to their improvement.
- Software compatibility to operating systems: The Balanced Scorecard software should be compatible with the existing technical environment, so that additional implementation costs will be avoided.
- Operational integration: The optimal Balanced Scorecard software allows for data to be collected from a multitude of additional sources such as the financial statements, customer relationship management system, or the ERP system. Automatically outsourcing data without duplicating it, is one of the main functionalities organizations should search for when selecting a Balanced Scorecard software.
- Data import and export: The ideal Balanced Scorecard software should have the potential to retrieve data from various third-party sources, such as spreadsheets or excel templates, as well as facilitate the export of data to management boards, shareholders and stakeholders.
- Uploading and sharing: When selecting the right Balanced Scorecard software organizations should consider the importance of mean time accessibility and instant data sharing. This aids the organization to provide all its employees with access to the information presented in the Balanced Scorecard.
Making sure that data is safe and protected, is a crucial concern with all the companies activating in the extremely competitive business environment of today. This is the main reason most of today’s organizations prefer processing their data on their local servers.
However, this makes it difficult for information to be shared across the organization at low costs. Nonetheless, there are Balanced Scorecard software that provide availability of both internal and online storage with great licensing costs.
The implementation cost of a Balanced Scorecard software must be the best reflection of the product’s ability to deliver what the organization needs. When this happens, the Balanced Scorecard software becomes more than an expenditure. It becomes an investment.