Scorecards also allow companies to manage and evaluate strategy. It accomplishes this by linking strategic themes and objectives to measures of operational excellence. In order to understand the role of the scorecard in Business Intelligence it is first necessary to discuss quantitative methodology. What is a scorecard? [ edit] Cobbold and Lawrie identify key components of a 3rd Generation Balanced Scorecard (2002), quoted verbatim: [ PDF] Destination Statement: In order to make rational decisions about organizational activity and not least set targets for those activities, an enterprise should develop a clear idea about what the organization is trying to achieve (Senge 1990, Kotter 1995). A destination statement describes, ideally in some detail, what the organization is likely to look like at an agreed future date (Olve et al. 1999 and Shulver et al. 2000). In many cases this exercise builds on existing plans and documents - but is rarely in practice to find a pre-existing document that offers the necessary clarity and certainty to fully serve this purpose within an organization.
Purpose: To create the frame scorecard based on the strategy map Input: Strategy Diagram, Strategy Map the most important Activities: Create and disseminate scorecard Outputs: Slice of strategy map for theme or decision maker (Scorecard) Documents: Scorecard Introduction [ edit] Scorecard: Aligning Strategy with Operational Activities "The Balanced Scorecard is a performance management tool. It began as a concept for measuring whether the smaller-scale operational activities of a company are aligned with its larger-scale objectives in terms of vision and strategy. Organizations were encouraged to measure, in addition to financial outputs, those factors which influenced the financial outputs. The underlying rationale is that organizations cannot directly influence financial outcomes, as these are 'lag 'measures, and that the use of financial measures alone to inform the strategic control of the firm is unwise. Organizations should instead also measure those areas where direct management intervention is possible.