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The customer perspective within the Balanced Scorecard

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❶This depends entirely on the type of organization. Many companies, however, have tried ABC at some time during the past twenty years and abandoned it because it did not capture the complexity of their operations, took too long to implement, and was too expensive to build and maintain.

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Feel free to share your opinion and thoughts in the comments. Aleksey Savkin LinkedIn , bscdesigner is helping companies to better formulate their strategies and make the process of strategy execution more tangible with KPIs.

His areas of expertise are Balanced Scorecard, Key Performance Indicators, business performance management. Aleksey is a frequent speaker at conferences; the author of a number of articles and books on Balanced Scorecard.

New book by Aleksey: Whether you are looking for a professional Balanced Scorecard software , or just researching information about Balanced Scorecard and business strategies, we recommend you to download and try our BSC Designer software no credit card is required. We will follow up with you with lessons about the Balanced Scorecard and will keep you informed about the trending articles on bscdesigner. There are normally no problems with defining objectives for the financial perspective of the Balanced Scorecard for profit-oriented organizations.

What are the strengths of this framework and where do we need to yet improve it? I have already alluded The Customers Perspective of the Balanced Scorecard. And it is not customer KPIs that cause strategists the most problems… One needs to clearly understand: Who is the customer? To achieve my vision, how must I look to my customer? On the Customer perspective of the Balanced Scorecard you need to reflect expectations of: Partners dealer, distributor , and Customers For example, in health care industry you put here not only expectations of patients, but of physicians as well.

Strategy formulation and description might be a time-consuming project even for an experienced strategist. This Strategy Scorecard Wizard will make the whole process fast and intuitive. For now, all of the discussed ideas might sound like very complex ones. Check out the training schedule and details. Use Customer Perspective discussed in this article as a starting template for your own scorecard!

These are for business processes such as procurement, production, and order fulfillment. These four realms are not simply a collection of independent perspectives. Rather, there is a logical connection between them - learning and growth lead to better business processes, which in turn lead to increased value to the customer, which finally leads to improved financial performance.

Each perspective of the Balanced Scorecard includes objectives, measures of those objectives, target values of those measures, and initiatives, defined as follows:. Measures - the observable parameters that will be used to measure progress toward reaching the objective. For example, the objective of profitable growth might be measured by growth in net margin. The Balanced Scorecard originally was conceived as an improved performance measurement system.

However, it soon became evident that it could be used as a management system to implement strategy at all levels of the organization by facilitating the following functions:.

Clarifying strategy - the translation of strategic objectives into quantifiable measures clarifies the management team's understanding of the strategy and helps to develop a coherent consensus. Communicating strategic objectives - the Balanced Scorecard can serve to translate high level objectives into operational objectives and communicate the strategy effectively throughout the organization.

Planning, setting targets, and aligning strategic initiatives - ambitious but achievable targets are set for each perspective and initiatives are developed to align efforts to reach the targets.

Strategic feedback and learning - executives receive feedback on whether the strategy implementation is proceeding according to plan and on whether the strategy itself is successful "double-loop learning". These functions have made the Balanced Scorecard an effective management system for the implementation of strategy. The Balanced Scorecard has been applied successfully to private sector companies, non-profit organizations, and government agencies.

Kaplan and David P. Translating Strategy into Action.

Other perspectives of the Balanced Scorecard

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According to what we see daily, 'Customer' is one of the most problematic perspectives of the Balanced Scorecard framework. And it is not customer KPIs that cause strategists the most problems One needs to clearly understand: Who is the 'customer'.

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The balanced scorecard demands that managers translate their general mission statement on customer service into specific measures that reflect the factors that really matter to customers. Customers’ concerns tend to fall into four categories: time, quality, performance and service, and cost.

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In the past, the customer perspective was not the focal point of the Balanced Scorecard, as companies believed product performance and technology innovation to be the backbones of business success. Nowadays, both of these take a backseat to customer satisfaction. The Balanced Scorecard introduced customer metrics into performance management systems. Scorecards feature all manner of wonderful objectives relating to the customer value proposition and customer outcome metrics—for example, market share, .

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Customer Service Balanced Scorecard Use this example of a Customer Service Balanced Scorecard as a starting point to build your own strategy map and KPIs, align the operations of customer service with overall strategy, and measure the performance with KPIs. & Associates Balanced Scorecard for Customer Support recognizes the strains placed on the organization by including apparently contradictory outcomes – such as reduced cost and increased customer loyalty – in the same model.