Live Balanced Scorecard: Ultimate Goal of BI

Red Bull Formula One driver Sebastian Vettel of Germany takes the checker flag during the Malaysian Formula One Grand Prix in Sepang, Malaysia, Sunday, April 10, 2011. (AP Photo/Eugene Hoshiko)

In a recent conference, Hasso Plattner from SAP introduced the concept of “Board room of the Future“. This vision primarily talks about technologies like in-memory computing, interactive visualization  and different BI content delivery methods that are possible today with advancement in hardware and software.

Corporate Boardrooms today are the place where long-term strategy is formulated and monitored. Workforce is mandated with executing the vision, which is set by top management and periodically evaluated by senior management. A concept of strategy formulation that has a widespread acceptance in many organizations is “Balanced Scorecard” that was first proposed by Kaplan and Norton. It was intended as a tool for managers to monitor the progress and make decisions accordingly.

A balanced scorecard is essentially a collection of KPI’s to be monitored for different facets of the defined strategy. For example, consider following scenarios for strategies

  • Increase plant operations efficiency from 80% to 85% in 3 years
  • Establish sales and operations in Asia Pacific region for $100million by 2017
  • Diversify risk by establishing new brand in widgets by 2018

Although the strategy is defined in a single sentence, when it boils down to execution, there will be multitude of initiatives and changes initiated within the organization in order to achieve this goal. BI systems today can track and report progress at an individual task level. Majority of BI systems are built today to deliver operational data to wide variety of users. Strategic reporting is still evolving and in today’s scenario, it typically mirrors operational reporting at an oganization level.

Identifying KPI’s that align with strategy is the first step in building a good Scorecard. Second part is delivery to all stakeholders within the organization. One important distinction here is that the delivery mechanism of a Balance Scorecard could be in any form i.e. Infographic, Dashboard or Simple Report for that matter. Third and finally, the frequency of data to be refreshed in the scorecard.

Ultimate goal of a live balanced scorecard should have real time data in a dashboard like format that can be analyzed and updated on the fly. Technology barriers are coming down every day to make this reality, but organization wide adoption and change holds the key to successful implementation.