For instance, the return on investment in personnel training can be traced to other indicators such as enhanced customer satisfaction, improved mainframe disk utilization, and lower unit costs. Designing BSC indicators and measures A basic challenge of implementing the BSC at an any level is defining appropriate performance indicators, metrics, and targets. The scorecard and external measures By definition, the BSC sets goals and targets from internally generated criteria. However, when external benchmarks and a comparative analysis methodology are applied to a balanced scorecard, the Compass perspective of continuous improvement to achieve 'best of breed' performance. Compass believes that detailed data on top performers and knowledge of best practices can be used effectively in the context of a balanced scorecard.
External measures help define realistic performance targets for each of the four perspectives.
The scorecard then facilitates an iterative process of continuous improvement. Conclusions Kaplan and Norton's Balanced Scorecard is a powerful and increasingly popular tool for managing organizational direction and strategy. The BSC methodology involves measuring performance from four perspectives and understanding linkages between the different indicators. The BSC methodology is relevant to IT management at both a strategic and tactical level. Activity-based costing measurements are essential to linking a BSC to actionable performance improvement initiatives.