But the value of knowledge management efforts is difficult to pinpoint. Senior executives want to be able to measure the effects of knowledge management, but existing measurement systems have fallen short in achieving that goal. One method for measuring knowledge that is growing in popularity is that of the balanced scorecard. Alongside financial measures, the balanced scorecard adds other perspectives, those of customers, internal business processes, and innovation and learning. Other strategies for the measurement of knowledge management are presented.
Innovation can be a means of achieving competitive advantage within a company.
The formulation of strategic goals and the monitoring of their achievement is a complex exercise for any organisation. Disagreement over the most appropriate measures of effectiveness, and how they are to be weighted to provide an indicator of overall effectiveness, has lead to dissatisfaction with the traditional goal achievement model and the suggestions of alternatives, such as the balanced scorecard. The integration of quantitative and qualitative measures to provide an indication of relative organisational competitiveness, nationally and globally, remains a challenge for management accountants. In the information era, there is a growing consensus that financial indicators on their own, however conclusive they may seem in their air of numerical precision, are neither an adequate measure of competitiveness nor a guide to future performance. One solution is what has become known generically as the balanced scorecard.