# Supply Chain Management Maturity and Business Performance: The Balanced Scorecard Perspective
## 3 Supply Chain Management Maturity and Balanced Scorecard Perspective: Hypothesis Development  
Relationship between Supply Chain Maturity and Business Performance from the Financial Perspective of the Balanced Scorecard Framework  
One of the basic premises in the existing SCMM models is that increased maturity will lead to improved financial results through improvements in supply chain performance [1; 11; 12; 23; 24]. Better financial results, in terms of profitability, cost reduction, and shareholders' value, should result from supply chain processes carried out with more mature performance [25]. The ability to handle internal and external issues as the supply chain becomes more mature [26], lower internal costs, and higher customer satisfaction and value externally resulting from effective supply chain management can contribute to organizational profitability [27]. Financial performance affects the strength of supplier relationships, integration among strategic partners and their infrastructure, mutual trust, cooperation, and cross-functional work [28]. Moreover, results indicate that upstream collaboration towards suppliers and downstream towards customers can help reduce costs [29]. Expenditures related to the supply chain consume up to 75% of a business's revenue [23]. Thus, the management of a firm's supply chain directly affects its financial performance. Influence can also be indirect through operational excellence, leading to customer satisfaction, long-term loyalty, and financial gains [30]. Product quality and delivery are the outcomes of a supply chain that exhibits operational excellence, and these outcomes are significantly and positively associated with customer satisfaction [31]. In this sense, efficiency and leaner processes can lead to cost reduction and profitability [25]. Previous empirical research has indicated that SCM practices and supply management performance positively affect financial performance (e.g., [10; 27; 32; 33; 34; 35]). An effective and efficient supply chain based on sophisticated supply chain plans can bring benefits in terms of better inventory turnover, costs of goods sold, and return on assets [36]. For instance, [23] show how SCM competency leads to higher shareholder value, while there is a higher supply chain fit associated with better financial results measured by return on assets [37]. Ref. [38] stress the importance of establishing an integrated ecological supply chain, which can result in better economic performance, including with respect to profit margins, sales, and market shares, as well as improve the competitiveness of an entire supply chain. Similar results were obtained by [27; 29; 39], whose research indicates that supply chain integration is positively correlated with financial results (measured as a firm's profit). Still, the results are not conclusive. For example, [40] did not manage to prove the direct impact of SCM practices on financial performance and only proved its influence through the mediating impact of enhanced competitive advantage. Ref. [41] investigated the impact of SCM integration (internal, process-related, and product-related) on financial performance. Their results reveal that internal integration and product integration have positive impacts on financial performance. However, the impact of process integration on financial performance is not supported by their research. Empirical research is scarce concerning SCMM and financial performance, but previous studies mostly suggest that such a relationship is significant [42]. Studies generally indicate that maturity is related to supply chain performance [1; 2; 43] or cost reduction [44]. A study by [45] indicated that extensive integration and collaboration in the supply chain contribute significantly to corporate financial performance. At the same time, [33] demonstrate that enhancing supply chain logistics performance results in positive growth dividends.