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Balanced Scorecard-A management tool for prudent decisions

The traditional tools of Financial reporting are complemented by a new category of dashboards which is "balanced scoreboards". They collect the information as soon as possible and corresponding the same to the concerns of business managers.

Refer to useful basics on current developments:

Their development was made possible by advancement of management information systems that produces and develops data almost in real time. The indicators are quantitative and qualitative and are not confined to traditional accounting data . Their interpretation should, whenever possible, be devoid for ambiguities free calculation, if possible bias is found. Indicators should be reliable over time and built from readily available data set. Ideally, indicators should be relevant, verifiable, objective and simple. The indicators actually available do not always overlap those that would be desirable to obtain, even encompassing only partially the realities they are supposed to account.

The new generation of dashboards, the "balanced scoreboards, "was developed by Kaplan and Norton
in 1992. It has four orientations:

1. financial results;
2. Customer satisfaction indicators;
3. opportunities for improvement of internal processes;
4. learning opportunities and increasing individual and collective skills.

They are built from the definition of the missions and business performance, identifying variables or levers and the development of indicators reflecting objectives and action variables.

The categories are linked by a causal chain, financial category is considered the ultimate goal. The indicators may also cover areas other than those strictly concerned with the business of the company, such as social or environmental data .

The attractiveness on these "balanced scorecards" lies is that they combine traditional financial approaches and more operational approaches. however, Dashboards are synthetic and re-actively exhibits essential information of the Company's control or responsibility centers. They structure the mass of available data and select the relevant information effectively.
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