January 24, 2000
When US West Inc. in Denver recently undertook an e-commerce initiative, the company put the Balanced Scorecard model to work, says Rod Mack, the company's general manager of software development. Based on the theory that for every action there's an equal and opposite reaction, the model helps companies determine what impact a potential change will have on the rest of the organization, looking at it from four perspectives: finance, customers, internal processes, and innovation and learning for employees.
"For our e-commerce initiative to be successful, it wasn't just the e-commerce platform," says Mack. Starting with that customer-facing goal, the Balanced Scorecard approach defined goals in other areas: internal processes, employee impact and finances, he says.
For US West's 4,500-person information technology department, that meant getting the associated computer systems Y2K-compliant in the internal processes category, implementing an IT career structure in the employee learning category and meeting overall budget commitments in the financial category.
Business Beyond Finances
Some organizations like US West are beginning to accept Balanced Scorecard analysis for assessing roll outs of new technology. Instead of focusing solely on a company's financial goal, the model requires decision-makers to consider the impact of strategic decisions on staff, customers and the organization's function.
"In the past, a lot of these might have been the same goals, but it's easier to organize your thoughts around this. We even used Balanced Scorecard as the framework for all our 2000 planning," Mack says. The regional Bell operating company has been using Balanced Scorecard for the past year and a half to gauge successful project implementations, he says.
The Balanced Scorecard concept was created by Robert Kaplan and David Norton, who coined the term in a 1992 Harvard Business Review article (see "Balanced Scorecard's Origins"). Many Fortune 500 companies use it to assess the full impact of their corporate strategies, ferreting out any unintended consequences to their workforces, their customers or their bottom lines that could occur when they alter a production process, for example.
"When companies look at setting strategies and goals, they classically fall into setting financial objectives: increasing revenue or return on assets. But Balanced Scorecard says that's looking in the rearview mirror," says Ken Rau, director of the information risk management practice at KPMG Peat Marwick LLP. He uses the methodology to advise companies on how to avoid negative consequences when implementing strategies.
Continued...
1 |
2 |
NEXT

If you're like our 7,000 survey respondents, your paycheck this year has been flattened and your bonus obliterated. We offer 12 ways to plump up your paycheck.
Microsoft's next OS might more accurately be called Windows 6.5: It's essentially a better version of Vista.
Twitter can be a valuable business tool -- if you know what you're doing. Here's how to juice it for all it's worth.
By helping Intel with loosened 'Vista Capable' requirements, Microsoft 'severely damaged' its credibility, said an HP exec in a newly unsealed Feb. 2006 e-mail.
Get the latest news, reviews and more about Microsoft's newest desktop operating system
Find wage data for 50 IT job titles.
|
 |
| The Impact of Social Networks on Mobility Strategies The Impact of Social Networks on Mobility Strategies Download this webcast, free, compliments of RIM. Go to the webcast |
|
| Five Technologies Simplifying Infrastructure Management Get this white paper now! (Source: Liebert) Today's data centers must support more devices, are consuming more power and generating more heat. Learn five infrastructure technologies that are making it easier for growing businesses to introduce new IT systems as needed while maintaining high levels of availability. Download this white paper |
|
| Computerworld Technology Briefing: Meetings @ the Speed of Business Download this Technology Briefing now, compliments of Microsoft! (Source: Microsoft) For large organizations, Web conferencing gives a major boost to collaboration among far-flung offices. For smaller companies, experts say Web conferencing is no longer a luxury but a necessity for everything from webinars to customer presentations. But the real value lies in saving soft costs and in increases in productivity. Download this executive briefing |
|
| White Papers Read up on the latest ideas and technologies from companies that sell hardware, software and services. | View more whitepapers |
|
|