The scorecard brings together in a single report the disparate elements of a companys competitive agenda and guards against sub-optimization. The balanced scorecard has four measures: customer perspective, internal business perspective, innovation and learning perspective, and financial perspective. The customer perspective forces the company to see themselves through the customers perspective. Goals for time, quality, performance, service, and cost of products are translated into specific measures.
The internal business perspective allows the company to identify and measure core competencies such as cycle time, quality, employee skills, and productivity. This perspective will identify operational issues that need to be addressed. The innovation and learning perspective allows the company to directly link company value to ability to innovate, improve, and learn. Improving operational efficiencies and penetrating new markets increase revenue and margins; therefore increasing shareholder value.
The financial perspective indicates if the companys strategy, implementation, and execution are contributing to bottom-line improvement. Goals of the financial perspective are to increase profitability, growth, and shareholder value. The main concerns with the balanced scorecard are: do short-term financial goals really indicate operational success; and is the information system used timely enough? Despite these concerns, the balance scorecard does an excellent job keeping companys looking and moving forward in todays business world.