Advantages of KPI Scorecarding

Business Intelligence May 25, 2011 No Comments

A KPI scorecard is a solution that allows organizations to manage their organizational performance by linking operations with strategy. The scorecard monitors the execution of strategic objectives at each level of the organization and ensures a consistent understanding at all levels of the organization’s priorities and expectations.

Sample KPI Scorecard

Sample KPI Scorecard

Scorecards can be utilized at all levels of an organization including executives, managers and staff. They are usually updated in periodic snapshots, use graphical symbols and icons to present summaries of organizational performance, and chart overall progress over time for the organization.

Scorecards provide value to the organization by linking key performance indicators (KPIs) within tactical and operational levels in an organization to the overall strategy of the organization. In addition, the scorecard establishes accountability to appropriate individuals and enables visibility to up and down an organization from executive management to operational levels. The scorecard can be a powerful tool to allow for assignment of goals and objectives to all individuals and focuses accountability on the relevant individuals and business units.

Typically scorecards provide internal and industry benchmarks, goals, and targets that assist an individual’s understanding of their own unique contribution to the organization. Often, the scorecard spans strategic, tactical, and operational aspects and decisions of the organization and supports the specific demands of varying levels of management.

Benefits and Advantages of KPI Scorecards to an organization include…
• Scorecards drive improved organizational performance
• Scorecards translate strategy into concrete terms and help track its execution
• Scorecards help ensure that the right measures are utilized
• Scorecards encourage the right balance of operational and strategic factors
• Scorecards encourage good management
• Scorecards present a compelling picture of performance that is not distorted an individual issue



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