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DMQ 30262

Figure 4.6 Spider charts for comparing vendor delivery performance

4.2 BALANCED SCORECARDS

The balanced scorecard is a management system that enables organizations to

clarify their vision and strategy and later translate them into action. It provides
feedback for both internal business processes and external outcomes in order to
continuously improve strategic performance and business results. When fully

deployed, the balanced scorecard transforms strategic planning from an academic
exercise into the nerve centre of an organization.

Every measure on a balanced scorecard attempts to address an aspect of a
company’s strategy. It attempts to create a blend of strategic measures. The
importance is then linking the strategy into some form of measurement. In the past,

very often performance measurement systems did not measure how the employees
had performed in relation to corporate strategy. The balanced scorecard attempts to

do that. It endorses the idea that employees should be observed on how they are
performing with respect to the company strategy.

Internal and external measures are also used under the balanced scorecard.
Companies must balance between external measures, like customer satisfaction,

and internal measures, like employee satisfaction. Companies must look at both

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