Balanced Scorecard
Most business managers and owners are concerned with the future performance of their ventures, particularly with respect to non-financial aspects of the business. As such, managers in various business organizations and non-profit institutions have embraced the use of different management strategies that can enable them to measure the trends in the performance of their businesses. One of the management strategies that are widely applied by most industries and other business organizations is a balanced scorecard. Essentially, this card entails a management and business planning system that accommodates the non-financial aspects of the business. It takes into account aspects like customer satisfaction and corporate performance to show how the future performance of the business is likely to be. In addition, the balanced scorecard helps the management to align the activities of the business with its vision and strategies, enhance the communication within the organization, and monitor the performance of the organization in accordance with its strategic goals (Kaplan, 2008).
The first step in the creation of the balanced scorecard is the generation of the purpose statement. This statement will state how the PeaPod.com is going to be different from its competitors. The purpose statement covers the objective of the scorecard, its advantage, and the coverage of the system. For a grocery business, the purpose statement may be to improve external communication. The next step involves designing the agenda for what the business seeks to achieve by using the scorecard. If the purpose statement is inward looking, the agenda should be outward looking. For example, an appropriate agenda for PeaPod.com is to enhance the interpersonal relationship within the business. The other step involves making a road map by listing the objectives to be achieved and setting the employees towards achieving those goals. The business should also have the measures that will help it to achieve the set goals. These measures should also link the targets of the individuals with the overall vision of the business. Finally, the management must take some initiatives towards realizing its vision. For example, PeaPod.com should set the target to be achieved by every employee and the timeframe for achieving those targets.
How the business scorecard will help the management to identify the information requirements
One of the main reasons for developing the balanced scorecard is to measure the progress of the business in terms of both external and internal communication (Talbot, 2010). Therefore, the scorecard should have different ways of assisting the management to get the information required for improving its performance. The scorecard has customer component. Through the responses of various customers in regards to the activities of the business collected through various market surveys, the management will be able to obtain the information concerning the reaction of the market to its product. Additionally, the scorecard will enable the management to compare the competitiveness of the business using the market score for the business as indicated by the reactions of the consumers of its products.
The IS system that I would recommend the management to use to obtain the information for each scorecard component
A balanced scorecard usually has four major components, which include the customer, financial, growth and learning, and business process components. Each of these components serves the business with a particular purpose and helps the management to achieve a specific objective (Gueorguiev et al., 2005). The customer component of the balanced scorecard includes different areas like how the business responds to customer issues, product delivery, and customer satisfaction. Additionally, this component is concerned with the product quality and the costs involved in product delivery. Therefore, I would recommend the transaction processing type of information system to be used for this component of the scorecard. Transaction processing facilitates the collection, storage, and processing of any business transaction (Gueorguiev et al., 2005). Thus, it is the most suitable IS system for customer component.
The business process component is concerned with the internal processes that the business uses to ensure that the work is done as required. Primarily, this component includes areas like information technology and the efficiency of task performance. Therefore, the type of IS that I would recommend for this component is the management IS. This is because the management IS facilitates the collection of relevant data relating to managerial activity and helps the management to make appropriate decisions. The financial component is concerned with the financial performance of the business. It considers different elements such as business expenses and benefits. The financial information collected enables the management to determine the appropriate methods of reducing the costs to increase the profitability of the business. Some part of the business revenues may be devoted to market research to help the managers in adopting the most economical alternative for running the business. Since this component involves a lot of financial analysis, the expert system type of IS will be the most appropriate.
The other component of the scorecard is the learning and growth component. The scorecard indicates what the business has learned and the critical areas of improvement for the period of its operation. It involves reviewing the satisfaction of the employees and how their morale has improved (Talbot, 2010). The management has to make a decision after reviewing the satisfaction of the employees regarding the actions to be taken to improve their morale in work. Additionally, the management has to decide on the best strategy to develop training programs to improve the future performance of the employees. Therefore, I would recommend the decisions support IS for this component since it helps the managers to make strategic decisions and business projections that lead to improved future performance.
References
Gueorguiev, I., Dimitrova, S., Komitska, M., Traykov, H., & Spassov, K. (2005). Balanced scorecard based management information system–A potential for public monitoring and good governance advancement. The Electronic Journal of e-Government, 3(1), 29-38.
Kaplan, R. S. (2008). Conceptual foundations of the balanced scorecard. Handbooks of management accounting research, 3, 1253-1269.
Talbot, C. (2010). Theories of performance: Organizational and service improvement in the public domain. Oxford, UK: Oxford University Press
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