Balanced Scorecard
Whether it occurs during negotiations with a client or during formulation
of an internal improvement plan, a balanced scorecard is often proposed
as a method for measuring and reporting progress. Frequently, organizations
use a balanced scorecard as a mechanism for proving performance
and claiming a share of rewards. Regardless of the context, it can
be a useful tool for many purposes. However, if the metrics reported
are not clearly defined and if the specific commitments are not
reasonably achievable, then balanced scorecards are of little long-term
use and often lead to more problems and disputes than they resolve.
SPR can assist both during the formulation of a balanced scorecard
and after the implementation of one.
The Chief Causes of Disaffection with a Balanced
Scorecard
All too often, metrics and associated scoring systems that organizations
agree to at the outset of a relationship quickly diminish in value
and significance. There are two chief causes for this disappointing
turn of events.
First, when the metrics themselves are only generally defined,
or if the components of performance (e.g., deliverables, response
time, problem and severity levels, etc.) are not easily measurable,
confusion can quickly arise. Sooner or later it becomes apparent
that the contents of the balanced scorecard reports do not contain
useful or meaningful data. Just as quickly, confidence in the balanced
scorecard diminishes and improvement ceases to be an objective,
observable fact, becoming instead more a matter of opinion or point
of view. This, of course, defeats the entire purpose of the balanced
scorecard.
Second, even when metrics are meaningful and well defined, if the
targets set are not within the realm of possibility, no one is served.
Improvement is held hostage to unreasonable expectations and/or
foolishly optimistic promises. Confidence and harmony are almost
always the casualties under such circumstances. Client demands escalate,
as improvement seems to lag, while IT managers ratchet up their
commitments with no certainty whatsoever that they can be met.
SPR Can Help Before and After You Have a
Balanced Scorecard
While you are debating the elements going into a balanced scorecard,
SPR can draw upon our industry experience and knowledge base of
project data to help you better understand what metrics to use and
what commitments make sense. If you are already operating under
the implicit expectations of a balanced scorecard, SPR can help
optimize your position by reviewing and strengthening your metrics
data gathering capability. In addition, SPR can advise on how to
make the required metrics more than just contract management overhead
and turn them into valuable knowledge capital.
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