I came across the concept of Key Performance indicators and Scorecards in the Harvard Business Review, and a book I read by one of the professors on the topic, about 10 years ago. The concept so intrigued me, I was talking with a few co-workers about starting a company based around the concept and the value it brought. At that time there was no commercial software supporting Scorcards.
Today the concept is in full swing, having become a central feature of the Microsoft and Oracle BI platforms. Who uses this technology? What does it cost? Do I use it right out of the box, or do I have a lot of customization to get things going? Is it too expensive for a small company to use?
Lots of tough questions surround the technology and many buy into it without really understanding what it does.
Scorecards consist of Key Performance Indicators that may be measured about a company which have been identified as being critical for success. Basically, they are measurements that may be used to ascertain the success of business goals.
For example, a hospital would not have a KPI to increase the number of patients they see in a month. However, they could have a goal to reduce the cost for providing excellent patient care while reducing their operating expenses. Both the measurement of patient care could be measured as well as the overhead cost of providing that care.
Each major business area of a company will often have a scorecard with multiple Key Performance Indicators (KPI) specific to them. Now you need to track and report on the performance of those KPIs in a meaningful way in order to determine if your company is stressing areas that result in success.
Are Scorecards restricted to companies with deep pockets? Are they valuable to Small to Medium sized businesses? Are you seeing them used effectively? We’ll dive into those questions some tomorrow. If you have thoughts on the matter you can get into the conversation by writing btaylor@sswug.org.
Cheers,
Ben