ISSUES AFFECTING IMPLEMENTATION OF THE BALANCED SCORECARD

The deployment or implementation of the balanced scorecard and its related software is not an easy process for any company. Several issues can arise during the implementation process, which need to be addressed as soon as possible for the process to be successful and beneficial to the company. Some of the major issues that can hamper the deployment process include:

  1. Fear

A balanced scorecard is designed to measure the performance of a certain element of the company. The scope of the balanced scorecard is wide and it can be used to measure performance and improvement on an individual level as well as on the organizational level. The unfortunate thing about tying an individual’s performance with the scorecard is that it creates fear in individual employees. Too much reliance on using the BSC to measure individual performance will scare employees, hindering their productivity.

In addition, using the scorecard to measure the performance of the individual will also eradicate the incentive for the management to be responsible for strategic management in the company. The purpose of the balanced scorecard is to encourage the management to be more proactive when it comes to strategic planning and management. The situation gets even worse when balanced scorecard software is put in place, and the management washes its hands of the responsibility of strategically planning its human resource.

Experts recommend that the data gathered from the BSC should only be used in the aggregate, and not for evaluation of individual performance. The collective performance of the different branches, or teams should be the main concern for upper management, and not the performance of specific individuals. Once everyone understands this aspect of the BSC, then the fear involved with employee evaluation will diminish.

  1. Cost

The cost of the balanced scorecard software is another major concern for most companies intending to implement the BSC. Most of the vendor software created to support the BSC is often marketed to Fortune 100 companies, indicating that they may be too pricey for average companies. Even if a company can afford the expensive software, they soon realize that it cannot collect the required data needed for measurement. The gathering of the data is a labor-intensive process and can cost the company a lot of money.

Many companies would prefer to develop the software in-house, which also has its own challenges. However, bringing in an external consultant to design the software and conduct surveys will be more cost-effective in the end. In addition, designing the software in-house will ensure that the software meets the specific needs of the company. This means that the software will be tailor-made for the company.

  1. Objectivity

Another worrying issue that affects the implementation of the balanced scorecard is the objectivity of the information that will be produced, as well as disseminated throughout the organization. As information moves across the organization, there is always likelihood that it will be massaged and managed. The worry is that the balanced scorecard software, like other information management systems before it, will be used to micromanage the information that flows throughout the company.