News Feature | January 7, 2016

How The Balanced Scorecard Theory Can Help VARs

Christine Kern

By Christine Kern, contributing writer

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Have you wondered if there is a way to monitor finances and growth progress at the same time?

A Blue Star VARTECH Nation blog post by Cesar Camacho, Bluestar Latin America, highlights some of the concepts of “The Balanced Scorecard Theory,” developed by Dr. Robert Kaplan and Dr. David Norton, which can help you achieve this.

According to The Balanced Scorecard Institute, “The balanced scorecard is a strategic planning and management system that is used extensively in business and industry, government, and non-profit organizations worldwide to align business activities to the vision and strategy of the organization, improve internal and external communications, and monitor organization performance against strategic goals.”

In an article for the Harvard Business Review, Kaplan and Norton explain that the theory “revolutionized conventional thinking about performance metrics” by allowing companies to track financial results while monitoring progress towards growth.

The process includes four steps:

  • translating the vision
  • communicating and linking
  • business planning
  • feedback and learning

Typically most businesses are focused on financial aspects of strategic management, but there are three additional perspectives that need to be considered. The Balanced Scorecard Theory helps IT solutions providers and other business owners take each of these perspectives into account as part of the strategic management process.

In the VARTECH Nation blog post, Camacho points out that businesses often focus on the financial aspects of management, but the Balanced Scorecard Theory also takes three additional perspectives into account:

  • learning and growth perspective, including training, organizational culture, knowledge, and improvement in communication
  • business process perspective, including metrics to measure internal business processes and whether products and services meet minimal expectations
  • customer perspective, including metrics that indicate customer satisfaction and how likely they are to remain customers in the future.

Implementing the Balanced Scorecard Theory means managing all four perspectives in a balanced manner, and by adopting strategy mapping, can help reveal connections between the strategic objectives to help achieve your goals. They show a logical, step-by-step connection between the strategic objectives in the form of a cause-and-effect chain of events that can help VARs make the most of their client relationships.

To read Camacho’s blog, click here.