Balanced Scorecard in Project Portfolio Management - Revision history

Tkokotas at 13:31, 10 November 2018

2018-11-10T13:31:27Z

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Ioanna-Eleni Vasilopoulou: Ioanna-Eleni Vasilopoulou moved page Balanced Scorecard to Balanced Scorecard in Project Portfolio Management

2017-10-02T19:48:38Z

Ioanna-Eleni Vasilopoulou moved page Balanced Scorecard to Balanced Scorecard in Project Portfolio Management

← Older revision	Revision as of 19:48, 2 October 2017
(No difference)

Ioanna-Eleni Vasilopoulou: /* Abstract */

2017-10-02T19:23:17Z

Abstract

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	In order to connect the daily work practices with the strategic goals of a company, the Scorecard approach enables managers to review performance from four different perspectives: Financial perspective, Customer perspective, Internal Process perspective, and Learning and Growth perspective.		In order to connect the daily work practices with the strategic goals of a company, the Scorecard approach enables managers to review performance from four different perspectives: Financial perspective, Customer perspective, Internal Process perspective, and Learning and Growth perspective.

	~~Project Portfolio has to be aligned with organization's strategy~~ in ~~order to bring about desirable outcomes~~ and ~~in this case~~, BSC ~~can be a useful tool that Project Portfolio Managers can apply so~~ as ~~to bridge their Project Portfolio with~~ the ~~Strategy~~ of the ~~organization~~.		Nowadays, BSCs are used extensively in business and industry, government, and nonprofit organizations worldwide. BSC has been selected by the editors of Harvard Business Review as one of the most influential business ideas of the past 75 years and was listed fifth among the top ten most widely used management tools around the world in a recent global study by Bain & Co. <ref>www.balancedscorecard.org/</ref>

	~~Nowadays~~, ~~BSCs are used extensively in business~~ and ~~industry~~, ~~government~~, ~~and nonprofit organizations worldwide~~. ~~BSC has been selected by~~ the ~~editors~~ of ~~Harvard Business Review as one~~ of ~~the most influential business ideas~~ of the ~~past 75 years and was listed fifth among the top ten most widely used management tools around the world~~ in a ~~recent global study by Bain & Co. <ref>www.balancedscorecard~~.~~org/</ref>~~		Among its wide applications, BSC can be a useful tool that Project Portfolio Managers can apply so as to bridge their Project Portfolio with the Strategy of the organizations. This article, at first level, provides the general approach of Balanced Scorecard and, at second level, illustrates how the BSC tool can be useful in Project Portfolio Management. At this level also, it provides a guidance of how the tool can be used for the selection of projects in the context of Project Portfolio Management. Finally, some limitations of the tool in both a conceptual and practical context are stated.

Ioanna-Eleni Vasilopoulou: /* The Idea behind the Method */

2017-10-02T19:07:57Z

The Idea behind the Method

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	Robert S. Kaplan observed that, as companies around the world transform themselves for competition that is based on information, their ability to exploit intangible assets has become far more decisive than their ability to invest in and manage physical aspects. <ref>Using the Balanced Scorecard as a Strategic Management System, Robert S. Kaplan and Dapid P. Norton (2007), Harvard Business Review</ref>		Robert S. Kaplan observed that, as companies around the world transform themselves for competition that is based on information, their ability to exploit intangible assets has become far more decisive than their ability to invest in and manage physical aspects. <ref>Using the Balanced Scorecard as a Strategic Management System, Robert S. Kaplan and Dapid P. Norton (2007), Harvard Business Review</ref>

	Based on this observation, Kaplan introduced the Balanced Scorecard. The latter augments traditional financial measures with benchmarks for performance in three key nonfinancial areas: a company’s relationship with its clients, its key internal processes, and its learning and growing. “When performance measures for these areas are added to the financial metrics, the result is not only a broader perspective on the company’s health and activities, it is a powerful, organizing framework. A sophisticated instrument panel for coordinating and fine-tuning a company’s operations and businesses, so that all activities are aligned with its strategy.” <ref>The Balanced Scorecard~~'''~~, Robert S. Kaplan and Dapid P. Norton (1996), Harvard Business School Press</ref>		Based on this observation, Kaplan introduced the Balanced Scorecard. The latter augments traditional financial measures with benchmarks for performance in three key nonfinancial areas: a company’s relationship with its clients, its key internal processes, and its learning and growing. “When performance measures for these areas are added to the financial metrics, the result is not only a broader perspective on the company’s health and activities, it is a powerful, organizing framework. A sophisticated instrument panel for coordinating and fine-tuning a company’s operations and businesses, so that all activities are aligned with its strategy.” <ref>The Balanced Scorecard, Robert S. Kaplan and Dapid P. Norton (1996), Harvard Business School Press</ref>

	Therefore, BSC enables companies to track financial results while simultaneously monitoring progress in building the capabilities and acquiring the intangible assets they would need for future growth. In other words, it is not a replacement for financial measures but rather their complement.		Therefore, BSC enables companies to track financial results while simultaneously monitoring progress in building the capabilities and acquiring the intangible assets they would need for future growth. In other words, it is not a replacement for financial measures but rather their complement.

Ioanna-Eleni Vasilopoulou: /* The Idea behind the Method */

2017-10-02T19:07:13Z

The Idea behind the Method

← Older revision		Revision as of 19:07, 2 October 2017
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	Robert S. Kaplan observed that, as companies around the world transform themselves for competition that is based on information, their ability to exploit intangible assets has become far more decisive than their ability to invest in and manage physical aspects. <ref>Using the Balanced Scorecard as a Strategic Management System, Robert S. Kaplan and Dapid P. Norton (2007), Harvard Business Review</ref>		Robert S. Kaplan observed that, as companies around the world transform themselves for competition that is based on information, their ability to exploit intangible assets has become far more decisive than their ability to invest in and manage physical aspects. <ref>Using the Balanced Scorecard as a Strategic Management System, Robert S. Kaplan and Dapid P. Norton (2007), Harvard Business Review</ref>

	Based on this observation, Kaplan introduced the Balanced Scorecard. The latter augments traditional financial measures with benchmarks for performance in three key nonfinancial areas: a company’s relationship with its clients, its key internal processes, and its learning and growing. “When performance measures for these areas are added to the financial metrics, the result is not only a broader perspective on the company’s health and activities, it is a powerful, organizing framework. A sophisticated instrument panel for coordinating and fine-tuning a company’s operations and businesses, so that all activities are aligned with its strategy.” <ref>~~Using the~~ Balanced Scorecard ~~as a Strategic Management System~~, Robert S. Kaplan and Dapid P. Norton (~~2007~~), Harvard Business ~~Review~~</ref>		Based on this observation, Kaplan introduced the Balanced Scorecard. The latter augments traditional financial measures with benchmarks for performance in three key nonfinancial areas: a company’s relationship with its clients, its key internal processes, and its learning and growing. “When performance measures for these areas are added to the financial metrics, the result is not only a broader perspective on the company’s health and activities, it is a powerful, organizing framework. A sophisticated instrument panel for coordinating and fine-tuning a company’s operations and businesses, so that all activities are aligned with its strategy.” <ref>The Balanced Scorecard''', Robert S. Kaplan and Dapid P. Norton (1996), Harvard Business School Press</ref>

	Therefore, BSC enables companies to track financial results while simultaneously monitoring progress in building the capabilities and acquiring the intangible assets they would need for future growth. In other words, it is not a replacement for financial measures but rather their complement.		Therefore, BSC enables companies to track financial results while simultaneously monitoring progress in building the capabilities and acquiring the intangible assets they would need for future growth. In other words, it is not a replacement for financial measures but rather their complement.

Ioanna-Eleni Vasilopoulou: /* Limitations */

2017-10-02T19:05:14Z

Limitations

← Older revision		Revision as of 19:05, 2 October 2017
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	==Limitations==		==Limitations==

	In practice, despite widespread use and practitioner-oriented literature suggesting the BSC has beneficial values especially in enhancing organizational performance and strategy achievement, a large body of academics is skeptical about the relationship between BSC and organizational outcomes. In fact, a leading criticism asserts the widespread practice of the BSC in itself does not demonstrate the BSC is beneficial to organizations (Kraaijenbrink, 2012). In support of this assertion, BizShifts (2010) espouse that, within a decade of its inception, an estimated 44% of organizations worldwide had implemented the BSC; however, only 22% to 50% of these organizations achieved higher return on asset and higher return on equity while an estimated 85% of the organizations experienced problems during implementation.<ref>A Critique of the Balanced Scorecard as a Performance Measurement Tool</ref> Based to academics, the problems can be related to:		In practice, despite widespread use and practitioner-oriented literature suggesting the BSC has beneficial values especially in enhancing organizational performance and strategy achievement, a large body of academics is skeptical about the relationship between BSC and organizational outcomes. In fact, a leading criticism asserts the widespread practice of the BSC in itself does not demonstrate the BSC is beneficial to organizations (Kraaijenbrink, 2012). In support of this assertion, BizShifts (2010) espouse that, within a decade of its inception, an estimated 44% of organizations worldwide had implemented the BSC; however, only 22% to 50% of these organizations achieved higher return on asset and higher return on equity while an estimated 85% of the organizations experienced problems during implementation.<ref>A Critique of the Balanced Scorecard as a Performance Measurement Tool, Emad A. Awadallah and Amir Allam (2015), International Journal of Business and Social Science</ref> Based to academics, the problems can be related to:

	'''1. Rigidity'''		'''1. Rigidity'''

Ioanna-Eleni Vasilopoulou: /* Translating Vision into The Four Perspectives */

2017-10-02T19:04:18Z

Translating Vision into The Four Perspectives

← Older revision		Revision as of 19:04, 2 October 2017
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	The BSC translates an organization’s vision into a set of performance indicators distributed among four perspectives: Financial, Customer, Internal Business Processes, and Learning and Growth.		The BSC translates an organization’s vision into a set of performance indicators distributed among four perspectives: Financial, Customer, Internal Business Processes, and Learning and Growth.

	[[File:BSC_Obje.PNG \|600px\|thumb\|centre\|Fig. 1 Translating Vision into four perspectives <ref>Using the Balanced Scorecard as a Strategic Management System</ref>]]‎		[[File:BSC_Obje.PNG \|600px\|thumb\|centre\|Fig. 1 Translating Vision into four perspectives <ref>Using the Balanced Scorecard as a Strategic Management System, Robert S. Kaplan and Dapid P. Norton (2007), Harvard Business Review</ref>]]‎

Ioanna-Eleni Vasilopoulou: /* The Idea behind the Method */

2017-10-02T19:03:58Z

The Idea behind the Method

← Older revision		Revision as of 19:03, 2 October 2017
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	==The Idea behind the Method==		==The Idea behind the Method==

	Robert S. Kaplan observed that, as companies around the world transform themselves for competition that is based on information, their ability to exploit intangible assets has become far more decisive than their ability to invest in and manage physical aspects. <ref>Using the Balanced Scorecard as a Strategic Management System</ref>		Robert S. Kaplan observed that, as companies around the world transform themselves for competition that is based on information, their ability to exploit intangible assets has become far more decisive than their ability to invest in and manage physical aspects. <ref>Using the Balanced Scorecard as a Strategic Management System, Robert S. Kaplan and Dapid P. Norton (2007), Harvard Business Review</ref>

	Based on this observation, Kaplan introduced the Balanced Scorecard. The latter augments traditional financial measures with benchmarks for performance in three key nonfinancial areas: a company’s relationship with its clients, its key internal processes, and its learning and growing. “When performance measures for these areas are added to the financial metrics, the result is not only a broader perspective on the company’s health and activities, it is a powerful, organizing framework. A sophisticated instrument panel for coordinating and fine-tuning a company’s operations and businesses, so that all activities are aligned with its strategy.” <ref>Using the Balanced Scorecard as a Strategic Management System</ref>		Based on this observation, Kaplan introduced the Balanced Scorecard. The latter augments traditional financial measures with benchmarks for performance in three key nonfinancial areas: a company’s relationship with its clients, its key internal processes, and its learning and growing. “When performance measures for these areas are added to the financial metrics, the result is not only a broader perspective on the company’s health and activities, it is a powerful, organizing framework. A sophisticated instrument panel for coordinating and fine-tuning a company’s operations and businesses, so that all activities are aligned with its strategy.” <ref>Using the Balanced Scorecard as a Strategic Management System, Robert S. Kaplan and Dapid P. Norton (2007), Harvard Business Review</ref>

	Therefore, BSC enables companies to track financial results while simultaneously monitoring progress in building the capabilities and acquiring the intangible assets they would need for future growth. In other words, it is not a replacement for financial measures but rather their complement.		Therefore, BSC enables companies to track financial results while simultaneously monitoring progress in building the capabilities and acquiring the intangible assets they would need for future growth. In other words, it is not a replacement for financial measures but rather their complement.

Ioanna-Eleni Vasilopoulou: /* Limitations */

2017-10-02T19:01:27Z

Limitations

← Older revision		Revision as of 19:01, 2 October 2017
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	==Limitations==		==Limitations==

	In practice, despite widespread use and practitioner-oriented literature suggesting the BSC has beneficial values especially in enhancing organizational performance and strategy achievement, a large body of academics is skeptical about the relationship between BSC and organizational outcomes. In fact, a leading criticism asserts the widespread practice of the BSC in itself does not demonstrate the BSC is beneficial to organizations (Kraaijenbrink, 2012). In support of this assertion, BizShifts (2010) espouse that, within a decade of its inception, an estimated 44% of organizations worldwide had implemented the BSC; however, only 22% to 50% of these organizations achieved higher return on asset and higher return on equity while an estimated 85% of the organizations experienced problems during implementation.<ref ~~name="d"~~/> Based to academics, the problems can be related to:		In practice, despite widespread use and practitioner-oriented literature suggesting the BSC has beneficial values especially in enhancing organizational performance and strategy achievement, a large body of academics is skeptical about the relationship between BSC and organizational outcomes. In fact, a leading criticism asserts the widespread practice of the BSC in itself does not demonstrate the BSC is beneficial to organizations (Kraaijenbrink, 2012). In support of this assertion, BizShifts (2010) espouse that, within a decade of its inception, an estimated 44% of organizations worldwide had implemented the BSC; however, only 22% to 50% of these organizations achieved higher return on asset and higher return on equity while an estimated 85% of the organizations experienced problems during implementation.<ref>A Critique of the Balanced Scorecard as a Performance Measurement Tool</ref> Based to academics, the problems can be related to:

	'''1. Rigidity'''		'''1. Rigidity'''

Ioanna-Eleni Vasilopoulou: /* The BSC Implementation Steps */

2017-10-02T19:00:32Z

The BSC Implementation Steps

← Older revision		Revision as of 19:00, 2 October 2017
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	These eight steps provide a guidance through which the BSC will translate the strategy into projects that will move the organization towards its mission and vision (Figure 4):		These eight steps provide a guidance through which the BSC will translate the strategy into projects that will move the organization towards its mission and vision (Figure 4):

	[[File:The_road_to_BSC.PNG\|600px\|thumb\|centre\|Fig.4 The Road to a BSC (https://www.slideshare.net/robtoledo/from-balanced-scorecard-to-project-portfolio-management)]]		[[File:The_road_to_BSC.PNG\|600px\|thumb\|centre\|Fig.4 The Road to a BSC <ref>https://www.slideshare.net/robtoledo/from-balanced-scorecard-to-project-portfolio-management</ref>]]

	==Limitations==		==Limitations==