Application of Balanced Scorecard in Portfolio Management
Contents |
Abstract
In this article the application of Balanced Scorecard (BSC) will be investigated in relation to Portfolio Management. BSC is a strategic planning tool, which addresses the strategic objectives and often measures them in form of Key Performance Indicators which is evaluated, reported and incorporated into a strategic feedback-loop[1]. Each executed project within a portfolio should be aligned with the strategic objectives in the organisation. To ensure the linkage between each project and the strategic objectives, balanced scorecard can be applied and provide the portfolio management with a set of initiatives and measures, which would indicate if the outcomes from a given project provides the expected returns or growth to the portfolio and organisation.
To facilitate the merge between strategic management and portfolio management this article will present an argumentation of why BSC benefits portfolio management, including a definition of both portfolio management and BSC, the direct linkages inbetween and a reasoning for application based on theory. This will be followed by how the application of BSC in portfolio management should be initiated and an identification of the strength and weaknesses. Also the limitations and risks derived from the application of BSC will be identified and elaborated. To inspire further reading an annotated bibliography will be conducted, to enhance the understanding of the tool and core literature.
Definition through theory
In this section of the article all theory applied will be outlined and discussed. The purpose is to give the reader an enchanced understanding of the BSC and the linkage to portfolio management.
Balanced scorecard
Key Performance Indicators
Stakeholders
The four perspectives
Portfolio management
Linkages
Implimentation
Steps
Strengths
Weaknesses
Limitations
Risks
Annotated Bibliography
Project Management Institute. (2018). The standard for portfolio management.
Toledo, R. (2011). From the balanced scorecard to the project portfolio. Paper presented at PMI® Global Congress 2011—North America, Dallas, TX. Newtown Square, PA: Project Management Institute.
Kaplan, R. S., & Norton, D. P. (2001). Transforming the Balanced Scorecard from Performance Measurement to Strategic Management : Part I, 15(1), 87–104.
References
[2] [1] [3] [4] [5] [6] [7] [8] [9]
- ↑ 1.0 1.1 Kaplan, R. S., & Norton, D. P. (2001). Transforming the Balanced Scorecard from Performance Measurement to Strategic Management : Part I, 15(1), 87–104.
- ↑ Project Management Institute. (2018). The standard for portfolio management.
- ↑ https://www.pmi.org/
- ↑ Alsadeq, I., Fatehy, T., & Othman, O. (2009). PMI® and BSC marriage! Where can PMI standards meet balanced scorecard? Paper presented at PMI® Global Congress 2009—EMEA, Amsterdam, North Holland, The Netherlands. Newtown Square, PA: Project Management Institute.
- ↑ Toledo, R. (2011). From the balanced scorecard to the project portfolio. Paper presented at PMI® Global Congress 2011—North America, Dallas, TX. Newtown Square, PA: Project Management Institute.
- ↑ Tharp, J. (2007). Align project management with organizational strategy. Paper presented at PMI® Global Congress 2007—Asia Pacific, Hong Kong, People's Republic of China. Newtown Square, PA: Project Management Institute.
- ↑ Toledo, R. (2011). Bridging the strategy gap. PM Network, 25(6), 18.
- ↑ Olivier, A. J. (2007). Guideline for travelling [i.e. traveling] from vision to projects and back. Paper presented at PMI® Global Congress 2007—EMEA, Budapest, Hungary. Newtown Square, PA: Project Management Institute.
- ↑ Hoffman, W. (2004). The view from 50,000 feet. PM Network, 18(7), 26–33.
