Balanced Scorecard in Project Portfolio Management

Abstract

The Balanced Scorecard (BSC) is a strategic planning and management system that organizations use to connect the strategy elements such as vision, mission and core values with more operational elements such as objectives, measures and targets.

It was introduced by Robert S. Kaplan in 1992 (“The Balanced Scorecard – Measures that drive performance”, Harvard Business Review) after observing that managers focused their attention only on aspects of performance that were measurable, with the primary measurement system in most organizations being based on financial accounting. In their view, these financial reporting systems fail to measure or provide a basis for managing the value created by the organization’s intangible assets.

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.

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.