Balanced scorecard in project management

Balanced scorecard (BSC) in project management

The Balanced Scorecard (BSC) is a particular approach developed by Robert S. Kaplan as an instrument to reveal the business areas afflicted with problems and to point out areas for improvement. It involves four key business aspects (financial perspective, customer perspective, internal business perspective, learning and growing perspective) in order to provide an overall view on all the organization’s sides and aspects through measurable goals and outcomes, and exploits also a visual approach using the model of the “stoplight” color scheme.

Since projects can be considered “mini organizations”, requiring a strong control of the current situation, the BSC is a powerful tool for project management as well, providing continuous checks throughout the project life cycle.

An essential milestone in the development of an effective BSC is the choice of which measurements better fit the project needs, in order to gain high productivity and to improve quality. Hence, these measurements have to be chosen in a proper way, being sure not to weight down the control process.

As in every management tool, the application of the BSC request to follow a procedure made up in four fundamental phases:

• the initiation phase, in which the managers have to establish the link between the organization’s vision and the project vision;

• the planning phase, in which a clear plan has to be created, taking in account risks and communication management;

• the execution phase, during which it is required a continuous process of monitoring and control to fit the changes due to not expected results;

• the closing phase, in which documents and reports are created, in order to conserve the “lessons learned” during the project and to develop the organization’s best practice.