One of the main purposes of a KPI scorecard is to calculate the performance value. Technically it is possible to calculate the performance of:
- A single indicator.
- A group of indicators (container), and even
- The performance of the whole scorecard.
Several single values can be aggregated and presented as a new performance index. We recommend that you be careful about this approach, below are some case studies with our users that illustrate good examples of how such indexes can be created and used.
Combining strategic single values
We use BSC Designer to manage strategic and operational KPIs. These indicators are updated weekly, monthly and yearly. We plan to use the software for the evaluation of single values as well.
We are evaluating BSC Designer and if it fits our needs we are going to implement it into our business processes. The first goal is to transfer the balanced scorecard that we have now in an Excel file to the BSC software. The complicated part may be to create single indicators that will incorporate the aggregated values of other KPIs. For example, in Excel I can consolidate values from different lines by summarizing them and I have to see how to do this with BSC Designer.
A note from developers
Thank you for sharing a detailed implementation plan for BSC Designer and the Balanced Scorecard. I believe BSC Designer will provide all of the necessary features to support your decision. As for MS Excel, I know that a lot of companies use it for a prototype and basic BSC, but then people prefer to move up to a professional BSC Software. Some users reported that BSC Designer helped them to avoid home-made Excel spreadsheets, others say that scorecards in Excel were difficult to maintain or it was too complicated to update Excel spreadsheet with a new information.
I think moving up from Excel to BSC Designer will be a smooth process:
- You can get your data from Excel. You can decide whether to import all the data or link a certain KPI to a specific value in Excel.
- As for working with aggregated values, you can follow the same idea as in Excel. You can specify a formula for a KPI where you can, for example, summarize the values of other KPIs.
Also, you mentioned that KPIs in your scorecard will have a different update interval. In BSC Designer you can specify an update interval for each KPI and the program will inform you about an upcoming upgrade deadline.
That is a simple notification. You can also create special alerts that will inform you about important changes in the KPIs via email.
We used BSC Designer to build an overall index to measure the Supply Chain department performance. There must be an option to use the weight factor.
Jiri Kratochvil, Manager Supply Chain Projects, PMI, Czech Republic
I was searching for a tool, which would help me to build an overall index for Supply Chain department performance. BSC Designer seems to be the right tool – easy to use and also to share with others. So far, I was trying to prepare something similar in MS Excel, however it was too complicated to update with new data. I will see if your BSC Designer will satisfy all of my needs.
A note from developers
Jiri, I thank you for your feedback and opinion about BSC Designer. MS Excel is a popular business tool and there a lot of business professionals who keep their data in Excel Spreadsheets, as for the Balanced Scorecard, it is not really suitable for that task. One can manage to build their formulas and link them, but when it comes to multilevel KPIs or scorecards then the process is a nightmare.
With BSC Designer sharing vital BSC information is easy. You can generate an HTML report and share it with your colleague. Or you can sign up with BSC Designer Online and share the whole project with anyone from your team that has a PC or a tablet with an access to the Internet.
You mentioned that one of your goals is to build an overall index to measure the performance. Although this approach is very popular in the business world, it has its own problems, and doesn’t give a big picture.
For sure, you can use BSC Designer for building an overall index, but I would suggest adding a strategy map with some key indicators on it something similar to what was explained in this article.
Determine the Impact of Intervention Factors on the Finance with BSC
BSC Designer product gives us the possibility to determine the impact of intervention factors on the financial results.
Roger Jean, Principal consultant, WATCH-Consultancy, Netherlands
Your product, the BSC Designer is very easy to use and creates possibilities to determine the reciprocal influence of several factors on the total result of an organization.
For us as consultants, BSC Designer is a very important tool to give insights in complex business situations. We can measure the impact of our interventions on the end results.
A note from developers:
Thank you for your feedback. How did you determine the impact of intervention factors? I think that you used a weight value that each indicator and category have in BSC Designer. In this way one can specify the relevant important of each indicator. BSC Designer calculated the relevant importance taking into account the weight of an indicator, as well the weight of its category. This whitepaper explains in detail how the weight is used in calculations and what formulas are used to calculate a final performance.
A strategy map in BSC Designer has several placement styles. Besides a classical Balanced Scorecard there is a placement style that allows presenting a hierarchy of KPIs in a form of the tree. This type of map is also useful to present indicators and show how they influence on each other.