To celebrate two decades from its implementation and success in the business world, the Advanced Performance Institute (API) carried out a global survey to find out how companies are approaching BSC analysis, what tools they use and what areas they measure.  Best practice conclusions have been drawn from the survey to help businesses today redeem maximum benefits from their performance management systems.

One of the most important points the API brings is a clear picture how much business performance management has evolved. Twenty years ago managers started their journey towards a more structured route in managing business success, and most of this was portrayed in numbers, percentages and a large number of reports. Today we moved away from paperwork and even excel spreadsheets, as we embraced an interactive platform where technology meets business.

The high end business performance management tools of today allow managers to monitor performance automatically, visualize the progress on their mobile devices, get live reports and share data with the entire organization. It is fundamental to understand this evolvement when we think of business performance management today – it is interactive, visual, user-friendly, and easily-communicated across the organization and most importantly – is automatic.

It is probably not an overstatement to say that all these factors give the answer to why business performance tools are present today in almost every organization that takes a strategic approach to its business success. Business performance tools are simply that competitive edge every aspiring business needs.

The Measuring and Managing Performance – A Global Study, carried out by API, surveyed over 3000 companies across the globe and found out that whilst majority of them do use business performance management tools, not many actually redeem the full benefits of its implementation. This is a review of the study that gives you an up-to-date snapshot of how the balanced scorecard analysis is used at a global level, as well as advice on how you can make the most for you company.

Linked to this review is a best practice report on how to make the most out of your balanced scorecard performance management implementation. Click here to view the report.

However, before discussing the results of the API study, it is important to note one striking statistic. Out of the exact number of 3083 companies responding the survey, results show that 20% either don’t collect performance data, or they measure it inadequately.

This result shows the astonishing reality that in spite of today’s performance management theory advancement, there are still businesses out there not implementing the concept, and losing out on up to two decades of management evolvement. In terms of competitiveness and businesses success, this figure alone can have a great impact; therefore, it is fundamental to ensure your business is not falling into one of those 20% categories.

The research shows that only 11% of the 3083 companies use the BSC method to its full potential, and enjoy the benefits of improved strategic decision making, as well as overall enhanced business and operational efficiency.

In this review we look at 3 important things that the API survey brings to light:

1. Common BSC tools used by companies worldwide
2. Areas of business measured for the BSC analysis
3. Business Performance Model Maturity

Common BSC Tools Used By Businesses Worldwide

Since the introduction of the balanced scorecard method, twenty years ago, companies have moved from excel spreadsheets to truly cutting-edge BSC tools.  The businesses participating in the API survey use together up to thirteen different management tools, listed below:

1. KPIs

-  the most popular method, also used as part of Balanced Scorecards and dashboards (77%+)

2. Performance Appraisals

3. Mission and vision statements

4. Management/Executive Dashboards

5. Lean management/Six  Sigma Approach

6. Benchmarking

7. BSC (38%)

-  although strategy maps have proven to play a key role in the successful implementation of BSC as a BPM tool, only half of companies using BSC actually also create strategy maps

8. Reward and Recognition Schemes

9. Business Intelligence

-  moving from tracking performance to predicting future performance – only 1/3  of businesses used BI and analytics to predict future performance – the problem is that not many businesses optimize their data analysis to redeem the full benefits of the BPM tool. In spite of this, businesses still use BI per department, and fail to join analysis together to draw overall business data that drives strategic decision-making.

10. Rolling Forecasts

-  revising original forecasts and budgets against current insights

11. Enterprise Risk Management

- flip side approach to enterprise performance management – managing the risks – regularly assessing the risk of not meeting performance targets – this tool can be efficiently used with KPIs and KRIs (Key Risk Indicators)

12. Strategy Maps

13. Big Data Analysis

-  web logs, data from mobile devices, search engine stats, social media platforms  – 7% of companies surveyed use this large set of data to inform their decision making  – opportunity to optimize KPIs with this data and better understand and manage customer and employee behaviour

The norm is that majority of companies use between 2-5 tools to manage business performance, among which KPIs are mostly used. More than two thirds of companies use KPIs only, majority for the purpose of dashboards.

The predominant use of KPIs is rather surprising, considering that there are numerous BSC softwares on the market, that enable automatic creation of dashboards, reports, as well as built-in structures for KPIs, that can be easily shared at an organizational level.

However, despite the benefits that BSC softwares bring, most users are intimidated by the difficulty of the programs, especially at the perspective of training an entire organization at using it.

Although the sole use of KPI is still a fantastic step forward in performance management, the efficient use of BSC softwares is far more rewarding. This is why the market calls out for user-friendly BSC softwares that will enable executives, middle managers and the rest of the employees to easily use the system and retrieve data.

Returning to the fact that companies use 2-5 performance tools, with KPIs leading the way, it is important to note that the key in redeeming the most benefits of a multi-tool performance management system is to have all the tools aligned with each other and the organizational strategies, in order to drive strategic and informed decision-making. Failing to do so will simply produce data that can be relevant to some departments but may not serve the overall business performance.

Areas of Business Measured for the BSC Analysis

Most companies only monitor financial performance – which is not a very good approach as it is a so-called lagging indicator – portraying past performance and not current or future performance. Although it is still the ultimate goal of the business to monitor financial performance – it should not be the only one. API results suggest that for the private sector financial performance rates as 100% in the main business area measured.

Financial performance is of course the stakeholder’s main interest and measuring this area of business gives them knowledge and valuable data to build strategies upon that can shift performance and increase profits. However, other areas of business always have a great indirect impact on financial performance, and measuring this under a BSC could bring benefits.

As approximately 16% of the companies surveyed by API were public sector, the results also shown other areas being measured. The second biggest sector businesses monitor is operational performance (75%). This might well be due to the current economic situation. Monitoring operational performance helps businesses to identify key areas of operational importance and thus save costs.

Businesses also monitor customers and employees as it helps them increase internal efficiency. There is also focus on sales and marketing. In minor scale some businesses in the survey also monitor IT performance, business culture and leadership, social responsibility and environmental performance.

Business Performance Management Maturity

Even though the balanced scorecard performance management model has been around for two decades, it is still questionable how efficiently businesses implement it. For this reason, the API study report draws together seven key aspects of a mature business management model. These seven key aspects are identified as best practice in business performance management.

The seven key points are:

1.      Buy-In and ownership of Business Performance Management

2.      Internal and voluntary

3.      Strategic – Operational alignment

4.      Traditional performance measurement and analytics.

5.      Measuring and managing the future.

6.      Data quality

7.      Dedicated technology

See Business Performance Management Maturity Best Practice Report here

Conclusions on Two decades of Balanced Scorecard Analysis

The API report provides an overview of the current state of business performance management and draws its own maturity model. This helps business to identify key areas they can improve as well as areas they need to monitor and how they can redeem the most benefits out of their BSC implementation.

The report finds that having BSC tools in place is not sufficient, if they are not implemented correctly. Thus an integrated approach that uses both operational and strategic metrics is required for successful business performance management.

There has been a clear shift in involving more wide-ranging approach to business performance measurement but the survey shows that there still needs to be work done in the correct BSC implementation.

Increasingly businesses do measure and manage performance, but there is still a lack of satisfaction regarding the effectiveness of the performance management systems. The business-wide approach is also yet to be embraced by all businesses using BSC tools.

The survey shows that majority of the performance measurement is managed and analysed in the senior managerial level. However, including a business-wide approach that involves all sectors of business the performance management would prove more influential.

Most businesses are using basic performance measuring and analytical tools but there is more room to improve the correct use of special tools. The seven factors indicating the business performance maturity show that by proper implementation and use, BSC performance management can have a groundbreaking impact on business success.

The Advanced Performance Institute study surveyed over 3000 companies about their practices of implementing the Balanced Scorecard concept. See a review of the survey report here

The API study looked at how satisfied businesses were with heir performance management methods and identified 7 key points to ensure that the BSC is implemented at full potential:

Step 1: Buy-In and Ownership of Business Performance Management.

In order for the BSC performance management system to work successfully in all areas of the organization, it has to be embraced by the entire organization.  It is important that executives, top managers, middle managers and regular employees, all gain a sense of ownership over the performance system and work with it to make it impact business success.

Ensure that you have communicated and got everyone to buy-in and be part of the BSC performance management analysis.

Step 2: Internal and Voluntary

API study results show that when the BSC performance management concept is introduced as a voluntary action to gain business knowledge and improve decision making, it has a higher success rate than when introduced as a matter of reporting.

It is important that employees don’t feel that the management system is another method to catch them out. If they see it as a tool to improve working practices, gain further knowledge on business management and eventually increase their work efficiency and the business success, they are much likely to come on board. If an organization has got their employees working together to redeem benefits from the BSC implementation, the success rate is likely to be much higher.

Step 3: Strategic – Operational Alignment

It is fundamental for a business to aligning strategic and operational business metrics. Failing to do so will minimize the impact of the performance management system.  This means aligning KPIs with the Strategy Map, Mission and Vision, in order to support strategic decision-making.

Step 4: Traditional Performance Measurement and Analytics

A real time performance reporting is achieved when KPIs are combined with Balanced Scorecards, business intelligence and analytics.  This practice will ensure that the BSC implementation is based on a holistic business approach. BSC softwares are capable of incorporating all these elements together and ensuring that your Business Performance Management (BPM) works at full potential.

Step 5: Measuring and Managing the Future

Focusing on real time and future performance means greater maturity but the survey showed that only 11% do this. Performance enhancing objectives are more important than looking at past performance. Strategies can only change the future of the business success, and the past should be used as a tool of learning.

Step 6: Data Quality

To have more mature business performance management it is essential to apply a well-governed data quality management.

Step 7: Dedicated Technology

According to the API survey over 60% of the businesses use tools such as Microsoft Excel to monitor and report performance, around 15% use Business Intelligence or similar products, 12% use dashboard softwares and only about 10% used integrated performance systems or analytics.

Technology plays an essential part in BPM as it helps companies break the barriers and implement successful BSC performance management methods. Whilst some companies limit themselves at filling in a quarterly spreadsheet with KPIs, some use sophisticated softwares to get real-time reports, intelligent data and communicate across the organization instantly.

This best practice report, based on the Based on API Survey – The Measuring and Managing Performance – A Global Study, aims to gives businesses a kick start on the BPM. By implementing the seven steps your business can fully benefit from the BSC analysis.

Learn more about BSC analysis and two decades of success here

URL: www.webbsc.com
Publisher: BSC Designer
Price: $30/month per project.

BSC Designer Online is a web-based, SaaS balanced scorecard software to track organizational and individual performance against key performance indicators. The software is user-friendly and provides guidance in setting up KPIs, measures and for strategy map visualization.

>> Back to the list of the SaaS Balanced Scorecard Software

Various KPIs can be easily added into the system and stop lights track performance against benchmark measures (see screenshot below)

The software also supports formulas for KPI values and can translate performance into strategy maps (see screenshots below).

BSC Designer Online can view strategy maps created with BSC Designer PRO version.

Functionality Summary:

URL: www.viewtarget.com
Publisher: ViewTarget

ViewTarget is a web-based balanced scorecard solution that is focused on mid-sized companies.

>> Back to the list of the SaaS Balanced Scorecard Software

KPIs and calculated measures/formulas are supported (see screenshot below).

It is possible to access performance against measures, performance is visualized on a dial with color-coded indicators (see below).

Data can be imported from “Excel and other applications,” according to the company’s website. For companies that are seeking a basic balanced scorecard product without too many bells and whistles, ViewTarget is worth further exploration.

Functionality Summary:

Name of Solution: SpiderStrategies
URL:  www.spiderstrategies.com
Publisher: Spider Strategies, Inc.
Price: $99 per user; $39 per limited user (can comment and update metrics, but cannot create them).

SpiderStrategies is one of the most popular web-based balanced scorecard SaaS tools. The tool is widely used by some of the most recognizable large companies in the United States, and offers numerous features that will meet nearly any business’s needs.

>> Back to the list of the SaaS Balanced Scorecard Software

Key performance indicators can be created easily and performance against benchmark measures are clearly displayed using a color-coded visual display (see screenshot below). Additionally, formulas and calculated measures are supported, and data from external sources can be automatically imported into the system using My SQL queries. Additionally, SpiderStrategies offers a large library of established KPIs for more than 20 industries.

Strategy maps are also easily created (see screenshot below).

Data can be exported into a variety of formats including Powerpoint, Word, Acrobat and .jpg files. Spider strategies is a user-friendly, high-functioning and affordable SaaS solution for balanced score cards and it’s no wonder it is one of the more popular tools available.

Functionality Summary:

URL: www.simplekpi.com
Publisher: Iceberg Software
Price: Individual subscription = $19/month (up to three users), standard = $79/month (up to ten users), enterprise = $159 (unlimited users)

Simple KPI is a balanced scorecard SaaS platform that is user friendly and features a large library of key performance indicators for various departments and industries.

>> Back to the list of the SaaS Balanced Scorecard Software

The platform lacks some of the advanced features offered by its competitors but its excellent library of KPIs (see screenshot below) and scorecard templates makes it an excellent choice for users who lack the expertise or energy to develop their own measures.

Performance against KPIs is clearly displayed via color-coded measures (see screenshot below). Calculated measures/formulas are also supported (see second graphic below).

Data can be exported to Word, Excel or .pdf. This is user friendly and affordable with a great library of templates and is a good choice for small businesses that don’t currently require access to more advanced data applications. 

Functionality Summary:

URL: www.planbase.com
Publisher: PlanBase, Inc.

PlanBase is a web-based balanced scorecard solution that supports and tracks key performance indicators, allowing businesses and other organizations to track performance against their strategy. The platform offers advanced features and functionality. Some of the advanced features include drill-down screen to help discover root causes, color coded performance indicators (stop lights), and linking to process maps, websites and more (see below for screenshots).

>> Back to the list of the SaaS Balanced Scorecard Software

The data can be automatically imported from some applications, further detail is not provided on company’s website (see feature summary at end of review for more information).

Formulas for performance/KPI values are supported (see screenshots below), and data is presented in various types of graphs to help users make sense of performance trends.

 Functionality Summary:

URL: www.kpifix.com
Publisher: KPIfix
Price: Basic = $49/month per month (up to 3 users); Professional = $99/month (up to 10 users); Enterprise = $199/month (unlimited users); 30-day free trial available

KPIfix is a basic balanced scorecard software that, while it lacks advanced features, is user friendly and affordable.

>> Back to the list of the SaaS Balanced Scorecard Software

KPI fix allows the development of key measures across the four key categories of strategic performance: financial, customer, internal process and learning and growth. Progress is tracked over time, and color-coded stop lights give provide a quick assessment of organizational health at a glance (see screenshot below).

Formulas for performance/KPI value are supported in this software (see screenshot below).

KPIfix is designed for small business without large amounts of data. Data must be manually entered. The company explains its decision to only offer manual input on its website: “It takes about 30 seconds for an input user to enter a score against a KPI. We figure this is a LOT less time and a LOT less costly than dealing with the complexity of hooking directly to your data systems.” Exporting data also seems difficult, as a user must email the company directly with an export request. KPIfix offers a barebones scorecard software, but for companies that do not need the more advanced features, it could be a nice, affordable choice.

Functionality Summary:

URL: http://insightformation.com
Publisher: InsightInformation, Inc.
Price: vendor need to be contacted

InsightVision is a SaaS platform to track organizational performance against key metrics. The company’s tools seem specifically marketed to healthcare and public health organizations, but it also offers templates for more traditional businesses.

>> Back to the list of the SaaS Balanced Scorecard Software

Key performance measures can be created for various initiatives, and performance easily visualized through color-coded indicators (see screenshots below).

Insight Vision also creates detailed strategy maps, drawing from data within the system.

Overall, the design is simple and one of the most user-friendly among the various SaaS balanced scorecard tools available. However, the lack of information available on its features and pricing means potential users will need to spend considerable time demoing the product to ensure it fits their business needs.

Functionality Summary:

URL: www.executivestrategymanager.com
Publisher: Palladium
Price: Unable to determine; free 30-day trial available

Executive Strategy Manager is a web-based SaaS platform for tracking organizational performance using a balanced scorecard approach.

>> Back to the list of the SaaS Balanced Scorecard Software

The tool allows for easy creation of key performance indicators and tracks performance. Users can view parent objectives, objectives, measures, targets and weights of eat objective in a single screen. Current performance against each objective is easily accessed through color-coded markers (see screenshot below).

The SaaS platform has a number of advanced features, making it an appropriate tool for organizations with large amounts of data to import and analyze. These features are further explained below.

Performance data can be easily viewed in a number of graphic formats within the tool’s main dashboard (see below).

Additionally, data can be drawn automatically from various external databases, imported from Excel (see images below) or entered manually.

Executive Strategy Manager also allows users to create formulas for calculated measures.

Strategy maps are also easy to create, as Executive Strategy Manager draws information directly from the KPIs and formats a strategy map based on the information.

Functionality Summary: