What is a Balanced Scorecard, an Easy Method for Reviewing Company Performance

When you run a company, there must be a climate for all elements to continuously improve their performance to be always better based on existing assessments. This form of assessment can be done using a Balanced Scorecard or a balanced scorecard.

Balanced Scorecard or abbreviated BSC is a method of assessing the performance of a company by collecting four data from different perspectives. The perspectives used are, financial perspective, customer perspective, internal business process perspective, learning and growth perspective.

At first Balanced Scorecard or abbreviated BSC is only used to improve the performance appraisal system for executives. However, over time the BSC is also used to measure the company's operational activities on a smaller scale such as departments. With this BSC, it really helps companies to make the right decisions after being able to see the overall perspective.

4 Balanced Scorecard Perspective

Financial Perspective

In Balanced Scorecard The financial perspective cannot be ignored because it can show whether the planning and implementation that has been carried out can have a good impact on the company or not. These positive impacts can be in the form of: gross operating income, return on investment or economic value-added. The achievement of the vision from a financial perspective can be seen in the following ways.

• Increased customer satisfaction through increased revenue
• Increased productivity and employee commitment through cost effectiveness resulting in an increase in profit.
• Increasing the company's ability to generate cash flow by reducing the capital expended or investing in projects that generate income return tall one.

Key financial perspective: profit, growth trend, economic value-added, return of equity and investment, and cash flow

Customer Perspective

From a customer perspective, Balanced Scorecard This can only be used after determining the segment and target customer. Customer benchmarks are divided into two groups, namely: core measurement group (core group) and customer value proposition (support group). The core group consists of:

• Market share
• New customer acquisition rate
• The company's ability to retain old customers
• Customer satisfaction level
• Customer profitability

While the support groups are divided as follows.

• Product attributes (price, quality, function)
• Relationship with customers
• Image and reputation

Key consumer perspective: Satisfaction, retention, acquisition, value benefit, and market share consumer

Internal Business Process Perspective

The internal process perspective presents business unit processes to provide value so that they are able to attract and retain customers in the market segment and satisfy shareholders.

In general, the basic principles of the internal business perspective are as follows:

a) Innovation Process

The innovation process consists of two things, namely: identifying customer desires, and carrying out the design process according to customer desires.

 b) Operation Process

This operating process is all activities carried out by the company, from planning to sales. The operation process emphasizes that the delivery of products to customers must be efficient and timely.

c) After-sales service

After-sales service is a service provided by the company to consumers as a guarantee of the quality of the products that have been purchased. An example of this product is a warranty.

Learning and Growth Perspective

From all perspectives it definitely boils down to this perspective, namely providing the infrastructure to generate long-term growth and improvement for the company. The learning and growth perspective includes three principles of capability related to the company's internal conditions, namely:

a) Worker Capability

The capability of workers is part of the contribution of workers or employees to the company, regarding this there are three things that management must pay attention to:

• Worker Satisfaction
• Worker Retention
• Worker productivity

b) Information system capabilities

The benchmark for information system capability is the level of availability of information, the accuracy of the information, and the time period for obtaining the required information.

c) Organizational Climate

Organizational climate is one that encourages motivation, and empowerment is important to create workers who take the initiative.

The point in this learning and growth perspective emphasizes organizational aspects. How the company manages existing resources to become superior.