Balanced Scorecards used by very few mid-sized organisations

The latest research from Source for Consulting, in partnership with Advanced Business Solutions has shown that less that 20% of larger SME’s in the UK are using Balanced Scorecards to measure their performances. 21 IT consultants with experience of working with more that 500 mid-sized UK organisations were both interviewed and surveyed by Source.

Using the experience of the consultant as the basis for the resarch, they highlighted the fact that less than 100 of the 500+ organisations they had worked for used Balanced Scorecards, or Dashboards, and just over 50% used them as a primary tool in managing their businesses.

Given that these statistics represent companies who have used IT consultants, the actual rate of Balanced Scorecard implementation across all UK mid-sized companies is likely to be even lower than these numbers suggest.

The research identifies that the key barrier to implementation of Balanced Scorecards amongst mid-sized organisations is the lack of a clear owner or champion for the project (over 40 per cent of respondents highlighted this as an issue). Another key barrier is an organisational culture that doesn’t support analysis and objective decision making.

Simon Fowler, Managing Director of Advanced Business Solutions (Commercial Division), says, “The majority of UK mid-sized organisations haven’t even begun to consider using a Balanced Scorecard approach for performance measurement.

With the economy in turmoil, it’s understandable if companies aren’t looking at investing in Scorecards right now; however the smart organisation will recognise the intrinsic value of having clear measures for tracking the business’ progress, especially during a challenging climate.”

According to Source’s research, in order for a mid-sized organisation to successfully implement Balanced Scorecards, a number of key actions are required. These include obtaining the buy-in of key executives; ensuring senior management spend time developing the measures; sending out the right messages about the importance of the Scorecards and making sure they are aligned with individual performance measures; and leveraging the right technology to ensure the Scorecard implementation is a success.

With over 70 per cent of those surveyed identifying that the main benefit of a well-implemented Balanced Scorecard approach is the alignment of the senior management team, this provides a strong case for investing in Scorecards. The second and third most important benefits highlighted by respondents is the positive impact that Scorecards have on an organisation’s ability to track progress towards agreed goals and the clarity they provide throughout the organisation on what needs to be done.

Fiona Czerniawska, Joint Managing Director from Source for Consulting adds, “Starting down the Balanced Scorecard route may seem a challenging journey, however it needn’t be costly and disruptive to the business. By considering the key elements of success from engaging senior management through to harnessing the right technology, a Balanced Scorecard approach can be implemented effectively, providing mid-sized organisations with valuable performance insight.”