Among reporting systems, the grandest of all are “balanced scorecard” projects, which measure compliance with business strategy. These have evolved over the years to combine strategy maps with balanced scorecards. Strategy maps define relationships among key business objectives, while scorecards measure progress towards those objectives.
The technology needed to build such systems is quite simple, and dozens of products support balanced scorecard projects. In practice, any decent reporting software can do the work.
What has this to do with a direct marketer? You may not be asked to pick the software for an enterprise balanced scorecard project, but the balanced scorecard approach is common. So, there’s a good chance somebody within marketing will propose a scorecard system or want to show how marketing has aligned itself with corporate objectives. If that somebody is you, you’ll need software to do the job.
Strategy Map, from Applied PC Systems Pty Ltd., offers a balanced scorecard system that provides extensive documentation and free tech support. Personal version: Free. Limit: one user and one small project. Enterprise: under $500 for unlimited use. (Note: Applied PC Systems is an Australian company, and not related to the Chicago-based firm.)
The price is right. And Strategy Map includes all the functionality you’ll need.
Begin by naming your plan and defining static components such as company name, vision, mission statement and elements of a SWOT (strength, weaknesses, opportunities, threats) analysis. These are simple text fields, but can be linked to external documents or Web URLs.
To create the strategy map, place boxes on a virtual canvas and link them with arrows. Per usual, the boxes are aligned on rows reflecting different types of objectives (called “perspectives”). You can call these anything, but the standard groups are financial, customer, internal processes and organizational capacity building. The lines indicate causal relationships.
Objectives created on the map are used in building the balanced scorecards. This is the critical link between the two concepts. Strategy Map enforces a tight connection by storing strategy map objectives in a list, and linking them to goals defined on scorecards for individual employees. These personal goals are linked with measures and scores. Measures can then be associated with one or more activities (called “initiatives”). Activities are where real work gets done: each has detailed attributes including date ranges and multiple budget lines. (The next version of the software, due this fall, adds monthly buckets for planned and actual income and expense for each activity. It automatically calculates profit.)
Strategy Map’s bottom-up approach of assigning goals to individuals is a departure from usual balanced-scorecard practice, which starts with enterprise-level goals “cascading” down through the organization. Assigning goals directly to individuals makes it easy to respond to any change in the organization. Goals automatically follow individuals when they are moved from one unit to another, or when the structure is reorganized. Strategy Map supports two levels of units within an organization and can aggregate individual goals and measures upward along the unit hierarchy. The system can also display scorecards for all employees within an organizational unit.
Strategy Map maintains lists of user-defined values for scorecard categories, such as personal goals, measures and scores, ensuring consistency across scorecards. This lets users change value names without editing each scorecard individually, and enables drill-down and cross-reference reports that show all instances of a particular value. While three categories of goals, measures and scores are typical, the 3.0 version of the system allows for up to six categories. These are arranged hierarchically within the scorecard – several scores could be assigned to one measure, and several measures assigned to one goal. With no constraints on the values across categories, any type of score could be assigned to any measure.
The scorecard displays in tree, Gantt chart or table formats. The relationships among categories are easily visible, particularly in the table format, which merges cells where appropriate. Along with list-based categories, users can add fields for text notes, document references and gauges. The system can export in Word, Excel, XML, HTML and other formats.
Unfortunately, the user interface is idiosyncratic. Instead of standard menu bars, icons and methods familiar to Windows users, Strategy Map employs alternatives that seem arbitrary and, sometimes, inferior. But the interface is usable once you get the hang of it; this is a speed bump, not a barricade. Given the overall value of the product, learning a few quirks is worth the effort.
