Does the Balanced Scorecard Dashboard Really Exist?

Oct 6
07:44

2008

Sam Miller

Sam Miller

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Many people think that the balanced scorecard dashboard exists. This is not true at all because the balanced scorecard and the dashboard are distinct from each other.

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So many people make the mistake of thinking that the balanced scorecard and the dashboard are similar in terms of purpose and function. Some people even think that there is such a thing as the balanced scorecard dashboard. In essence,Does the Balanced Scorecard Dashboard Really Exist? Articles this common misassumption has certainly caused much confusion in the arena. Simply put, scorecards and dashboards actually serve different purposes. Yes, a lot of people use these terms interchangeably, which should not be the case at all. Each of these terms actually has different capabilities to their names.

But why the confusion? There are so many reasons circling the common act of confusing both balanced scorecards and dashboards. Firstly, both of these tools give you methods to track accurate results. With this purpose in mind, it is already easy enough to mistake one for the other. Secondly, both tools make use of dials, traffic lights, sliders, and other types of visual aids for the representation of their data. Both also have thresholds, alert messages, and targets to keep in mind. Lastly, both come with linkages and are used to drill down onto other reports and metrics being used by the company for related purposes.

The difference lies in the context as to how the tools are applied. Back in the day, managers and executives have already been dealing with so much information being thrown at them. All sorts of information would just be given at them to deal with, from sales reports and production to marketing and logistics. This was precisely why traffic lighting was conceptualized, wherein virtually all sorts of reporting then made use of this concept.

The balanced scorecard is meant to be strategic. The tool is used to align and direct the proper behavior both employees and employers should emulate while keeping in mind strategic goals and objectives that have once been formulated by the members of the company’s executive team. Dashboards, on the other hand, are meant to be operational in nature. Dashboards exist for clearer data visualization. Your dashboard can easily give you a vivid representation of what is going on in the company during a certain period of time. Most of the time, organizations start by identifying what are the things that are already being measured and from there, a dashboard dial is then constructed. The drawback here is that dashboards do not really explain why certain things being measured really matter. They do not really explain why the company should give importance to a certain reported measure or the probable impacts or effects there may be, should a declining measure of an undesirable nature continue.

It is actually the scorecard that can do this – providing the information that dashboards are not capable of giving. A more in-depth analysis comes with the scorecard, as well as drill-down abilities, forecasting performance potential for the determination of motivational targets, and traffic light alert messaging. The balanced scorecard does not really begin with data that already exists, unlike the dashboard. The scorecard starts with the identification of strategic projects that the company can complete and the very core processes the company needs to improve on as well as excel in.

With this basic difference outlined, it is clearly fallacious to think that there is such a thing as a balanced scorecard dashboard. The basic differences should then be kept in mind.