Question

A well-functioning M & E system is a critical part of good project/programme management and accountability. Timely and reliable M & E provides information to the Project Management Office. Critically examine the importance of monitoring and evaluation for the balance scorecard project at an organisation of your choice.

Answer 1

The Balanced Scorecard (BSC) is a planning and management system that is widely used in a variety of areas in the private and public sector, with the aim of ensuring that the activities of an organisation are in line with its vision and strategy, improving internal and external communications, and monitoring organization performance against strategic goals. The idea behind the original balanced scorecard was that it provided a performance measurement framework that added “strategic non-financial performance measures to traditional financial metrics to give managers and executives a more ‘balanced’ view of organisational performance” (Balanced Scorecard Institute, n.d.- a).

However, the BSC has developed over the years and the so called “new” balanced scorecard aims to transform an organization’s strategic plan from a passive tool into an active tool for an organization on a daily basis. In other words, the balanced scorecard will help planners to identify what should be done and how it should be measured:

The BSC enables organizations to clarify their vision and strategy, and translate them into action. At the same time it provides feedback regarding both the internal business processes and external outcomes in order to continuously improve strategic performance and results. (Balanced Scorecard Institute, n.d.- a)

The value of the BSC is that it transforms a strategy into a continuous process owned by every employee, not just top managers, and enables organizations to communicate high-level goals down through all levels such that employees not only know what to do, but also why they are doing it (Kaplan & Norton, 2004).

According to Kaplan & Norton (2004), what makes the balanced scorecard (BSC) special is that it:

1. Is a top-down reflection an organisations mission and strategy
2. Is forward looking
3. Integrates internal and external measures
4. Helps organisations to focus.

This method would be useful to RIS3, as it would allow the effects of specific strategies to be traced, determine how they are helpful or where they are lacking by implementing measurements to strategy objectives, based on the views of the stakeholders involved and customers affected, and improve on them in the future, in order to achieve a broader improvement in performance taking into account a wider framework that does not include financial performance.

However, it should be noted that there is a difference in approach between a private versus public balance scorecard (see “Description of the method”). Furthermore, there is also the Public Sector Scorecard (PSS), which has been developed from the due to the argument that the BSC still fails to measure important outcomes in the public and third sector organisations.

The mapping exercise showed that around 23% of selected regions have employed some elements of balanced scorecard in RIS3 monitoring and evaluation process. Among the most elaborate approaches would be Lower Austria, where the tailored balanced scorecard methodology ARISE was employed.