Answered! What are the strengths and weaknesses of the BSC built at the bank? What pitfalls need to be avoided for a successful BSC project?…

• BSC takes a holistic (organizational-wide) view of performance
• It is related to the strategic planning and management of the company
• In the strategy map of BSC everybody can understand the cause and effect of logical mapping and direction towards the strategy objectives.
• It elaborates how the performance measures are going to be realized, hence, more concentration is given to the processes of designing the system
• BSC design processes starts with the articulation of a shared strategic vision specific to the organization, and backwards to define the priority strategic activities and outcomes that need to occur to achieve success.
• It represents the specific strategic issues of the organization.
• BSC focuses on only four business areas, planning, organizing, leading, and controlling, and within each area focuses only on the most important performance indicators

Weakness of BSC:

• The causality relationships between the areas of measurement in the BSC are unidirectional and too simplistic
• The BSC neglects the time dimension.
• The lack of the integration between top-levels and operational levels’ measures.
• the absence of the integration limits the use of BSC from the higher levels only
• BSC is incapable to answer the questions related to the competitors movements. Additionally, the BSC does not evaluate the significant changes in external conditions.

Pitfalls to avoid:

• Some high-level strategies such as financial targets, markets and customer segments, and aspirational brand and customer value positioning, may be too vague to translate well into a BSC.
• There are a lot of details and technicalities to putting a BSC in place, enough so that any organizations can get bogged down and confused.
• When metrics data collection requires too much effort, the job will fall by the wayside and so will results.
• A poorly structured metrics approach to monitoring scorecards is problematic