bsc-an implementation roadmap

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How to profit from the balancedscorecard

An implementation roadmap

Ali AssiriSchool of Management, The European Centre for TQM, University of Bradford,

Bradford, UK

Mohammed Zairi Bradford School of Management, The European Centre for TQM,

Bradford, UK, and

Riyad Eid

Wolverhampton Business School, Wolverhampton University,Wolverhampton, UK

Abstract

Purpose – The purpose of this paper is to identify a comprehensive set of potential determinantsinfluencing the successful implementation of balanced scorecard (BSC).

Design/methodology/approach – This research is an exploratory investigation into the BSCimplementation based on a holistic view. This includes: a comprehensive scrutiny of the relevantliterature; a comprehensive analysis of case studies of BSC implementations in organisationspresented in the literature; and an exploratory global survey of 103 organisations in 25 countries thathave already implemented or are in the process of implementing BSC.

Findings – The roadmap presented in this paper has been taken from a model proposed in the study.Themodel contained 27 critical success factors which are expected to influence the BSC implementation.The model divides those factors into three levels, namely dominant, main, and supporting factors.

Research limitations/implications – There is a need to empirically test and refine the proposedfactors, and explore relationships among the various variables by collecting data from organisationsthat have already implemented BSC.

Practical implications – The findings of this study are important and relevant to all the differentsized organisations in the different sectors and industries. This study also makes a significantcontribution to society in general.

Originality/value – Generally, the generic factors proposed by this study should enhance thecurrent practices of BSC implementation, which mostly follow narrowly-focused approaches. Inessence, the results of this research will help management in making crucial decisions and in resourceallocations that are required to make the BSC implementation a success.

Keywords Performance measures, Balanced scorecard, Critical success factors, Benchmarking, Surveys

Paper type Research paper

IntroductionMeasuring organisational success and implementing effective strategies for futuresuccess represent continuous challenges for managers, researchers and consultants.

The current issue and full text archive of this journal is available at

www.emeraldinsight.com/0263-5577.htm

The authors sincerely thank the editor and the anonymous IMDS reviewers for their constructiveand valuable comments and suggestions.

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Industrial Management & Data

Systems

Vol. 106 No. 7, 2006

pp. 937-952

q Emerald Group Publishing Limited

0263-5577

DOI 10.1108/02635570610688869


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Whilst financial measures are clearly important, new frameworks have emerged inrecent years that take into account a broader range of measures. These frameworksaim to respond to the criticisms levelled at financial measures, namely that they areone-dimensional and that they are inherently backward-looking in that they record a

“history of a firm” (Chakravarthy, 1986; Evans, 2005; Rao, 2006). Recognisingrelevance lost in the performance measures of the traditional management, Kaplan andNorton (1992, 1996a, b) developed the theory of the balanced scorecard (BSC) as anapproach to integrating financial and non-financial measures into management in thehyper-competitive environment.

BSC approach has gained wide acceptance, particularly in the USA. A survey of itsmembers by the American Institute of Public Accountants and Maisel (2001) revealedthat 43 per cent were utilising the technique. This is due perhaps not only to itsintrinsic value to businesses, but also because the concept has been aggressivelymarketed. For more than a decade now, diverse organisations around the world(manufacturing and service, private sector and public sector, for profit andnot-for-profit) have used that BSC to achieve performance breakthroughs throughfocused and effective strategy execution (Kaplan, 2005).

However, a recent trend in evaluation is the increasing emphasis on the intangible,qualitative and non-financial sides of the companies. Although financial earnings arestill an important indicator of valuation, more and more empirical evidence suggeststhat the returns-earnings relation has declined over decades (Brown et al., 1999; Huanget al., 2006; Wang, 2005). Recognising relevance lost in the performance measures of thetraditional management, Kaplan and Norton (1992, 1996a, b) developed the theory of the BSC as an approach to integrating financial and non-financial measures intomanagement in the hyper-competitive environment. An important preliminary stepprior to choosing the scorecard goals and measures is to “map” the strategy in detail, aprocess that Kaplan and Norton (2001) describe in some detail. A typical scorecard

would include at least four perspectives, namely financial, customers, internalprocesses, and learning and growth, for each of which the organisation has to identify anumber of goals and measures for gauging the degree of goal attainment.

In fact the literature review undertaken revealed a lack of research with regard tosome critical factors of BSC implementation (e.g. stimulate culture, executive andmanager sponsorship), and this could be due to the fact that these factors are related toany new project, not particularly to BSC system implementation only. This study istherefore an exploratory investigation into the BSC implementation based on a holisticview. Through a detailed analysis of the literature, using a global survey of 103 firmsin 25 countries that have already implemented or are in the process of implementingBSC, this paper identifies a BSC implantation roadmap in three levels, namelydominant factors, main factors, and supporting factors.

Literature reviewBSC presents a tool for translating an organisation’s mission (embodied in its strategy)into more tangible measurable goals, actions and performance measures. The techniqueis documented by Kaplan (2005, 1996, 1994) and was derived following the realisationthat no single performance indicator could fully capture the complexity of anorganisation’s performance (Epstein and Manzoni, 1998). However, the BSC approach,which can be applied at different levels (total organisation, strategic business unit,

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(organisations in Malaysia, South Korea, Japan, Philippine, Singapore, and Taiwan),19.4 per cent from the USA 9.7 per cent from Africa (organisations in South Africa andEgypt), and only 2.9 per cent from other countries (Australia and New Zealand).

The sample can be described as follows: a majority of the respondents were

involved on BSC implementation (60.2 per cent), nearly half (51.5 per cent) of therespondents had implemented BSC from 1 to 3 years, 23.3 per cent for less than 1 year,followed by 22.3 per cent of respondents where BSC had been implemented from 4 to6 years. In terms of industry sector, the majority of respondents (36.9 per cent) werefrom the manufacturing sector, followed by financial and energy sectors (14.6 per cent),the retail sector was (8.7 per cent), followed by consulting, transportation andeducation sectors (6.8, 5.8 and 3.9 per cent, respectively), and the lowest responses camefrom telecommunications, distribution, and healthcare sectors, with 2.9 per cent for allof them. With respect to size of organisations, the majority of respondent organisationshad 10,001-50,000 employees (33 per cent), followed by those employing 1,001-5,000(17.5 per cent), third are those organisations with 5,001-10,000 and 501-1,000, with15.5 per cent for each and organisations employing over 50,000, 101-500, and 100 or

fewer had the lowest responses rate with 7.8, 5.8 and 4.9 per cent, respectively. Finally,the majority of respondents are senior managers representing 40 per cent of allrespondents, followed by executive managers with 26.5per cent, 21.6 per cent of therespondents are managers, whereas only 10.7 per cent are supervisors.

To ensure that the valid responses were representatives of the larger population, anon-response bias test was used to compare the early and late replies. However,response bias occurs when the observed value deviates from the population parameterdue to differences between respondents at the early and later stages of the survey.x

2 tests show no significant difference between the two groups of respondents at the5 per cent significance level, implying that a non-response bias is not a concern.

Analysis and results Road map of BSC implementationThe roadmap presented in this paper has been taken from a model proposed in thestudy. The model contained 27 critical success factors (CSFs) which are expected toinfluence the BSC implementation. The model divides those factors into three levels,namely dominant, main, and supporting factors. The following sections will give abrief idea about each level with a detailed roadmap for the implementation.

Dominant factors. Dominant factors are those expected to play a significant role inBSC implementation. Dominant factors are those without which the BSC finds it hardto be implemented, namely executives’ and senior managers’ commitment, BSC team,and identifying adequate BSC perspectives. Table I shows that those factors representa considerable level of criticality, and were rated above 4.0 on a 1-5 likert scale and

ranked from 1 to 3.

Factor Mean Rank

Identify BSC perspectives 4.2337 1BSC team 4.0453 2Executives’ and senior managers’ commitment 4.0114 3

Table I.Dominant factors meansand ranks

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No project can be successful without executive support and commitment. Managersshould give necessary priority to BSC implementation to gain internal commitment.Moreover, their commitment and support does not end with initiation and facilitation,but must extend to the full implementation of BSC. They must be involved at every

step of the project and show their commitment in the project. Table II presents animplementation guidelines “checklist” that may help executives and senior managersto ensure their commitment to BSC project.

However, creating a BSC team is critical for successful building and implementationof the BSC. Consequently, top management have to identify the best people in theorganisation, organise them into an interdisciplinary team, and empower them forresponsibilities in the BSC project. Table II presents implementation guidelines“checklist” that may help to appoint BSC team and guide them to the accurate practicefor a BSC project.

Identifying the adequate BSC perspectives is crucial for success of BSCimplementation. As mentioned previously, Kaplan and Norton’s four perspectives

have been found to be appropriate for most companies and industries. However, the fourperspectives have to be considered as a template. Therefore, the choice of perspectives

Identification of BSC perspectives Choosing perspectives that suit organisations’requirements, strategy, and objectivesBSC perspectives adequately capture focus of organisation’s strategy and provide balance betweenfinancial and non-financial measuresBetween 3 and 5 perspectivesBSC perspectives cover all aspects and activities of organisation

Executives’ and seni or managers’ commitment Executives and senior managers assume activeresponsibility for BSC implementation

Visibility of executives’ and senior managers’commitment to BSC activitiesExecutives and senior managers allocate adequateresources and time for BSC projectInvolvement of top and middle level managers inBSC developmentTop management discuss many BSC issues duringtheir meetings

BSC team Special team has approved for the BSC projectBSC team members have various skills, knowledgeand are from different departmentsBSC team visible and has access to top managementTraining for BSC team in BSC implementation andperformance measurementFrequent and regular meetings for team to discussBSC issuesTeam member has a very detail understanding of functional areaTeam member can gather and analyse detail data forclear communication to othersTeam member can comprehend strategic issues andconnect issue to his/her job

Table II.Implementation

guidelines for dominantfactors of BSC (checklist)


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for the organisation’s BSC has to be according to what is necessary to execute thestrategy and create a competitive advantage for the organisation. Table II presents animplementation guidelines “checklist” that may assist the organisation to select thesuitable BSC perspectives.

Main factorsMain factors are less critical than the dominant factors. Main factors are important ineach step of a BSC project. They contain 19 CSFs (Table III) which have been subdividedinto six categories: learning and innovation, planning, development, implementation,sustainability and benefits realisation, each of which contains a number of criticalfactors (Table III). Table III also shows that main factors representing a considerablelevel of criticality were rated between 3.6 and 3.99 and ranked from 4 to 22.

The first main factor is mission, values, vision, and strategy. Any organisationintending to implement BSC has to have clear mission, values, vision, and strategy inplace. It is well known that the BSC mainly concerns the implementation of already

planned strategies, it translates the organisation mission, values, vision, and strategyinto performance objectives, and measures them in each of the BSC perspectives.Table IV presents an implementation guidelines “checklist” for this factor in a BSCproject.

Table III shows that the second main factor is training. As discussed previously, theBSC is essentially a new approach for organisation. It is about adopting new perspectivesand processes, and about innovation and change. Consequently, employees’ training andeducation initiatives may help facilitate this change by providing employees with the

Factor Group Meana CSFs rank

Mission, values, vision, strategy DSF

c

3.9924 4Training DSF 3.9495 5Automating BSC SSF 3.8897 6Set objectives and measures DSF 3.8810 7KPIs DSF 3.8529 8Rolling out implementation plan ISFd 3.8419 9Updating BSC measures and linking it with rewards SSFe 3.8163 10Regular reporting BSF 3.7737 11Communicate BSC PSFb 3.7328 12Cascading BSC ISF 3.6990 13Initial plan PSF 3.6850 14Corporate alignment SSF 3.6767 15Learning and innovation LSFf 3.6732 16Information system design ISF 3.6731 17

Measurements assessment BSFg

3.6600 18Benchmarking SSF 3.6436 19Cause-and-effect linkage DSF 3.6333 20Stimulate culture PSF 3.6214 21Problem solving and action planning BSF 3.6106 22

Notes: aMean is based on the five point Likert scale; b(PSF) planning stage factors; c(DSF) designstage factors; d(ISF) implementation stage factors; e(SSF) sustainability stage factors; f (LSF) learningand innovation stage factors; g (BSF) benefits and realisation stage factors

Table III.Main factors means andranks

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Mission, values, vision, strategy Organisation has a clear mission, values, vision and strategyEntire workforce understand and is committed to mission, vision,values, and strategy

Organisation’s BSC supports vision statementBSC communicated strategy throughout organisationOrganisation clarifies and translates vision and strategy inoperational termsStrategy aligned to, and driven by CSFs and balanced set of performance measures

Training Emphasis placed on skills development and training in organisationKnowledge and skills developed, consistently, to meet changingneeds of BSC implementation, teams and individualsLinking Education and Training of employees to organisationlong-term plans and strategiesTop management arranges adequate resources for employeeeducation and trainingTraining for BSC team and employees in performance

measurement and BSC implementation and other technical skillsAutomating BSC Choosing adequate software for BSC implementation that achieves

organisation requirementsAll the results automatically sent to right employees at right timeand in right frameBSC software integrated with other softwareRegular maintenance and updating for BSC software

Set objectives and measures Before implementing BSC key objectives have to be identifiedInitiatives and measures derived form strategyEach department has to create own performance objectives andmeasuresBetween 3 and 5 measures for each BSC perspectivesBetween 20 and 30 measures for whole BSCWell-balanced set of financial, non-financial, lagging and leading

measures representing all parts of organisationBSC measures are regularly discussed in management meetingsWritten documented definitions for BSC measures

KPIs Establishing relative importance of KPIs before implementing BSCRelative weights and appropriate “balance” among KPIsdetermined before implementing the BSCActions and objectives supported by KPIs

Rolling out implementation plan Developing comprehensive implementation plan for BSCBSC comprehensive implementation plan divided into subgroupsLeader for each subgroup appointed, and responsibilities assignedUsing the top-down approachDeveloping clear communication between top-level and shop floor

Updating BSC measures and

linking it with rewards

Measures re-visited and re-defined on regular basis

Measures re-visited to confirm continued relevanceUpdating BSC measures at least once a yearLinking compensation and rewards to BSC measures results

Regular reporting BSC deliver to top management and employees on regular baseInformation of BSC reaches right people, in right format, at theright time and in right quantityResult of BSC measures incorporated into regular reporting systemUsing BSC feedback to adjust strategic planduring operating period

( continued )

Table IV.Implementation

guidelines for mainfactors of BSC (checklist)


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Communicate BSC BSC is communicated throughout organisation from top to lowlevelProviding commentary and written guidelines for users of scorecard

Employees well-informed about BSC developmentcontinuouslyStrong communication system between departmentsUsing various communication devices is begin BSC project, such asexecutive announcements, videos, town meetings, brochures, andnewsletters

Cascading BSC Using top-down approachLinking objectives from executive level down to lower businesslevel, ensuring everyone working towards common goalsCommunicating BSC to every level of organisation and comparingcurrent performance with past results

Initial plan Prepare initial plan for BSC development and implementationIdentification of sources of performance data beforeimplementationIdentification of critical processes that should be excelled at inorder to meet objectives of shareholders and of targeted customersegments

Corporate alignment Identifying key strategic initiatives to achieve objectives, andallocating resources appropriatelyAlignment of tangible and intangible assets with strategyBSC measures works in congruence with organisation’s strategicobjectives

Learning and innovation Strategic feedback system in placePerformance appraisal system encourages learning and innovationExistence of learning environment encourages people to innovateand share best practice and knowledgeEncouraging employees to voice opinions, criticisms and feedback

on organisational functioning and performanceInformation system design Information system communicating BSC requirements and bestpractice indicatorsTechnology is strategy planned and utilised to improvecommunication and access to services for customers andstakeholdersBSC team actively gathers, integrates, and communicatesinformation critical to implementation and practiceof BSC

Measurements assessment Measures assessed according to BSC resultsReviewing measures frequently and identifying right combinationof measures

Benchmarking Benchmarking made against primary competitorsInformal benchmarking and other forms of information

sharing with organisations in different sectors and industriesto identify best practices for improvements andopportunitiesTargets stretched according to external benchmarking

Cause-and-effect linkage Establishing relationships and linkages between KPIsBSC support relationship definition to provide cause and effectmodelling

( continued )Table IV.

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knowledge andskills they require to adapt to and to lead this changeprocess.However, the

target of training should includethe BSCteam,the role employees play in exercising sound

business judgement, and the specific techniques for implementing BSC. Table IV presents

an implementation guidelines “checklist” for this factor in a BSC project.

Automation is crucial for BSC implementation success. BSC automation may enable

a quicker culture change, provide visibility to the BSC process, and facilitate

participation by a wider audience. Therefore, organisations should automate their BSC

and choose the most appropriate software. However, there is a lot of BSC software

available in the market (SEM BSC, Oracle BSC, SPImact BSC, BSC Analytic App.,

Corporater BSC and Comshare MPC are just examples of these software) but thequestion is which one is more adequate? Marr and Neely (2003) identify ten selection

criteria which organisations should discuss when choosing BSC software, namely

company and product, scalability, flexibility and customisation, features and

functions, communication, technical specifications, /data presentation, analysis

functionality, service, and future. Table IV presents an implementation guidelines

“checklist” for this factor in a BSC project. The fourth main factor is setting objectives

and measures for BSC. Each department has to set its objectives and measures, and

then these have to be agreed by top management and the BSC team. However, all

objectives and measures have to be derived from the organisation strategy. Table IV

presents an implementation guidelines “checklist” for this factor in a BSC project.

The fifth main factor is key performance indicators (KPIs). BSC translates anorganisation’s strategy into a comprehensive set of KPIs. These KPIs measure

performance-linked corporate goals by tracking performance across the BSC

perspectives. By demonstrating the cause-and-effect relationships between KPIs, the

BSC provides managers with an obvious understanding of how their decisions impact

not only on their direct area of responsibility, but also on other departments and the

overall organisation strategy. Table IV presents an implementation guidelines

“checklist” for this factor in a BSC project.

Cause and effect relationships between data elements are lookedinto to ensure resources are being correctly allocated

Stimulate culture Stimulating employees’ culture for BSC implementation byincreasing education in performance measurements

Shifting managers’ efforts from single-minded focus ongrowth/financial figures to broader set of objectives thatencompass profitability and non-financial performanceConvince employees that BSC measures exist to evaluate andimprove their performance, not to blame them

Problem solving and actionplanning

Problem solving and continuous improvement processes, based onBSC results, facts and systematic analysisTeam approach in problem-solving and continuous improvementEmployees empowered to resolve problems and improve processesEncouraging culture of teamwork and problem solvingAction taken as a result of measurement activitiesMeasurement results used to drive decision making throughoutorganisationManagement regularly checks that actions related to achievementof BSC targets are taken Table IV.


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Implementing a new system or project such as BSC may bring a significant changein the way employees view their job, therefore it is important to ensure that everyone isinvolved at every level of the organisation by rolling out the BSC between the differentlevels of the organisation. Table IV presents an implementation guidelines “checklist”

for this factor in a BSC project. As can be seen in Table III, the seventh main factor isupdating BSC and linking it with rewards. Kaplan and Norton (1996a) believe that therewards of executives and managers have to be tied with the results of BSC measures.These rewards can be divided into extrinsic and intrinsic. The BSC team has to expecta number of changes in the measures of each perspective. Even the organisationalstrategy may require to be changed, due to sudden changes in internal or externalcircumstances. Therefore, the performance measures have to be updated according tonew circumstances. Despite changes of circumstances, the measures should, however,be evaluated and reviewed at least once a year in conjunction with the organisationplanning. In addition, to strengthen the BSC implementation, the reward of executivesand managers has to be tied with the results of BSC measures. Table IV presents animplementation guidelines “checklist” for this factor in a BSC project.

One potential benefit of BSC implementation is a clear system for regular reporting.The BSC has become a commonly practised and popular management reportingmethod in recent times. The BSC may also enable organisations to integrate all aspectsof the management information system, and it can have a consequence on howmanagers think about their business and how they invest their time and resources.Table IV presents an implementation guidelines “checklist” for this factor in a BSCproject. Table III shows that the ninth main factor is Communicating BSC. Theorganisation has to set a comprehensive and sustained plan to communicate the BSC toits employees. The communication plan should not only be comprehensive but alsoperiodic. However, how often the communication plans should be updated depends onthe levels of the organisation. For example, Kaplan and Norton (1996c) suggest that

organisations could have a quarterly plan at the corporate level, monthly plan at thedirectors level and finally, an as needed plan at the support groups level. Variouscommunication devices can be also used to begin the BSC project such as executiveannouncements, videos, town meetings, brochures and newsletters. Table IV presentsan implementation guidelines “checklist” for this factor in a BSC project.

The BSC objectives and measures have to be cascaded from the top to the bottom of the organisation. The organisation starts its BSC by identifying the strategic objectivesin the upper level of the organisation, and then cascading to the lower leveldepartments to determine their achievements and contribution to overall goals.Table IV presents an implementation guidelines “checklist” for this factor in a BSCproject. The eleventh main factor is developing and initial plan for BSC. As mentionedearlier, BSC plans vary from one organisation to another. Many organisations prefer to

set a comprehensive and detailed plan. These organisations usually use the MicrosoftProject system to facilitate this. Other organisations choose to start with a simple planthat might be easy to follow. Simple plans usually contain critical tasks and use MSExcel or Word document systems.

Corporate alignment is very important for BSC implementation success. Bothintangible and tangibles have to be aligned with strategy in order to create value.Table III indicates that designing of an adequate information system is a mainfactor of BSC success. As discussed earlier, if any unexpected rustle is given by

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the BSC, managers need access to underlying data to explore the cause of anyproblem or analyse trend and correlations. If the information system is inadequate,however, it can considerably affect the effectiveness of the BSC. Table IV presentsan implementation guidelines “checklist” for this factor in a BSC project.

Benchmarking is considered as one of the CSFs of BSC implementation. It hasbeen adressed through benchmarking studies, and for the purpose of this researchwe define benchmarking as “an ongoing process of measuring and improvingproducts, services and practices against the best that can be identified worldwide”(McGaughey, 2002). It includes the application of the skill of comparison – comparing one’s own performance of a particular strategy, task or operation withthat of others, and provides an objective analysis of how successful is anorganisation’s performance by adopting a systematic measurement process of theimprovement (Shen et al., 2003). It is widely believed that competition provides animpetus for improvements and benchmarking is a powerful tool for continuousimprovement (Leem and Kim, 2004; Zairi, 1998). To this end a best practicebenchmarking approach has been adopted by this research to examine BSC intoday’s successful companies (Eid et al., 2002; Eid and Trueman, 2004).

The BSC may use benchmarking information to set targets. Benchmarking can beused to incorporate existing best practice and to confirm that internally proposedtargets will not keep the business unit trailing in strategic measures. Consequently, theorganisation should stretch its targets according to those targets of best-in-class.Table IV presents an implementation guidelines “checklist” for this factor in a BSCproject. As shown in Table III, BSC measures have to be determined according tocause-and-effect linkage. The well-designed BSC illustrates the organisation’s strategythrough the objectives and measures that have been chosen. These measures shouldlink together in a chain of cause-and-effect relationships. Table IV presents animplementation guidelines “checklist” for this factor in a BSC project.

As indicated by Table III, culture stimulating is another main factor of BSCimplementation. It is well known that culture is a crucial element to be prepared beforeimplementing any new system in an organisation. All organisation levels have to beprepared prior to introducing the BSC, starting at the top and permeating throughoutthe whole organisation. All levels should be aware of the significance of the BSC and itsfuture benefits. Organisations need to create, therefore, a culture where all employeescan participate and be involved in the BSC programmes relevant to their workplace.Table IV presents an implementation guidelines “checklist” for this factor in a BSCproject.

Finally, BSC may help to solve various problems and provide the organisation withaction planning. As mentioned earlier, BSC measures can enhance problem-solvingand team-communication processes in numerous ways, including development of a

common understanding of the problem, signifying that a solution has been found, andtesting potential solutions. The BSC, however, enables the organisation to focus itsefforts on those critical processes. Table IV presents an implementation guidelines“checklist” for this factor in a BSC project.

Supporting factorsSupporting factors are those factors with less criticality than dominant and mainfactors of BSC implementation. However, these factors are significant to support the


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latter. They include integration, self-assessment, finalise BSC plan, finalise measures,and fine tuning and refining. Supporting factors were rated less than 3.6, and rankedfrom 23 to 27 (Table V).

Integration is the first supporting factor in BSC implementation. Consequently, the

BSC must be integrated in the management system. In spite of the BSC strengths, itcannot stand alone. Table VI presents an implementation guidelines “checklist” for thisfactor in a BSC project.

The second supporting factor is self-assessment. As mentioned previously,combining BSC and self-assessment models may increase the ability of theorganisation. In addition, the BSC and the excellence models can be usedinteractively with the strengths and weaknesses recognised in EFQM assessments

Factor Mean Rank from total CSFs

Integration 3.5833 23Self assessment 3.5468 24

Finalise measures 3.5297 25Fine tuning and refining 3.3993 26Finalise BSC plan 3.3299 27

Table V.Supporting factors meansand ranks

Integration BSC integrated into strategic management systemIntegration of BSC automation software with internet and email toshare analysis and resultsProcess of goal deployment and performance improvement linked toperformance appraisal as integrated system

Self-assessment Implementing self-assessment frequentlyUse of self-assessment tools and other mechanisms to track and

improve performance gaps in implementation and effectiveness of systems, processes and practicesRecognising weakness in activities and improving it

Finalise measures Before implementing BSC, measures reviewed and finalisedCustomers involved in establishing objectives and measures forcustomer perspectiveOrganisation selects correct performance measures for assessingdesired performance

Fine tuning and refining BSC communicated to every level of organisation and comparescurrent performance with past resultsOrganisation’s measures have been refined according to BSC reportingresultsResults of organisation measures reflect understandable causal

relationship between performance effort and performance resultFinalise BSC plan Measures have direct link to strategyOrganisation calculates costs and benefits of its measures collectionBSC team or employees are able to explain both operational andstrategic significance of every measureMeasures accurately depict the process or objectives it is attempting toevaluateOrganisation specifies precise meaning of its performance measuresand ensures that it has agreement with BSC team

Table VI.Implementationguidelines for thesupporting factors of BSC(checklist)

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(as part of a strategic appraisal or performance checkpoint process) focused andprioritised through the strategic direction of the BSC. Table VI presents animplementation guidelines “checklist” for this factor in a BSC project.

Finalising BSC measures is also one of the supporting factors of BSC. The BSC

team has to narrow the measures and choose those that may help the organisationto execute its strategy. In general, the organisation has to be aware of the numberof measures chosen. The key to determining the organisation’s BSC measures,however, is ensuring an adequate description of the organisation’s strategythrough its BSC perspectives. In addition, finalising the BSC plan is crucial aswell. Table VI presents an implementation guidelines “checklist” for this factor ina BSC project.

BSC systems have to be integrated into the organisation’s management systems tocreate value. Therefore, the BSC comprehensive plan has to be finalised by the topmanagement and the BSC team to ensure that all BSC requirements exist in the plan.Table VI presents an implementation guidelines “checklist” for this factor in a BSCproject.

Discussion and conclusionThe findings of this study are important and relevant to all the different sizedorganisations in the different sectors and industries. This study also makes asignificant contribution to our society in general.

It has provided an insight into the various principles and techniques of a successfulBSC implementation. Despite the increasing reputation of BSC, its implementation isstill complex. Consequently, this study has recognised a series of critical issues thatmust be carefully considered to ensure successful implementation. Furthermore,adhering to the various levels of application of BSC factors will ensure thatorganisations can derive maximum benefits.

Generally, the generic factors proposed by this study should enhance the currentpractices of BSC implementation, which mostly follow narrowly-focused approaches.In essence, the results of this research will help management in making crucialdecisions and in resource allocations that are required to make the BSC implementationa success.

The paper presents a roadmap for BSC implementation. The key findings andanalysis of data were derived from integration of three different data sources:survey questionnaire, primary case studies, and secondary case studies. Theinterpretations of the results have been guided by scrutiny of previous empiricalstudies in relevant literature review. Moreover, the paper has identified a series of critical factors that must be carefully considered to ensure successfulimplementation of BSC. Those factors have been divided into three levels:

dominant, main, and supporting factors. In addition, when constructing the BSCimplementation model, consideration must be given to structuring it to be aspractical as possible. Such an objective is best achieved by presenting thecomponents of the model in the form of implementation guidelines, with the criticalBSC factors superposed as a useful “checklist”.

The roadmap is primarily based on the findings of the quantitative and qualitativestudies conducted by the authors among organisations throughout the world withexperience in BSC implementation. The roadmap is expected to be useful to a wide


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range of organisations, since it provides for a BSC implementation plan to suit anybusiness situation.

Limitations and suggestions for future researchAs the number of various organisations implementing BSC continues to grow, furtherresearch is needed to expand the findings from this study and to provide moreconclusive answers. Despite its attempt to be exhaustive and cover a broad area of research, there are many areas in which future research is needed.

However, as with any study, there are certain limitations that should be recognized.First, there is a need to empirically testing and refining the proposed factors, andexploring relationships among the various variables by collecting data fromorganisations that have already implemented BSC.

Second, the CSFs also calls for a micro type of research, where each component isexamined through exploratory studies that can provide better understanding of theinternal working of their elements, and the mechanisms by which the role of each inBSC implementation and effectiveness can be improved.

Third, as mentioned earlier, the study did not verify similarities and differencesbetween organisation sizes. Therefore, further studies may be necessary dependingupon the size of organisations, namely large, medium, and small, to discover anyexpected differences in BSC implementation.

Fourth, one of this study’s findings is that there are no differences in BSCimplementation in the different countries worldwide. However, further studies may berequired to further investigate this result in terms of developed and developingcountries.

Fifth, the sample has been confined to all organisations which implemented BSC,regardless of type of business or company size. A research sample taking each

business individually would provide a further valuable contribution to the findings of this study.

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Further reading

Kaplan, R.S. and Norton, D.P. (1997), “Why does business need a balanced scorecard?”, Journal of Cost Management , Vol. 11(ER), pp. 5-11.

Kaplan, R.S. and Norton, D.P. (2005), “The balanced scorecard: measures that drive

performance”, Harvard Business Review, Vol. 83, pp. 172-80.

Corresponding authorRiyad Eid can be contacted at: [email protected]

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