In the past companies measured their performance based on the growth or decline of corporate financials. Although this system provides an accurate appraisal of the viability and profitability of a company, it could not accurately measure several important factors that could have contributed to the growth or decline of a company. With the development of the balanced scorecard system, a comprehensive and all-sided view of company growth and performance can be made possible. This is because the balanced scorecard system measures company growth based on concrete metrics surrounding four key performance areas namely, customer management, business processes, corporate financials, and internal learning and growth. These perspectives are anchored on the company ‘s strategic goals and business objectives.
The implementation of balanced scorecard could result to improvement of performance on the key areas of concerns. In fact, balanced scorecard was implemented by many corporations and government agencies and the system actually boosted the capabilities of these entities to deliver products and services that are both viable and profitable. Significant growth has been reported by companies that implemented the balanced scorecard management methodology. Today, this management and performance measurement tool is becoming the most popular and practical methodology for all types of business or organizations. From big corporations having global operations to small and medium industries, the balanced scorecard system has been proven to work.
The reason for the success of balanced scorecard system is its simplicity and direct approach to solving problems. And because of these, companies can easily implement and scale the system based on their specific needs without major disruptions to their operations.