Saturday, June 14, 2014

Scoreboard vs. Dash board

 A scorecard assesses progress to strategic goals whereas a dashboard assesses performance to operational goals.

The balanced scorecard (BSC) is a strategy performance management tool - a semi-standard structured report, supported by design methods and automation tools, that can be used by managers to keep track of the execution of activities by the staff within their control and to monitor the consequences arising from these actions. In management information systems, a dashboard is "an easy to read, often single page, real-time user interface, showing a graphical presentation of the current status (snapshot) and historical trends of an organization’s key performance indicators to enable instantaneous and informed decisions to be made at a glance. (Wikipedia)

A scoreboard is strategic driven, and a dashboard is operation-oriented: A scorecard assesses the progress to strategic goals whereas a dashboard assesses performance to operational goals. Another difference, which has proved useful in application, is to think of scorecards as a way of consolidating and comparing (for cause and effect purposes) metrics relating to a holistic assessment of organizational or functional performance, whereas dashboards can be targeted at a single or small, but a related number of operational performance drivers.

A scoreboard is to provide the “balanced” view of trade-off variables; whereas dashboard tries to present key performance indicators in a visualized way: A balanced scoreboard is very useful for facilitating discussions and ensuring decision makers understand the various trade-offs. You also need to consider, among other things: the overall strategic balance, dependencies, and constraints between components, individual, and overall risk exposure. Dashboards and their associated means of data/information gathering and presentation are user selected, defined, structured, analyzed. In other words, it is a tool which is a part of a system for management. Management defines this system based upon their aim for the system (which comes from their values, principles, vision, strategies, and tactics). If the tool is misused and abused, don't blame the tool. Look to those who manage the system.

A balanced scoreboard is a strategic decision support system; whereas a dashboard is an operation support decision instrument: Balanced Scorecard (correctly and fully implemented and used), is nothing more than a strategic decision support system, allowing the most effective initiatives to be planned for achieving the corporate goals and the appropriate corrective actions to be taken upon those initiatives, when needed, in order to keep strategy execution on track. A Dashboard is a support decision instrument, gives instantaneous information about the organization's main drivers. It tries to present the information on a single screen/page with a simple, direct, intuitive and elegant graphical display. It uses design methods to convey the information efficiently, emphasizing what really is important, and guides the user through its reading, etc.

The balanced scoreboard is a concise report about strategy execution; a dashboard is often a one-page information which is easy to navigate and enable making a better decision: The characteristics of the balanced scorecard and its derivatives are the presentation of a mixture of financial and non-financial measures to a 'target' value within a single concise report. The feature of the dashboard is to display information that can be customized and categorized to meet a user’s specific needs. The feature of the scoreboard is to translate the vision and strategic planning into operational goals, and communicate strategy and link it to individual performance. It enables feedback & learning and adjusting the strategy accordingly. The features of an effective dashboard include: An intuitive graphical display that is well laid-out and easy to navigate; presents relevant KPIs and metric information to make decisions and act on them; uses a logical data structure that makes accessing current data easy and fast, and it should permit interaction between user and information (customize, segment, select, deepen, etc.)

The balanced scorecard is not a silver bullet - it's an operating system for the organization. And dashboard is also not a crystal ball, it’s a visual tool which helps decision making, As a consequence, scorecards and dashboards look quite different from each other, using traffic lights, graphs, tables etc. in distinct ways, but they are both useful management tools for strategy execution and performance optimization.


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