Comparative Study of Balanced Score Card vs COBIT 5

This paper compares the framework and effectiveness of Balanced Score Card and COBIT 5 in business management.

Running head: BALANCED SCORE CARD VS COBIT 5
Balanced scorecard vs COBIT 5
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1BALANCED SCORE CARD VS COBIT 5
Abstract
Control Objective s for Information is becoming very much popular nowadays because of its
comprehensive governance framework for IT but still the actual utilization and effectiveness
of the framework is not clear due to its various drawbacks. On the other hand companies are
looking for tool that can manage their business effectively and thus herein comes the
Balanced Score Card use. This paper studies about the framework of both the models and
finally a comparative study between the two is drawn which can open door for further
researches on business management.

2BALANCED SCORE CARD VS COBIT 5
Table of Contents
Introduction................................................................................................................................3
Balanced Score Card..................................................................................................................3
The relationship between Communication Strategy and the Balanced Score Card...................4
COBIT 5.....................................................................................................................................5
Comparative study of COBIT 5 and Balanced Score Card:......................................................5
Conclusion..................................................................................................................................7
References:.................................................................................................................................8

3BALANCED SCORE CARD VS COBIT 5
Introduction
This report deals with the comparative study of the Balanced Score Card with the
major IT frameworks. Among the various IT frameworks, the chosen framework for this
research is COBIT 5. The report will deal with the detail concept of a Balanced Scorecard
and its relationship with the communication strategy. A detailed framework of COBIT 5 will
hence be introduced, and the methods by which it utilises the balanced scorecard to manage
its enterprise activity will be discussed.
Balanced Score Card
Balanced Score Card is a series of cause and effect relationship that depicts how a
company intends to implement its intended strategies. It uses the commercial and non
commercial trials to evaluate enactment of an organization. A Balanced Score Card is
classified in two forms- the individual scorecards that comprises of measures to manage
performance where these type of scorecards are active having a more tactical intent (Hoque,
2014). As a vital administration system was initially defined as the serious features that
distinguish a BSC are its emphasis on the planned schedule of the organisation alarmed. An
IT balanced scorecard evaluates the performance of IT, and by measuring the evaluating
performance, the execution of activities can be improved and optimised. A balanced
scorecard manages the corporate industry breaks it into different projects, which are further
broken down into daily tasks (Hladchenko, 2015). It allows one to see how their everyday
work role will subsidize the organisation’s long term success.
A balanced scorecard has four perspectives not parted into silos of branches (Lueg,
2015).
Financial perspectives- Financial perspective starts from the top level economic ideas and
measures to withstand the shareholders.

4BALANCED SCORE CARD VS COBIT 5
Customer perspectives- it emphasizes on customer satisfaction and to gain their trust.
Internal courses perspective- assessing the quality and time of the process for the smooth
flow of the business.
Growth and learning perspectives- it is concerned not about only organization’s capabilities
but focuses more on the employee’s growth along with learning process to make them more
productive.
The relationship between Communication Strategy and the Balanced Score
Card
To implement an effective strategy in organisations, one of the most crucial roles of
the Balance Score Card is its communication. With the increased adoption of balanced
scorecard in organisations to support strategy with actions, the importance of effective
communication has become apparent. Successful implementation of BSC in an organisation
occurs when the stakeholders realise their roles. A balanced scorecard should allow everyone
in the company to understand the strategy to be implemented and not just remain confined to
only the top executives. It is the sole responsibility of the company’s higher authority to
communicate the implementation of the balanced scorecard in the company’s framework and
to explain its effectiveness to the subordinates so that each of them could know their
responsibility and promote in company’s long term growth.
Enunciating a tactical plan is correspondingly as important as generating it in the
primary place as the in-house and peripheral stakeholders may not comprehend the strategic
course from the Balanced Score Card. In a strategic management process, a strategy is first
developed then refined and finally becomes ready to communicate out to the internal and the

5BALANCED SCORE CARD VS COBIT 5
external members. Use of a simple communication matrix thus helps in communicating the
strategic plan established from the Balanced Score Card defining roles of each of the
audiences.
COBIT 5
Information is an progressively valuable resource in an organisation by which it
competes with other businesses by producing new services and products far better than their
rival ensuring proper use of information of the organisation (Bartens et al., 2015). COBIT 5 is
a universally recognised and broad business-focused structure that helps organisations to
utilize knowledge and technology along with governance and management framework for
enterprise IT (Nugroho, 2014). This is done by assisting organisations to generate optimal
assessment from their IT by preserving an equilibrium between realising welfares and
optimising risks and resource usage.
Comparative study of COBIT 5 and Balanced Score Card:
Purpose: COBIT 5 is an IT governance framework which helps in reducing the
business issues, risks and the control requirements (Labbad, 2014). Development of a clear
policy and a good practice in the IT firm is enabled in COBIT 5. COBIT has gained its
popularity as a governance tool as it focuses on the management tools used for managing
purpose (Mangalaraj, Singh & Taneja, 2014). On the other hand, Balance scorecard by its
definition is a performance management tool which allows business units to function
correctly and efficiently by enabling strategy implementation. A balanced scorecard helps in
achieving a better fit for an organisation providing a customised scorecard with a more
improved result.
Strengths: The strengths of COBIT includes improved auditing, guarantees
measurement of performance, creates values and manages risks. COBIT has gained its

6BALANCED SCORE CARD VS COBIT 5
importance, especially in financial organisations. With combination with the CMM COBIT
provides a maturity model reducing risks and ensuring proper accountability (De Haes et al.,
2016). BSC, on the other hand, has a more mixed performance; it can measure the
performance of an organisation only by using the key indicators, it can also maintain the
relationship between stakeholders and shares the strategic vision to the entire organisation.
Weakness: COBIT deals with all the activities, documents that are required to
represent IT governance but in some cases, it still lacks in controlling the objectives that are
needed to be mapped effectively and fails to align with the business requirements. The
maturity measurement model provided by COBIT is not arranged in a manner such that they
could be further aggregated into a comprehensive maturity level for the business unit
(Yudatama & Sarno, 2016). Also, the data supplied by COBIT are not that efficient and lacks
in providing guidelines for implementations. In comparison to the weaknesses of COBIT, the
BSC approach though provides compelling strategic management to an organisation is much
difficult to implement (Ramlaoui & Semma,2014). The use of the BSC model can lead to
disagreement between the top executives and the subordinates as communicating the strategy
of BSC is an essential factor here. Ineffective communication from the high most level can
cause poor motivation and conflict over the use of BSC.
Combining COBIT 5 with BSC:
The primary goal of COBIT lies in meeting the Stakeholders need and herein comes
the central role of BSC. The objectives defined by COBIT cascades to that of the principles
of BSC, and thus the balanced scorecard model is used as the framework for both performing
management work as well as governing the IT framework.

7BALANCED SCORE CARD VS COBIT 5
Conclusion
COBIT 5 is a holistic framework for any organisation which helps in improving the
governance of IT enterprises. By setting its goal and by utilizing the principles of BSC it can
be used for measuring performance as well as governing the enterprise model. The balanced
score card is thus a useful tool by which organization’s strategy can be renewed helping to
identify the possible flaws of the existing objectives.

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References:
Bartens, Y., De Haes, S., Lamoen, Y., Schulte, F., & Voss, S. (2015, January). On the way to
a minimum baseline in IT governance: using expert views for selective
implementation of COBIT 5. In System Sciences (HICSS), 2015 48th Hawaii
International Conference on (pp. 4554-4563). IEEE.
De Haes, S., Huygh, T., Joshi, A., & Van Grembergen, W. (2016). Adoption and impact of IT
governance and management practices: a COBIT 5 perspective. International Journal
of IT/Business Alignment and Governance (IJITBAG), 7(1), 50-72.
Hladchenko, M. (2015). Balanced Scorecard–a strategic management system of the higher
education institution. International Journal of Educational Management, 29(2), 167-
176.
Hoque, Z. (2014). 20 years of studies on the balanced scorecard: trends, accomplishments,
gaps and opportunities for future research. The British accounting review, 46(1), 33-
59.
Labbad, R. R. (2014). towards an abbreviated model of it governance for palestinian
government secvtor according to cobit 5 framework. towards an abbreviated model of
it governance for palestinian government secvtor according to cobit 5 framework.
Lueg, R. (2015). Strategy maps: the essential link between the balanced scorecard and
action. Journal of Business Strategy, 36(2), 34-40.
Mangalaraj, G., Singh, A., & Taneja, A. (2014). IT governance frameworks and COBIT-a
literature review.

9BALANCED SCORE CARD VS COBIT 5
Nugroho, H. (2014). CONCEPTUAL MODEL OF IT GOVERNANCE FOR HIGHER
EDUCATION BASED ON COBIT 5 FRAMEWORK. Journal of Theoretical &
Applied Information Technology, 60(2).
Ramlaoui, S., & Semma, A. (2014). Comparative study oComparative of COBIT with other
IT Governance Frameworks. International Journal of Computer Science Issues
(IJCSI), 11(6), 95.
Yudatama, U., & Sarno, R. (2016, January). Priority determination for higher education
strategic planning using balanced scorecard, FAHP and TOPSIS (Case study: XYZ
University). In IOP Conference Series: Materials Science and Engineering (Vol. 105,
No. 1, p. 012040). IOP Publishing.