Use of Balanced Scorecard in Information Technology

Strategic management accounting
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Contents
Introduction.................................................................................................................................................3
Use of Balance Scorecard and its development in information technology................................................3
Explanation of the Balanced Scorecard (BSC) and a brief Summary of its Origin....................................3
Reviewing Literature on BSC usefulness in information technology........................................................4
Outlining the key Issues and Findings Identified during Literature Review.............................................6
References...................................................................................................................................................8
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Introduction
The increasing competition within the business environment is causing the firms to adopt
the use of innovative methods for performance measurement. This is because the traditional
methods of performance measurement are not able to provide accurate information to the
businesses for taking right decisions regarding their sustained growth and development. The
businesses, as such, are largely emphasizing on the use of transparent performance measurement
systems such as Activity based Costing (ABC) and Balanced Scorecard (BSC) for enhancing the
reliability of data to improve the decision-making process. The use of ABC system along with
BSC is providing to be a highly efficient tool for business managers to gather information for
analyzing the business performance. The implementation of these strategic tools and systems
enables the business managers to develop adequate strategic aims and objectives for promoting
the business growth. The IT industry is increasingly using the management tool of BSC for
developing the strategic goals and improving the business growth and development. In this
context, the present paper attempts to review the literature in relation to the Balanced Scorecard
and its contribution in developing information technology.
Use of Balance Scorecard and its development in information technology
Explanation of the Balanced Scorecard (BSC) and a brief Summary of its Origin
Kaplan and Norton have introduced the Balanced Scorecard (BSC) in the year 1992 for
enabling the companies to measure the performance and thus identifying adequately the issues in
context for overcoming them. It measures the progress achieved by an organization for attaining
its strategic goals and objectives by analyzing its performance on the basis of four perspectives
that are, internal learning, business processes, customer analysis and knowledge and innovation.
The BSC can be described as a strategic management tool that enables the stakeholders to assess
the progress towards achievement of the strategic goals. The BSC along with its four different
perspectives can be depicted as follows:
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