Benefits and Issues of Balance Scorecard in Commonwealth Bank of Australia

Strategic Performance
Measurement Systems
SPMSs

Contents
INTRODUCTION.......................................................................................................................................3
MAIN BODY..............................................................................................................................................3
1.The benefits of BSC in reaching strategic objectives of that bank........................................................3
2. The issues related to implementation of the BSC in that bank.............................................................5
3. Common barriers to successful scorecard implementation in the Financial Services sector in general.
.................................................................................................................................................................7
CONCLUSION...........................................................................................................................................8
REFERENCES..........................................................................................................................................10

INTRODUCTION
A system for strategic performance management can be described as a method utilizing
information to improve corporate culture, structures and processes positively. For policy
implementation, the Performance Measurement System is essential (Tan, Zhang and Khodaverdi,
2017). A defining characteristic of the SPMS is that it seeks to deliver financial and non-
financial metrics to management, presenting multiple viewpoints that integrate the plan with a
consistent range of success indicators. There are different kinds of tools in order to measure
performance of business entities and one of them is balance scorecard. The project report is
based on a bank that is Commonwealth bank of Australia. It is a multinational bank that works
across different nations. The report covers detailed information about benefits and drawbacks of
balance scorecard in financial entities.
MAIN BODY
1.The benefits of BSC in reaching strategic objectives of that bank.
The BSC is an effective tool of selecting a balanced collection of metrics and objectives which
represent the organization’s strategic direction and enable organizations to fulfill the needs of
their stakeholders and to identify, interact and assess their execution. In other words, balanced
scorecard is a policy performance monitoring method a quarter-standard, standardized report that
managers may use to track and control the implementation of their operations by their employees
(Cheowsuwan, 2016). This is useful for companies in order to achieve goals and objectives in a
planned manner. Such as in the aspect of above mentioned Commonwealth bank of Australia,
this can be helpful for reaching strategic objectives in such manner that are as follows:
 Better strategic planning- An important framework for building and communicating
strategy is given by the Balanced Scorecard. A Strategy Diagram visualizes the company
model and help managers learn about the cure-and-effect interactions between the
different strategic targets. The strategy map phase means that there is an agreement on a
range of interrelated strategic goals. In order to create a complete picture of the plan, the

outcomes and primary factors or drivers of potential achievement are established. In the
context of above bank, this can be helpful for making effective strategic plans which may
be used to achieve overall objectives in quick time and planned manner. Basically, it is
essential for business entities to prepare their strategic plans so that goals can be achieved
and it becomes possible be help of balanced scorecard.
 Better management information- The Balanced Scorecard methodology allows
companies to establish key metrics of success for their different strategic objectives. It
means that companies measure what matters practically. Analysis reveals that BSC
approach that companies prefer to provide improved knowledge on quality control and
decision-making helps in better circulation of information. Such as in the above
mentioned Commonwealth bank of Australia, it can be beneficial for their managers to
make effective way of communication of managing information among different
departments.
 Better organizational alignment- The Balanced Scorecard helps organizations to align
their corporate framework closer with the strategic objectives (Osati and Manouchehr,
2016). Organizations can insure that all company divisions and support services
collaborate towards the same priorities to implement a well-executed plan. To do that, the
introduction of the Balanced Scorecard and the relation of the plan to activities will
benefit. Such as in the aspect of above bank, they can make an effective alignment or
coordination among their various departments as well as among various branches located
at different nations. By doing so, they will be able to achieve their common goals in a
similar way and time frame. Thus, this is also a main objective of balance scorecard for
above mentioned Commonwealth bank of Australia.
 Enhanced performance reporting- The Balanced Scorecard can be used for leading report
and dashboard layout. Which means that the management analysis centers on crucial
business problems and facilitates organizations in tracking their plan implementation can
use this tool. Like in the above Commonwealth bank of Australia, by help of balance
scorecard way of presenting performance reports get enhanced which leads to
achievement of goals. It becomes possible because if performance reports will be
effective and efficient then this will be beneficial for internal stakeholders such as for