BSC and Project Management
The implementation of the Balanced Scorecard performance management system usually requires the involvement of employees from different departments, coordination of multiple teams and management of extensive resources. Therefore, Project Management is one of the activities that have to be performed, in order to secure timely, accurate and within budget BSC implementations (Papalexandris et al, 2005)
BSC and project management methodologies
In order to implement Balanced Scorecard performance management systems different project management methodologies are available to be used. Two of the most common project methodologies used with success in BSC implementations are PMBOK and Prince2.
No matter the type of the project involved, by applying the principles and practice of good project management, organizations are more likely to:
- Get their project done on time and within budget
- Deliver a quality product or service that will delight clients and end users
- Ensure that project team members will finish the project with improved capability, sense of personal achievement and satisfaction (eab group, 2010)
Setbacks in BSC project management implementations
According with Papalexandris et al (2005) even were the introduction of the Balanced Scorecard involved relatively small scale projects, significant deviations in terms of budget and costs were registered. Among the most common causes of Balanced Scorecards project deviation identified were:
- Poor project planning and diverging agendas among project team members
- Excessive costs due to implementation of data mining technology required to gather and calculate the Balanced Scorecard performance measures
BSC and the project management process
Thought particular stages are required to be performed during a Balanced Scorecard implementation; overall, a Balanced Scorecard project should go through scheduling, budgeting and resource allocation processes and deal with initiating, executing, controlling and closing the project. (Papalexandris et al 2005). Additionally it should include project reviews and post implementations reviews of the Balanced Scorecard performance management system.
Projects within BSC project
While Balanced Scorecard implementation is a project in itself, its introduction triggers the establishment, prioritization and launch of several strategic initiatives. Strategic initiatives are projects are initiated in order to support the strategic performance management process and can vary in scale, scope and complexity. In order to keep things on track, and identify how activities are progressing and aligning to the overall program a streamlined project management process in recommended to be set in place.
Activity Management System
According with Fluin and Peters (2007), one way to keep all projects on track and facilitate the understanding of how the initiatives impacted the overall performance of the organization, is by using the Activity Management Sytem. Activity Management meets the requirements of monitoring those initiatives through to completion by:
- Assisting keeping the organizational performance in line
- Providing a transparent, structured and organized method for analyzing strategies
- Realigning focus and allowing the strategic objectives of the organization to be met in an effective and efficient manner (Fluin and Peters, 2007)
Project Portfolio Management
Another common methodology used for multiple projects management is Project Portfolio Management (PPM). Project Portfolio Management (PPM) is a management process designed to help organizations acquire and view information about all their projects, then sort and prioritize each project according to certain criteria, such as strategic value, impact on resources and cost among others.
Companies generally have several competing initiatives that they intend to implement. However, with resources and budgets being limited, a prioritization and selection process is generally employed.
Effective PPM helps organizations align their project workload to meet strategic goals, while making the best use of limited resources. (eab group, 2010)
- eab group (2010), Project Management, available at: http://www.eabgroup.com.au/en/section/project-management/project-management-i25.html.
- eab group (2010), Portfolio Management, available at: http://www.eabgroup.com.au/en/section/project-management/portfolio-management-i23.html.
- Fluin, G. & Peters, S. (2007), Ming the Gap: Using Activity Management to Complete the Performance Management Puzzle, Perform Magazine, Vol. 4, No. 1, pp. 1-4.
- Papalexandris, A., Ioannou, G., Prastacos, G. & Soderquist, K. E. (2005), An integrated methodology for putting the Balanced Scorecard into Action, European Management Journal, Vol. 23, No.2, pp. 214-227.