Statistics of BSC results

 

According to Denton (2005), de Wall (2003) and Bourne (2008), the Balanced Scorecard (BSC) emerged in the early 1990s as a new management concept and was immediately embraced by both the academics and corporate world. Since then, the potential of this new concept was recognized in various forms, receiving distinctions as the best theoretical framework in 1997 from the American Accounting Association (Norreklit, 2003), while the Harvard Business Review considered that the BSC was one of the most influential ideas of the twentieth century (Brudan, 2008).

 

De Wall (2003) suggests that the Balanced Scorecard is the most successful tool in the field of performance management. The uptake of the BSC in a relatively short period of time is quite impressive. The Balanced Scorecard Collaborative (the initiators of the concept in 1992) claim that according to Bain & Company by 2002 the BSC was already used by half of the Global 1000 companies (Calabro, 2001).

 

The global use of the Balanced Scorecard and the user satisfaction

One of the most comprehensive evaluation of the global BSC adoption is given by the “Management tools and techniques” survey administered annually by Bain & Company. The BSC was introduced in the survey in 1996, when 39% of the respondents claimed to be users. For about five years this figure remained fairly constant, and then it picked up at 62% in 2002. Overall the BSC is considered one of the tools with the sharpest increases since being introduced in the survey, with a 14% change, although its usage dropped slightly in 2008 at 53%.

The global use of the Balanced Scorecard and the user satisfaction

bain__company_-_bsc_survey_-_bsc20_438

Source: Bain & Company, 2009

 

According with the same survey, in 2008 the Balanced Scorecard is much better placed among the most used management tools and techniques throughout the world. Compared with the data released in 2004 the Balanced Scorecard strengthened its position considerably climbing from the 13th position in the hierarchy up to the 6th spot (Rigby 2001, 2003, 2005, 2009).

 

Balanced Scorecard global ranking among most used management tools

baincompany-tools_ranking-bsc20_988

Source: Bain and Company, 2009

 

This might come as a result of a dramatic drop in the average number of management tools and techniques used by companies throughout the world from 16.1 in 2002 to 15.3 in 2006 to 10.6 in 2008. However this higher position can also be the result of the continuous evolution and improvement of the concept.

 

Average number of management tools used by organisations

baincompany-tools-bsc20_1203_01

Source: Bain and Company, 2009

 

Despite the high ratings and increased attention, as well as the idealistic scenarios that are presented in BSC literature, the promises of the concept have yet to convert in widespread success in practice. According with some other statistics:

  • The failure rate of BSC implementation is 70%, figure based on research conducted by Claude Levy, a professor at the Free University of Amsterdam (McCunn, 1998). 

 

  •  Bain &Co. “tools and techniques” survey administered worldwide by the company estimated that in 2004, only 15% of the users were extremely satisfied with the tool and 6% were dissatisfied. While the percentage of dissatisfied users can be considered modest, the proportion of extremely satisfied users is below average and less than half compared to the most popular tool. The defection rate of 7% is the fifth highest in the list of 25 tools analyzed in the Bain & Co. research. (Rigby and Bilodeau, 2005).

 

  • Research conducted by The Hackett Group in 2004, estimates that less than 20% of the typical implementers have in place mature Balanced Scorecards that are generating business value. According to Hackett’s 2004 Finance Book of Numbers, the primary reasons are overweighting the scorecards with historical financial information and the use of too many metrics (The Hackett Group, 22 Oct 2004 News Release)

 

  • According to data provided in the “Enterprise Performance Management: The Japanese State of the Art”, over 60% of Japanese companies have now adopted performance management frameworks such as the Balanced Scorecard.” (Neely et al. 2008)

 

  • According with the “Enterprise Performance Management: The Australian State of the Art ” …65.5% of the respondents claim to have a balanced scorecard…." no other framework for enterprise performance management design being prominent in Australia, with 39.3% of respondents preferring to use their own basis for designing their enterprise performance management system.” (Neely et al. 2008)

 

References

  • Bourne, M. (2008), Performance measurement: learning from the past and projecting the future, Measuring Business Excellence, Vol. 12, No. 4, pp. 67-72.
  • Calabro, L. (2001), On Balance, (Electronic Version), CFO Magazine, 18 August, 2010 from: http://www.cfo.com/printable/article.cfm/2991608.
  • Denton, K., D. (2005), Professional Practice: Measuring relevant things, International Journal of De Wall, A. (2003), The future of the balanced scorecard. An interview with Professor Robert Kaplan, Measuring Business Excellence, Vol. 17, Issue 1, pp. 30-36.
  • Productivity and Performance Management, Vol.  54, Issue 4, pp. 278-287.
  • Norreklit, H. (2003), The Balanced Scorecard: what is the score? A rhetorical analysis of the Balanced Scorecard, Accounting, Organizations and Society, Vol. 28, pp. 591-619.
  • Neely, A., D., Cuganesan, S., Yaghi, B. & Youell, N. (2008), Enterprise Performance Management: The Australian State of the Art, Oracle, Macquarie University and Cranfield School of Management, available at: http://www.ifm.eng.cam.ac.uk/people/adn1000/, accessed 18 May 2010.

BSC concept : Results

 

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